EGC Group, Inc. v Carroll
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EGC Group, Inc. v Carroll 2012 NY Slip Op 31440(U) May 14, 2012 Supreme Court, Nassau County Docket Number: 4388-12 Judge: Timothy S. Driscoll Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT- STATE OF NEW YORK SHORT FORM ORDER Present: HON. TIMOTHY S. DRISCOLL Justice Supreme Court ------------------------------------------------------------------- x THE EGC GROUP , INC., TRIAL/IAS PART: 16 NASSAU COUNTY Plaintiff Index No: 4388- Motion Seq. No. - against - Submission Date: 5/8/12 CHRISTINE CARROLL and STEPHEN T. GREENBERG, Defendants. ------------------------------------------------------------------ x The following papers have been read on this Order to Show Cause Order to Show Cause, Affdavit in Support and Exhibits................. Memorandum of Law in Support.......................................................... Affirmation in Opposition and Affdavits...................................... This matter is before the Court for decision on the Order to Show Cause fied by Plaintiff The EGC Group, Inc. (" EGC" or " Plaintiff' ) on April 6 , 2012 and submitted on May 8 , 2012. For the reasons set forth below , the Court denies Plaintiffs Order to Show Cause in its entirety. BACKGROUND A. Relief Sought Plaintiff moves for all Order , pursuant to CPLR Article 63 , enjoining Defendant Christine Caroll (" Caroll" ), preliminarily and during the pendency of this action , and until its final hearing and determination , from a) providing, directly or indirectly, advertising or marketing services to Defendant Stephen T. Greenberg (" Greenberg ); and b) directly or indirectly contacting, soliciting, and/or providing advertising or marketing services to any of the Plaintiffs [* 2] accounts , customers or clients that Carroll serviced during the last year of her employment at EGC. Defendants oppose Plaintiff s Order to Show Cause B. The Paries ' History The Verified Complaint (" Complaint" ) (Ex. 1 to Canadeo Aff. ln Supp. ) alleges as follows: EGC is a advertising and marketing agency that devotes substantial resources to developing new clients (" Clients ), sustaining relationships with existing Clients and building public goodwill. To this end , EGC employs a sales team comprised of Account Representatives and Account Supervisors. On or about November 3 , 2003 , EGC hired Caroll as an Account Supervisor. Her duties included originating Clients , developing and maintaining relationships with existing Clients and servicing Clients. EGC provided Caroll with financial resources and information and support to assist Caroll in performing her duties. That included 1) paying for her business expenses, including travel and the costs associated with meeting and socializing with Clients; and 2) providing her with necessar services and equipment including office space , a website and marketing materials. The Complaint alleges that EGC's goodwil with its Clients " has significant commercial value " (Compl. at' 12). To protect its goodwil , EGC requires Account Representatives and Account Supervisors to sign a non-compete agreement (" Agreement" ) that prohibits them , for two (2) years after the. termination of their employment , from offering or providing advertising or marketing services to EGC Clients who were EGC Clients during the last year of the Sales Representative employment. On November 3 2003 , Caroll signed the Agreement. During her employment with EGC , Carroll developed with Clients including Greenberg, whose account she serviced. The services that Carroll provided to Greenberg included media planning, event promotion and coordination and production of advertising and marketing materials. Plaintiff alleges that Caroll owed fiduciar duties of loyalty and honesty to EGC. On or about September 22 , 2011 , Carroll advised EGC that she was terminating her employment with EGC effective October 6 , 2011 (" Resignation ). Plaintiff alleges that , upon [* 3] information and belief, Caroll has offered to provide advertising and marketing services to Greenberg, in violation of the Agreement and has , in fact , provided such services to Greenberg. On March 22 , 2012 , Plaintiff s counsel sent a letter to Defendants in which Plaintiff demanded that Caroll cease providing advertising and marketing services to Greenberg but , upon information and belief, Caroll continues to provide those services to Greenberg. The Complaint contains eleven (11) causes of action: 1) breach of contract against Caroll , 2) breach of fiduciar duty against Carroll , 3) misappropriation of customer relationships against Caroll , 4) unjust enrichment against Caroll , 5) a request for a declaratory judgment declaring that the Agreement is valid and enforceable against Caroll , 6) a request for injunctive relief enjoining Caroll , for two years from her Resignation , from providing services to , or being employed by, Greenberg, 7) tortious interference with contract against Greenberg, 8) tortious interference with contract against Carroll , 9) aiding and abetting breach of fiduciary duty against Greenberg, 10) tortious interference with contract against Greenberg, and 10) a demand for an accounting against Caroll. In support of Plaintiffs motion , Ernest G. Canadeo (" Canadeo ), the sole shareholder and Chief Executive Officer ofEGC , affrms the truth of the allegations in the Complaint regarding Caroll' s employment by EGC , her execution ofthe Agreement , the resources expended by EGC in support of Carroll during her employment with EGC and Carroll' s Resignation. He affirms that Greenberg became a client of EGC in 2005 , at which time he signed a Client Agreement Client Agreement" ) (Ex. 3 to Canadeo Aff. in Supp. Canadeo affirms that he has been unable to locate a signed copy of the Client Agreement but he is " certain " that it was signed at' 9), 2011 Greenberg paid EGC a and provides the unsigned copy of the Client Agreement. In monthly retainer of $4 (id. 500 until October of 20 11 Carroll " played no par" in bringing Greenberg , when Caroll left EGC. Canadeo affrms that s account to EGC (id. at 10). Canadeo affirms that Greenberg stopped using EGC for advertising and marketing services at the same time that Caroll resigned from EGC but did not formally terminate his relationship with EGC until November of2011. Canadeo affirms that in March of2012 he learned" (Canadeo Aff. in Supp. at' 16) from certain media and radio station personnel that Carroll was working for Greenberg, or was engaged by Greenberg in a non-employment capacity, [* 4] providing the same marketing services to Greenberg as EGC had been providing to Greenberg. Plaintiff does not provide an affidavit from any of these media personnel. Canadeo expresses his belief that Greenberg induced Caroll to violate the Agreement by agreeing to hold her harmless for any claims that might be brought by EGC for her violation of the Agreement. Canadeo submits that , without the requested injunctive relief, EGC will be damaged in " substantial sum " believed to be in excess of $180 00 (Canadeo Aff. in Supp. at' 19), but affrms that the potential damage to EGC is " more than monetar and incalculable " also (id. Canadeo affirms that he has no knowledge that Carroll has solicited business or is otherwise providing services to clients other than Greenberg, but " fear ( s) she may have done so (or will do (id. so), in light of her proven bad faith" at ~ 21). In opposition , Carroll affirms that , while she was employed by EGC , her duties were largely administrative , and she was not involved in the creative elements of advertising and marketing, and did not negotiate rates directly with the media or engage in similar activities. She was the contact person for different EGC Clients , including Greenberg. Carroll affirms that she is not using any confidential or trade secret information from EGC in connection with her current employment with Greenberg. She affirms that resigned from EGC because it substantially reduced her pay from 2009 to 2010. Caroll denies encouraging Greenberg to leave EGC , and affirms that Greenberg had expressed his dissatisfaction with EGC for over a year before Caroll' s Resignation. In or about October of 20 Greenberg offered Carroll employment , which she accepted , and she submitted her Resignation to EGC. Caroll affirms that she works as an administrator in Greenberg medical offce and her responsibilities include greeting patients at the front desk , walking them to consultation rooms and ensuring that they are satisfied with Greenberg s services. She avers further , that her responsibilities are not similar to those of an employee in a marketing or advertising firm. Carroll affirms that Greenberg retained a new public relations firm and graphic design firm. Carroll affirms that she would be hared by the issuance of the requested injunctive relief, She is single and self-supporting and submits that it would be unduly burdensome to limit her activities for Greenberg, particularly because it is not clear whether the tasks she performs [* 5] constitute advertising or marketing. She avers that she regularly communicates with patients updates Greenberg s office Facebook account , answers telephone calls and emails and assists in promotional evernts. Carroll affrms that she is not competing with EGC , or Greenberg s current advertising and design firms , but her daily responsibilities include tasks that might be considered as relating to marketing or advertising. Mindy Weissler (" Weissler ), the Executive Director of Greenberg s medical practice affirms that she supervises Carroll in her current employment with Greenberg. W eissler affrms that Caroll was not hired as an advertising or marketing professional , but rather as an administrative employee who provides a variety of services. Weissler also affirms that it was Greenberg s intention to terminate his professional relationship with ECG , irrespective of Caroll' s employment status with ECG. She avers that Canadeo made a presentation (" Presentation ) to Greenberg in December of 2010 which substantially failed to respond to (Greenberg s) concerns for a 2011 marketing plan " including Greenberg s desire to increase his focus on internet advertising (Weissler Aff. at' 5). Following the Presentation , Greenberg began relying on other vendors for his marketing needs , and eventually replaced ECG with other marketing firms. Weissler affirms that the requested injunctive relief would disrupt Greenberg s medical practice by limiting Caroll' s ability to interact with Greenberg s patients. In addition , Greenberg continues to develop his own public relations materials without EGC' s assistance , which might necessitate Caroll' s involvement in forwarding messages or speaking with individuals involved with that promotion. Weissler submits that the requested injunctive relief would " cause undue burden by subjecting (Carroll' s) activities to scrutiny as to whether any given task would be within the extremely nebulous scope of ' marketing ' or ' advertising, ' and place her employment in jeopardy " (Weissler Aff. at' 12). C. The Parties ' Positions Plaintiff submits that it has demonstrated its right to the requested injunctive relief by 1) establishing a likelihood of success on the merits by demonstrating that Carroll' s employment with Greenberg is a breach of the restrictive covenant , and establishing that Plaintiff has a legitimate interest in protecting its client relationships developed at Plaintiffs expense; [* 6] 2) demonstrating that Plaintiff wil suffer irreparable harm without the requested injunctive relief because the injunctive relief is necessary to protect the goodwil that Carroll developed while employed by Plaintiff, and to discourage former employees like Carroll from inducing other representatives of Plaintiff to breach their duties to Plaintiff; and 3) the equities balance in Plaintiff s favor in light of the significant resources that Plaintiff invested to aid Carroll in developing and maintaining clients while employed by Plaintiff. Defendants oppose Plaintiff s application , submitting that 1) Plaintiff has not demonstrated a likelihood of success on the merits in light of a) Plaintiffs failure to provide affidavits from the individuals who allegedly provided Canadeo with information about Carroll' current employment , b) the ambiguity of the non-compete clause in the Agreement , and the public policy disfavoring such covenants , and c) the fact that Caroll' s current employment with Greenberg does not constitute improper competition with EGC , particularly because there is no allegation that Defendants have used trade secrets or customer lists of Plaintiff; 2) Plaintiff has not demonstrated irreparable harm without the requested irijunctive relief, both because Plaintiff is seeking monetar damages and because Plaintiff has not established that Carroll played a role in Greenberg s decision to terminate his relationship with EGC; and 3) the equities balance in favor of Carroll , whose livelihood would be affected if the Cour were to grant the requested injunctive relief. RULING OF THE COURT A. Preliminary Injunction Standards A preliminar injunction is a drastic remedy and wil only be granted if the movant establishes a clear right to it under the law and upon the relevant facts set forth in the moving papers. v. Wiliam M Corbin Blake Agency, Inc. 275 A. D.2d 35 v. Leon 283 A.D. 2d 423 Peterson 424 (2d Dept. 2001); 36 (2d Dept. 2000). Injunctive relief will lie where a movant demonstrates a likelihood of success on the merits , a danger of irreparable harm unless the 75 N. Y.2d 860 (1990); W T Grant Co. Romaine 295 A.D. 2d 431 (2d Dept. 2002); v. Srogi 52 N. Neos v. Aetna Ins. Co. injunction is granted and a balance of the equities in his or her favor. v. Lacey, 2d 496 517 (1981); 291 A. Capasso Merscorp, Inc. 2d 434 (2d Dept. 2002). The decision whether to grant a preliminary injunction rests in the sound discretion of the Supreme Court. Doe v. Axelrod 73 N. 2d 748 , Mid- Hudson Waste , Inc. 50 A.D. 3d 1073 (2d Dept. 2008); 750 (1988); Automated Waste Disposal, Inc. City of Long Beach v. Sterling [* 7] American Capital, LLC 40 A. 3d 902 Ruiz 903 (2d Dept. 2007); v. Meloney, 26 A. DJd 485 (2d Dept. 2006). A plaintiff has not suffered irreparable har warranting injunctive relief where its alleged See White Bay Enterprises injuries are compensable by money damages. v. Newsday, 258 A.D.2d 520 (2d Dept. 1999) (lower court' s order granting preliminar injunction reversed where Schrager record demonstrated that alleged injuries compensable by money damages); v. Klein 267 A.D. 2d 296 (2d Dept. 1999) (lower court' s order granting preliminary injunction reversed where record failed to demonstrate likelihood of success on merits or that injuries were not compensable by money damages). B. Restrictive Covenants Restrictive covenants contained in employment contracts are disfavored by the courts and , thus , are to be enforced only if reasonably limited temporally and geographically, and to the extent necessar to protec the employer s use of trade secrets or confidential customer information. Gilman C. Ciocia, Inc. v. Randello 55 A. 3d 871 , 872 (2d Dept. 2008). Application of these Principles to the Instant Action The Cour denies Plaintiffs Order to Show Cause in its entirety. The Court concludes that Plaintiff has not demonstrated a likelihood of success on the merits in light of 1) the issues regarding the enforceability of the restrictive covenant given its temporal length (2) years and the public policy disfavoring such covenants , 2) the factual disputes regarding the nature of Caroll' curent employment with Greenberg and whether such employment comes within the prohibited conduct set forth in the restrictive covenant , and 3) Plaintiffs failure to provide affdavits from the media and radio station personnel to whom Canadeo refers , to support his hearsay assertion that Plaintiff is providing marketing and advertising services to Greenberg. The Court also concludes that Plaintiff has not demonstrated that it wil suffer irreparable har without injunctive relief, based on the Court' s determination that any injury is compensable by money damages. Finally, Plaintiff has not shown that the equities balance in favor of Plaintiff, given Carroll' s affrmation regarding her need for the compensation she receives from Greenberg to maintain her financial stability. [* 8] In light of the foregoing, the Court denies Plaintiffs Order to Show Cause in its entirety. All matters not decided herein are hereby denied. This constitutes the decision and order of the Court. Counsel for the parties are reminded of their required appearance before the Court for a Preliminar Conference on May 31 , 2012 at 9:30 a. ENTER DA TED: Mineola , NY May 14 2012 i,, INTEftED MAY ' NAHAU 1 7 2012 COUNTY cOUMtf CL!RK'! OFFt!!
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