COURT OF YORK
NATURAL FOODS,
FEUERSTEIN,
FI IN CLERK'S OFFICE U.S. DISTRICT COURT
AUG 3 2016 LONG ISLAND OFFICE
OPINION ORDER
(SJF)(SIL)
On 2016, ("plaintiff')
United ("defendant"),
U.S.C.
Pending
Procedure
Providence, 嬢十䌢崬縠 UNITED STA TES DISTRICT EASTERN DISTRICT NEW ---------------------------------------------------------)( THOMAS GRILLEA,
Plaintiff, -against- UNITED INC.,
Defendant. ----------------------------------------------------------)(
J. I. Introduction
LED
E.D.N.Y. * t *
& 16-CV-3505
June 24, plaintiff Thomas Grillea commenced this action against defendant Natural Foods, Inc. pursuant to this Court's diversity of citizenship jurisdiction, 28 § 1332(a), seeking, inter alia, (1) judgment declaring that a non-competition clause in a severance agreement executed by him is unenforceable; and (2) damages under the theory of promissory estoppel and for defendant's alleged breach of contract and tortious interference with prospective economic advantage. before the Court is plaintiffs motion pursuant to Rule 65 of the Federal Rules of Civil for a preliminary injunction enjoining defendant from enforcing the non-competition clause against him. For the reasons set forth below, plaintiffs motion is denied.
II. Background
A. Factual Background Defendant is a Delaware corporation with its principal place of business in Rhode Island, (Second Amended Complaint 3), and is a wholesale distributor of natural and organic foods; personal care, health and beauty products; vitamins; and nutritional
consumers. (Dziki Decl., ¶ 4). According to Tom defendant, (id. id. category of c id.
Id. i.e., retail id., ¶ 6), and does not manufacture supplements. (Affidavit of
Plaintiff is a citizen of the State of New York, (SAC, ¶ 2), who, from 2006 to 2015, served as a division president responsible for various divisions of defendant, including its Select Nutrition division. (Id., ¶ 7; see also Plf. Aff., ¶¶ 3, 6; Dziki Decl., ¶ 7; Declaration of Joseph
plaintiff as the division preside see Hatchett Decl., ¶¶ 2- ith] distribution centers in Philadelphia Pennsylvania and Auburn, California[,] . . . [and] a dedicated Id., ¶¶ 5-7) 1
. t compete directly with Select Nutrition: id.
1 See also www.selectnutrition.com (last visited 8/16/16).
sometimes the same, products as Select Nutrition to the same general category of customers, [i.e. Id. (Id.) i.e., retail Id., ¶ 9). . . . [,] a member Decl., ¶ 7; see also id., ¶ 11 [accord]),
ustomers,
distribution being limited to members of the E Id., ¶ 8). 2 attended on a monthly basis, [plaintiff] was provided with written information identifying
ir sales volume and other information relevant to the meeting in question[;] . . . [and] confidential subjects were often discussed . . . , such as division financial results, customer satisfaction issues and strategies for addressing them, sales and marketing strategies, competitive analyses and multi- (Dziki Decl., ¶ 9; see also 2
-qualified to discuss the nature and duties Executive Leadership Team, and to draw conclusions regarding to what information such employees had access and to what employees certain information is distributed.
leadership meeting, which includes all C-level . . . Officers and Dire
[defendant], and is maintained as confidential . . . through the use of limited disclosure, contractual confidentiality obligations also participated in meetings, and was given access to information about, confidential incentive
programs with its suppliers, including those who manufacture vitamins and supplements. This information included pricing arrangements, negotiating strategies, sales volumes and purchasing
provided to [plaintiff] is not generally known in the natural foods industry, nor is it disclosed outside [defendant][,] [i]t would . . . be highly valuable to a direct competitor of [defendant] for Id., ¶ 11).
actively employed, [defendant] learned that Threshold was planning to open a new distribution
competitive strategy to offset and Id.)
Id. Sel
In 2009, plaintiff executed a Severance Agreement, effective April 1, 2009, (SAC, ¶ 9 and Ex. 1; Plf. Aff., ¶ 26 and Ex. 1; Dziki Decl., ¶ 13; Traficanti Decl., ¶ 4), which contains the following non-competition clause:
termination of such employment for any reason or payment of any compensation, whichever occurs last, [plaintiff] shall not engage, directly or indirectly (which includes, without limitation, owning, managing, operating, controlling, being employed by, giving financial assistance to, participating in or being connected in any material way with any person or entity), anywhere in the United States in any activities with the following companies, that include Tree of Life or any of its direct competitor of [defendant] with respect date hereof and/or (ii) any activities which [defendant] becomes involved in ownership as a passive investor of less than two percent (2%) of the issued and outstanding stock of a publicly held corporation so engaged, shall not by itself be deemed to constitute such competition. Further, during such one-year period or employees to take action might [sic] be disadvantageous to [defendant] or
(Plf. Aff., Ex. 1, § 6(b)). In addition, the Severance Agreement contains the following provision:
ecognizes that the possible restrictions on [his] activities which may occur as a result of [his] performance of [his] obligations under this Agreement are required for the reasonable protection of [defendant] and its investments, and [plaintiff] expressly acknowledges that such restrictions are fair and reasonable for that purpose. [Plaintiff] further expressly acknowledges that damages alone will be an inadequate remedy for any breach or violation of any of the provisions of this Agreement, and that [defendant], in addition to all other remedies hereunder, shall be entitled, as a matter of right, to injunctive relief, including specific performance, with respect to any such breach or violation or threatened breach of violation, in any court of competent jurisdiction. If any of the provisions of this Agreement are held to be in any respect an unreasonable restriction upon [plaintiff] then they shall be deemed to extend only over the maximum period of time, geographic area, and/or range of activities as to which they may be enforceable. [Plaintiff] expressly agrees that all payments and benefits due [him] under this Agreement shall be subject to [his] compliance with
(Id., § 6(e)). The Severance Agreement further (Id., § 7).
In or about February 2015, plaintiff was notified that his employment with defendant was being terminated. (See Plf. Aff., ¶¶ 23-25; Dziki Decl., ¶ 15; Traficanti Decl., ¶ 6). According to compliance officer, (Traficanti Decl., ¶ 2), when plaintiff was notified of his termination, he
s stock options to vest. (Dziki Decl., ¶ 15 [seven months]; Traficanti Decl., ¶ [six months]) 3
. Dziki avers that at that time, he explained to
vacation or Paid Ti 4
(Dziki ¶ 17). Indeed, a First
March 2015, (see valuable consideration set forth [t]herein 3
is Decl., ¶ 18).
4 7). In addition, Traficanti and Dziki bot exception to its policies for [plaintiff] in this situation, especially since his additional seven
Decl., ¶ 17; Traficanti Decl., ¶ 7).
agreement for [his] continued employment beyond the date [t]hereof (emphasis added). The Amendment revised Section 2 of the Severance Agreement to provide, in pertinent part:
agreed upon by [the parties] for reasons other than Cause, Death or Disability, in addition to the payment of any unpaid base salary and accrued and unpaid
as of the date of such termination or resignation for a period of one (1) year,
(Id., ¶ C) 5
. In addition, the Amendment provides, in relevant part, that Section 6 of the Severance ., Ex. 2, ¶ F). Pursuant to the Amendment, plaintiff agreed, inter alia 5
Section 2 of the Severance Agreement provides, in pertinent part:
Disability or (b) [plaintiff] resigns for Good Reason, in addition to the payment of any unpaid base salary and accrued and unpaid vacation as of the date of such terminatio and medical benefits in effect as of the date of such termination or resignation for a period of one (1) year, subject to applicable withholding and deductions. . .
(Plf. Aff., Ex remained unchanged by the Amendment, the Amendment expressly revoked, inter alia, the
transitio employment beyond April 1, 2015 until September 30, 2015, fully engaging and completing any
and all special projects assigned to [him] by [defendant], and, in further consideration of continuing employment until September 30, 2015, . . . to resign from [defendant] on September receiving bi-weekly severance payments, beginning October 1, 2015, equal to my salary rate as of September 30, 2015 as well as medical
cease receiving any further salary and medical benefits from [defendant] whether under [the] Severance Agreement or any other agreement or Company policy and, thus, be fully severed Id., ¶ G). Plaintiff was paid his full salary during the period between the date the Amendment was executed and the Severance Date , i.e., from on or about March through September 30, 2015 see also SAC, ¶ 14; Plf. Reply, ¶ 13). At the time his employment with defendant was terminated, plaintiff earned an annual salary of three hundred nine thousand dollars ($309,000.00). (Dziki Decl., ¶ 7). In addition, plaintiff was paid for all Paid Time Off and vacation time that he had accrued as of April 2015, (id., ¶ 17; Traficanti Decl., ¶ 7), and he received the severance payments due him under the Severance Agreement and Amendment, (SAC, ¶ 16; Plf. Aff., ¶ 29; Dziki Decl., ¶ 18; Traficanti Decl., ¶ 8), which ended on April 15, 2016. (SAC, ¶ 16; Plf. Aff., ¶ 29). However, plaintiff claim receive the accrued [Paid Time Off] or vacation from April 2015 through September 30, 2015
value of such accrued Paid Time Off is approximately twelve thousand dollars ($12,000.00).
eligible for the vacation a id.
or status as an employee and [he] was afforded all of the other employment benefits like health Id.) Dziki avers that
address to insure that he would not inadvertently become involved in communications related to Id. Id.) In addition, Dziki and Traficanti each
substantive emails regarding day to day . . . operations [of defendant] with him, and did not see f] and any other . . .
(Dziki Decl., ¶ 16; Traficanti Decl., ¶ 6).
that
affidavit in support of his motion for a preliminary injunction and avers in his reply declaration 3). In addition, plaintiff submits: (a) two (2) emails he sent to Dziki on April 7 and 8, 2015,
(id. to sev
6 (id., ¶ 7 and Ex. 2); and (c) an email from Iannone to plaintiff, dated July 23, 2016, indicating
and asked for [his] assistance[] . . . [was] a $5 Million exclusive to [S]elect program w[ith] [N]atrol and Witz sons[] [in or about May 2015] . . . [b]ecause [plaintiff] asked [him] to assist them after [his] departure Id., Ex. 2) (emphasis added). Moreover, according to plaintiff, fendant] and Id., ¶ 5).
Aff., ¶ 29; see also SAC, ¶ 15), until he was approached by Threshold. (See Plf. Aff., ¶ 32). In
, ¶ 22; Plf. Aff., ¶ 32), and the non-competition clause. (Traficanti Decl., ¶ 9). According to plaintiff, during that conversation,
6 Contrary he email by
Threshold: I can update Id., Ex. 2).
supply or retail role withi see also SAC, ¶ 22).
According to Traficanti, plaintiff asked him when the non-competition clause ended and er
y came to his attention, he could (and should) contact [Traficanti] to discuss it before taking the position to make sure it complied with Id. Threshold] would be permissible under his non- Id., ¶ 13). According to plaintiff, after Threshold contacted Dziki for an employment reference for
position was in manufacturing, the [non-competition clause] was not enforceable against him and see also Plf. Aff., ¶ 33) 7
. hreshold would be permissible under his non- from a Human Resources professional at Threshold . . . [during which] [t]he HR professional
7
ing what the director of human resources at Threshold told him during a recent telephone conversation between them, (Plf. Reply, ¶ 11), offered for the truth of the matters asserted therein, constitute inadmissible hearsay which have not been considered by the Court.
Executive Leadership Team at [defendant][,] . . . [and] indicated that Threshold was looking for Id.) (i
id. Id.)
On or about May 30, 2016, plaintiff sent Traficanti a letter indicating, in relevant part:
in the next few weeks and accept a role which I expect to be offered shortly in the manufacturing/supply side of the supplement industry as President and COO of Manufacturing of Planetary and Source Naturals. . . . I know with my over two decades within the supplement industry my experience will make me the best fit for this opportunity. We all know how small our industry is and I only hope our both companies can help one another in the future.
(Decl see also Traficanti Decl., Ex. 1; aficanti Decl., ¶ 10), and since he
ant part:
Source Naturals. While I would like to offer congratulations I would also ask you to not do anything drastic in this regard until I can return to the office and do more research on this entity as well as re-review your severance agreement. Having said that, it is my understanding that this entity may be a part of or an affiliate of Threshold and, therefore, a direct competitor of Select. If that is true, . . . and if my recall of your remaining 10 to 12 months of your noncompete [sic] is correct, I regret that you may not be able to except this job.
(Lancia Decl., Ex. 2; see also Traficanti Decl., Ex. 2; Plf. Aff., ¶ 34). Trafic was [sic] a brand of supplements manufactured and distributed only by Threshold, in direct 7, 2016, Traficanti sent plaintiff a letter, and sent copies thereof to Spinner and Goldberg, indicating, in relevant part:
and Source Naturals] is an arm of and an affiliate of Threshold Enterprises, LTD,
. . . Section 6 b. [of the Severance Agreement] prohibits you from competing against [defendant] or any of its affiliates, including Select Nutrition, for one year after your last payment pursuant to this severance agreement. Our records show that you received your last [severance] payment on April 15, 2016. Therefore, you are prohibited from competing against [defendant] or any of its affiliates until April 14, 2017. The purpose of this letter is to again request that you comply with your contractual obligations. Please confirm you understand and please inform me of your current status relating to Planetary and Source Naturals/Threshold Enterprises . . . . Any failure to address this as soon as you can will likely leave
(Traficanti Decl., Ex. 3; see also Lancia Decl., Ex. 2; Plf. Aff., ¶ 35) 8
.
8 On June 20, 2016, Traficanti sent the letter to plaintiff by email with the following message: your former NY address, but it appears you may have moved. If you indeed have done so in order to accept the position with Threshold during the pendency of your non-compete with [defendant], then we may have a problem here, so I think it is best for you to call me upon Id.) (grammatical errors in original).
By letter dated the same date, i.e.
Chief Operating Officer (COO) Brand Manufacturing for Source Naturals and [its] other manufactured bra Aff., Ex. 3). Threshold is a wholesale distributor of natural beauty products and nutritional supplements throughout the United States and in international markets, (Hatchett Decl., ¶ 10 and Exs. 1 and 2), 9
and also manufactures, and is the sole distributor of, Source Naturals® and Planetary Herbals® brands. (Id., Ex. 1) 10
.
Threshold at an annual base salary of four hundred thousand dollars ($400,000.00), and would inter alia range and
[plaintiff] two (2) weeks (10 days) of PTO [Paid Time Off] beginning on [his]
9 See also www.thresholdenterprises.com/articles/5391/ (last visited 8/16/2016) (indicating the natural foods
10 See also www.sourcenaturals.com/library/about/9706 (last visited 8/17/16) (indicating that Thresho
Id.) However, ourt decision or other written documentation affirming that [his] hire by [it] does not violate a noncompetition Id.) -Employment Agreement signed by Goldberg on June 17, 2016, indicating, inter alia [plaintiff] to gain any unfair advantage, but seeks to hire him, as it hires others, for his leadership
secrets, if any, or any other confidential or proprietary information that he may have acquired for
to Threshold anything that belongs to any of his former employers or (ii) use any of his former
Plaintiff claims that [defendant] does not currently manufacture supplements and did not
Nutrition in, among other markets, the vitamin, natural beauty items, and nutritional supplement
and appear[s] at many of the same trade shows [as Select Nutrition], including Natural Products
be extremely difficult, if not impossible, to
separate the manufacturing of competing products from the sourcing, pricing, marketing and
industry, manufacturing of branded products such as Source Naturals® necessarily requires an
understanding of the preferences of the customers to whom they will be marketed and sold and Id., ¶ 14). Hatchett avers Id.)
th[o]se aspects of its business would be highly valuable to any direct competitor, like Threshold, which distributes the same and competing products sourced [sic] from many of the same vendors , if a
pricing for specific products for specific customers, it could use that information to undercut
Id. and supplier information generally retains it competitive value from year-to-year[,] . . . [and] business strategy documents and other plans may be revised on an annual basis, some of the confidential information in those documents and plans stays consistent from year-to- - Id., ¶ 16).
industry, any individual who has the title of Chief Operating Officer must necessarily be involved in overall competitive strategy, pricing, marketing and customer related issues at the Id., ¶ 20). Plaintiff contends, inter alia Case 2:16-cv-03505-SJF-SIL Document 28 Filed 08/31/16 Page 16 of 29 PageID #: 425 at [defendant] consists
Plaintiff avers, inter alia 2013, which is where the marketing st distributers in this market are generally similar, meaning everyone basically feeds off the similar
September (Plf. Reply], ¶ 3).
Plaintiff alleges that since his last severance payment was April 15, 2016, enforcement of the non- until April 15, 2017, or one entire year from the date of his last severance payment[,] [and] [he] would, therefore, be unable to earn
- th a good
Threshold] while it is still available to [him], before the offer is revoked[] . . . [and] [his]
B. Procedural History On June 24, 2016, plaintiff commenced this action against defendant pursuant to this inter alia, (1) judgment declaring that the non-competition clause is unenforceable; and (2) damages under the
interference with prospective economic advantage. Plaintiff filed an amended complaint and second amended complaint on June 27 and 30, 2016, respectively. Plaintiff now moves pursuant to Rule 65 of the Federal Rules of Civil Procedure for a preliminary injunction enjoining defendant from enforcing the non-competition clause against him.
III. Discussion A. Standard American Civil Liberties Union v. Clapper seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he
is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20, 129 S. Ct. 365, 172 L. Ed. 2d 249 (2008); accord Clapper Winter, 555
U.S. 2 Id. case, courts must balance the competing claims of injury[;] consider the effect on each party of
the granting or withholding of the requested relief[;] . . . [and] pay particular regard for the public Id. (quotations and citation omitted).
B. Likelihood of Success on the Merits 1. Breach of Severance Agreement and/or Amendment Plaintiff claims that the non-competition clause is unenforceable because defendant has breached a material term of the Severance Agreement and/or Amendment by failing to pay him Paid Time Off accrued during the Interim Period. Defendant contends that it has not materially breached the Severance Agreement and/or Amendment with plaintiff.
contract is breached does not necessarily mean that the contractual relationship between two p Landmark Inv. Grp., LLC v. CALCO Constr. & Dev. Co., 318 Conn.
determining whether contractual relations have ceased, including, for example, whether such a Landmark, 318 Conn. at 866, 124 A.3d 847; see also Bernstein v. Nemeyer, 213 Conn. 665, 672- material failure of performance that the other party to the contract is discharged from any further A.S. v. Trumbull Bd. of Educ., 414 F. Supp.
A material breach agreement between the parties, or . . . touches the fundamental purpose of the contract and United States v. Cohan, 111 F. Supp. 3d 166, 172-73 (D. Conn. 2015), , 2016 WL 3435366 (2d Cir. June
render or to offer performance is material, the following circumstances are significant: (a) the
extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; and (e) the extent to which the behavior of the party failing to perform or Shah v. Cover-It, Inc., 86 Conn. App. 71, 75-76, 859 A.2d 959 (Conn. App. 2004) (alterations omitted) (quoting 2 Restatement (Second) of Contracts, § 241); see also Bernstein, 213 Conn. at 672, 570 A.2d 164; Cohan facts of each case in such a way as to further the purpose of securing for each party his expectation of an exchange of performances. Section 241 therefore states circumstances, not Shah, 86 Conn. App. at 76, 859 A.2d 959 (quotations, alterations and citation omitted); accord 669 Atlantic St. Assocs. v. Atlantic-Rockland Stamford Assocs., 43 Conn. App. 113, 128, 682 A.2d 572 (Conn. App. 1996). tract terms [] is not one of strict Pack 2000, Inc. v. Cushman, 311 Conn. 662, 675, 89
id. (quotations and citation omitted), pursuant is excused, not because compliance with the terms is objectively impossible, but because actual performance is so similar to the required performance that any breach that may have been
committed is im Id. occurs when, although the conditions of the contract have been deviated from in trifling
particulars not materially detracting from the benefit the other party would derive from a literal performance, the [party] has received substantially the benefit he expected, and is, therefore, Id. at 684, 89 A.3d 869 (quotations, alterations and citation omitted). Plaintiff has not demonstrated a likelihood of success on its claim that defendant materially breached the Severance Agreement and/or Amendment because, inter alia, defendant -for compensation, i.e., his full salary during the Interim Period; any Paid Time Off that had accrued as of April 2015; and the full severance payments due him thereunder, totaling approximately three hundred nine thousand dollars ($309,000.00), exclusive of the value of the medical benefits he continued to receive, (Plf. Aff., ¶¶ 28-29; SAC, ¶¶ 14, 16; Plf. Reply, ¶ 13; Dziki Decl., ¶¶17-18; Traficanti Decl., ¶¶ 7- thousand dollars ($12,000) for the Paid Time Off he purportedly accrued during the Interim Period, i.e., from April 1, 2015 to September 30, 2015, or less than five percent (5%) of the compensation due him, constituted a default of the Severance Agreement and/or Amendment until after defendant sought to enforce the non-competition clause against him. See, e.g. Pack 2000, 311 Conn. at 685-86, 89 A.3d 869; Van Dyck Printing Co. v. DiNicola, 43 Conn. Supp. 191, 199, 648 A.2d 898 (Conn. Super. Ct. 1993), , 231 Conn. 272, 648 A.2d 877 (Conn. 1994); Carlyle Johnson Mach. Co., LLC v. April, No. CV 9704812443S, 2000 WL 234311, at * 4 (Conn. Super. Ct. Feb. 10, 2000) (unpublished opinion). Plaintiff was deprived of only a small percentage of the compensation he reasonably expected under the Severance Agreement and/or Amendment; he can be adequately compensated for the part of the benefit of which he was
deprived by an award of damages if he is ultimately successful on his breach of contract claim against defendant; and defendant would be deprived of the entire benefit it expected under the Severance Agreement and/or Amendment if the non-competition clause is not enforced despite having substantially complied with its obligations thereunder. Thus, even assuming, arguendo, ly accrued during the Interim Period constitutes a breach of the Severance Agreement and/or Amendment, such failure did not materially impair the rights that plaintiff bargained for when the parties entered into the Severance Agreement and Amendment. Acco
obligations under the non-competition clause or render the non-competition clause unenforceable.
2. Reasonableness of Covenant Not to Compete Plaintiff claims that the non-competition clause is unenforceable because it is not reasonable under Connecticut law. Defendant contends that the non-competition clause is reasonable and unenforceable. venant that restricts the activities of an employee following Minnesota Mining & Mfg. Co. v. Francavilla, 191 F. Supp. 2d 270, 279 (D. Conn. 2002); see
also Weseley Software Dev. Corp. v. Burdette restrictive covenant not to compete may be enforceable if the restraint is reasonable under the
Connecticut courts look to five factors: (1) the length of time the restriction operates; (2) the
geographical area covered; (3) the fairness of the protection accorded to the employer; (4) the e his occupation; and (5) the extent A.H. Harris & Sons, Inc. v. Naso, 94 F. Supp. 3d 280, 293 (D. Conn. 2015) (quotations and citation omitted); see also Scott v. General Iron & Welding Co., Inc., 171 Conn. 1 binding, a covenant which restricts the activities of an employee following the termination of his employment must be partial and restricted in its operation in respect either to time or place, [] and must be reasonable- that is, it should afford only a fair protection to the interest of the party in whose favor it is made and must not be so large in its operation as to interfere with the interests of the public. . . . The interests of the employee himself must also be protected, and a restrictive covenant is unenforceable if by its terms the employee is precluded from pursing his
and citations omitted) A.H. Harris, 94 F. Supp. 3d at 293 (quotations and citation omitted).
Although plaintiff makes much of the fact that his employment with defendant was
reasonableness of a restrictive covenant of employment does not turn on whether the employee subject to Robert S. Weiss & Assocs., Inc. v. Wiederlight, 208 Conn. 525, 532, 546 A.2d 216 (Conn. 1988). ot include as an A.H. Harris, 94 F. Supp. 3d at 301.
a. Length of Time and Geographical Area Covered strictions are to be reviewed as intertwined considerations, meaning, for instance, that a restriction covering a large area might be reasonable if in effect for a brief time, while a restriction covering a small area might be reasonable for a longer time. A.H. Harris, 94 F. Supp. 3d at 293 (quotations, alterations and Wiederlight,
208 Conn. 525, 530, 546 A.2d 216 (Conn. 1988).
A.H. Harris, 94 F. Supp. 3d at 294 (citing cases); see also Minnesota Mining, 191 F. Supp. 2d at 280. Since the effectively eighteen (18)-month long restriction in the
distribution business while ensuring that plaintiff can return to that business within a definite and reasonable period of time, the time limitation in the non-competition clause of the Severance Agreement is reasonable. See, e.g. Wiederlight, 208 Conn. at 530, 546 A.2d 216; Minnesota Mining, 191 F. Supp. 2d at 280. Although the non-competition clause does not contain a geographic limitation within the
because it is limited to only potential employers within the United States who are direct competitors of defendant, of which, according to defendant, there are only twenty-nine (29). Accordingly, by its own terms, the non- Wiederlight, 208 Conn. at 532, 546 A.D.2d 216; see also Minnesota Mining, 191 F. Supp. 2d at 280, and, thus, is not overly-broad and is reasonable.
b. In Wiederlight, the Supreme Court of the State of Connecticut held that:
character of the business and the nature of the employment are such that the employer requires protection for his established business against competitive activities by one who has become familiar with it through employment therein, restrictions are valid when they appear to be reasonably clients or customers it is appropriate to restrain the use, when the service is ended,
of the knowledge and acquaintance, so acquired, to injure or appropriate the
Id., 546 A.2d 216, 221, 208 Conn. at 533, 546 A.2d 216 (quotations, alterations and citation omitted); accord Minnesota Mining, 191 F. Supp. 2d at 280-81. In light of, inter alia, the fact that plaintiff held a high-level position with defendant and, nd pricing strategies, the restrictions in the non-competition clause appear reasonably necessary for being able to utilize his knowledge of its inner workings to the benefit of one of its direct
competitors and to its own detriment, see, e.g. A.H. Harris, 94 F. Supp. 3d at 297, and the level of protection that the restrictions in the non-competition clause afford to defendant is reasonably necessary to protect its business rights. See, e.g. Minnesota Mining, 191 F. Supp. 2d at 281. Indeed, the Severance Agreement itself contains an acknowledgment by plaintiff that the possible restrictions on his work activities which may occur as a result of the non-competition
which must determine whether the covenant is
reasonable as a matter of law, there is no good reason why the[y] . . . ought not to be considered
of contract[,] . . . includ[ing] the right to contract for the assumption of known or unknown Fairfield County Bariatrics & Surgical Assocs., P.C. v. Ehrlich, No. FBTCV1050291046, 2010 WL 1375397, at * 31 (Conn. Super. Ct. Mar. 8, 2010). Accordingly, the protection afforded to defendant by the non-competition clause is reasonably fair and not overly expansive.
c. to considering the fair protection of the employer, the interests of the employee herself must also be protected, and a restrictive covenant is unenforceable if by its A.H. Harris, 94 F. Supp. 3d at 297 test for reasonableness is not whether the defendant would be able to make a living in other ways, or in other occupations, but whether or not the Agreement as drafted and applied would Id. at 298 (quotations, alterations and citation omitted). The validity of a non- language in which [it] [is] couched, but by a factual inquiry into whether [it] [is] reasonably Id. (quoting Schoonmaker v. Cummings & Lockwood of Conn., P.C., 252 Conn. 416, 747 A.2d 1017, 1040 (2000) (internal quotations omitted)). The non-competition clause in the Severance Agreement represents a reasonable restraint inter alia, defendant is seeking only to prevent plaintiff from working with one of its twenty-nine (29) direct competitors nationwide,
including Threshold. See, e.g. A.H. Harris, 94 F. Supp. 3d at 298 (finding that the restrictive covenants at issue, which enjoined the defendant from working with a direct competitor, represented a reasonable restraint on the defendant). The restrictive covenant does not prohibit plaintiff from working for a national or international company in the natural foods industry that is not one of the twenty-nine (29) direct competitors of defendant; and plaintiff can even work for one of those direct competitors of defendant in any capacity he chooses after April 15, 2017. Accordingly, the non- pursue his occupation in the natural foods industry.
d. Interference with Public Interest Under Connecticut law, in order for a restrictive covenant to not unreasonably interfere
legally recognized interest, and then, that the means used to achieve this end do not unreasonably New Haven Tobacco Co. v. Perrelli, 18 Conn. App. 531, 536, 559 A.2d 715 (Conn. App. 1989); accord A.H. Harris, 94 F. Supp. 3d at
a monopoly in the area of Perrelli, 18 Conn. App. at 536, 559 A.2d 715; accord A.H. Harris, 94 F. Supp. 3d at 299. As set forth above, defendant is seeking to protect a legally recognized interest, and enforcement of the non-competition clause in the Severance Agreement does not pose a risk of granting defendant a monopoly over the natural and organic foods industry in the United States, particularly since the evidence shows that defendant has twenty-nine (29) direct
competitors. Thus, preventing plaintiff from working for one of those direct competitors in the natural and organic food industry until April 15, 2017 will not deprive the public of any essential good or service. See, e.g. A.H. Harris, 94 F. Supp. 3d at 299. Accordingly, plaintiff has not demonstrated a likelihood of success on the merits of his claim that the non-competition clause in the Severance Agreement is unreasonable or otherwise unenforceable under Connecticut law. 11
C. Balance of Equities
promises and obligations in the Severance Agreement and Amendment for which he received more than adequate consideration, i.e., his full salary and medical benefits during the Interim Period; Paid Time Off that accrued as of April 2015; and the full amount of severance payments due him thereunder, in the amount of three hundred nine thousand dollars ($309,000.00), exclusive of the value of the continued medical benefits. Although prohibiting plaintiff from working with Threshold may affect his employment opportunity with that company, the non- competition clause is not unreasonable and does not prevent him from obtaining comparable employment with any national or international company other than the approximately twenty- nine (29) direct competitors of defendant. Since any harm to plaintiff caused by the lost employment opport business interests if the non-competition clause is not enforced, as set forth above, the balance of
11 In light of this determination, it is unnecessary to consider whether plaintiff will suffer irreparable harm absent preliminary injunctive relief.
See, e.g. Weseley Software, 977 F. Supp. at 147 (finding that the balance of equities favored enforcing the restrictive covenant notwithstanding that it interfered with a prospective employment opportunity of the defendant-former employee because absent enforcement, the plaintiff-former employer would be competitively disadvantaged and have no adequate remedy at law, whereas the defendant had other employment options and was not foreclosed from ever working for the prospective employer); Cf. A.H. Harris, 94 F. Supp. 3d at 301- motion for a preliminary injunction is denied.
IV. Conclusion
Rule 65 of the Federal Rules of Civil Procedure is denied. SO ORDERED.
s/ Sandra J. Feuerstein
Sandra J. Feuerstein United States District Judge
Dated: August 31, 2016 Central Islip, New York