Opinion
No. CV 03 0284486-S
April 8, 2004
MEMORANDUM OF DECISION PLAINTIFFS' APPLICATION FOR TEMPORARY INJUNCTION
The plaintiffs, Pascale Sabatasso and Linda Sabatasso d/b/a SoHo Hair Group-Day Spa (SoHo), bring this action against three former employees, Jo T.W. Bruno, Cara Hanson and Jody Brinkmeyer, seeking injunctive relief, damages, punitive damages, costs and attorneys fees on the grounds of breach of contract, tortious interference with a contract and misappropriation of trade secrets arising out of a non-competition and confidentiality agreement. Presently before the court is the plaintiffs' application for a temporary injunction, filed on June 17, 2003. Hearing was held on January 27, and 29, 2004. The parties filed post-hearing memoranda on February 17, 2004.
This action was also brought against Joseph Moscata d/b/a Designers. The plaintiffs withdrew the complaint as to that defendant on June 17, 2003.
In consideration of the evidence and the credibility of witnesses, the court finds the following facts: The plaintiff Pascale Sabatasso is a fifty-four-year-old hair stylist who has operated his own salon for over twenty years. SoHo, which bills itself as "one of the busiest and most vital salons in Connecticut," has twenty-two employees, twelve of whom are hair stylists. The defendants were hired by the plaintiffs to work as stylists at SoHo. The defendant Brinkmeyer was hired in June 2001, the defendant Bruno was hired in September 2001 and the defendant Hanson was hired in February 2002.
Each defendant, at the time of her hiring, reviewed and signed a non-competition and confidentiality agreement (non-compete or agreement) with the plaintiffs. The agreement states in relevant part that "the Employee agrees that for a period of twelve (12) months after he or she ceases to be employed by SOHO for any reason, including termination with or without cause, he or she shall not directly or indirectly:
(1) within the Restricted Area (as hereinafter defined), whether on the employee's own behalf or on behalf of any other person, firm, corporation, or other business organization, render any services or engage in any activities that are the types of services or activities that were performed by the Employee while at SOHO;
(2) solicit for service, render any services or engage in any activities that are competitive with SOHO, to any SOHO client or customer upon whom Employee serviced, had knowledge of by virtue of being employed by SOHO, or in whose account he or she participated or supervised at any time during the twelve (12) months prior to the termination of his or her employment with SOHO; or
(3) solicit employees of SOHO to leave its employ, or offer or cause to be offered employment to any person who was employed by SOHO at any time during the year prior to the termination of Employee's employment with SOHO.
(B) For purposes of this Agreement, the "Restricted Area" shall consist of the geographic area within Connecticut that is located within ten (10) miles from the center of New Haven, Connecticut, and shall also include the following Connecticut towns/cities: New Haven, North Haven, East Haven, West Haven, Hamden, Woodbridge, Orange and Branford."
Each defendant was told that the non-compete was required because SoHo invests in job training, education and marketing for its stylists, and in return, SoHo asks for the non-compete. After the plaintiff reviewed the non-compete with each defendant, he told them that they could leave SoHo within ninety days of employment and that he would destroy the non-compete, provided that they did not take any confidential material with them.
SoHo stylists, including each of the defendants, undergo training and attend courses at SoHo's expense. SoHo is a team-based salon which means a client may be serviced by all stylists and all stylists have access to a client's confidential hair color formulas and hair styling techniques. A client's hair color formula and other techniques are treated as confidential and are not shared with the client.
On April 26, 2003, the three defendants terminated their employment at SoHo. They all left SoHo on that same day and proceeded to place advertisements in the New Haven Register, to distribute a small poster in New Haven, Milford and Orange and to mail approximately 100 post cards, all containing a photograph of the defendants and their names. The defendants announced that they would be working at Designers, a competing salon in Orange, Connecticut. The defendant Hanson had applied to Designers in the second or third week of April and told the defendant Bruno and the defendant Brinkmeyer about the competing salon.
See footnote 1 of this decision.
On May 7, 2003, the defendants began working at Designers in Orange, a restricted area town within the terms of the non-compete. Seventy-five percent of SoHo's customers come from the geographic area identified in the non-compete. The agreement proscribes former employees from working at hair salons within New Haven and contiguous towns and from soliciting or working on SoHo customers for twelve months immediately following termination of employment at SoHo. A ten-mile radius is also included in the agreement to better describe the geographic limitation. There are 300 to 400 hair salons within the non-restricted area and within a thirty-minute driving distance of the defendants.
On May 15, 2003, plaintiffs' attorney sent a letter to the defendants, stating that the plaintiffs would withdraw their action to enforce the agreement if the defendants "immediately" terminated their employment with the competing salon and any other salon in the restricted area. On June 9, 2003, the defendants left the competing salon. The defendant Brinkmeyer lives in Seymour and is now employed in Southbury, neither of which town is in the geographically restricted area provided by the agreement. The defendant Hanson lives in Woodbridge, one of the enumerated restricted area towns in the agreement, and is not working as a stylist. The defendant Bruno lives in East Haven, one of the enumerated restricted area towns in the agreement. She continues to work in her home or in the homes of former SoHo clients, numbering in the thirties. The defendant Hanson and the defendant Bruno do not have a problem with a thirty-minute drive to a salon within the non-restricted area.
On June 17, 2003, the plaintiffs filed the present application for a temporary injunction, seeking, inter alia, to restrain the defendants from any attempts to take the plaintiffs' customers and from entering into competitive employment in violation of the covenant not to compete. Subsequent to the evidentiary hearing, the parties filed simultaneous post-hearing briefs on February 17, 2004.
I DISCUSSION A Standard for Temporary Injunction
"The principal purpose of a temporary injunction is to preserve the status quo until the rights of the parties can be finally determined after a hearing on the merits." (Internal quotation marks omitted.) Clinton v. Middlesex Mutual Assurance Co., 37 Conn. App. 269, 270, 655 A.2d 814 (1995). The plaintiffs have the burden of proving by a preponderance of the evidence the following four-element test for the issuance of a temporary injunction: "(1) the plaintiff ha[s] no adequate legal remedy; (2) the plaintiff would suffer irreparable injury absent [the injunction]; (3) the plaintiff [is] likely to prevail . . .; and (4) the balance of the equities favor[s] the issuance of [the injunction]." Waterbury Teachers Assn. v. Freedom of Information Commission, 230 Conn. 441, 446, 645 A.2d 978 (1994).
"The standard for granting a temporary injunction to enforce a covenant not to compete, however, is somewhat different in that the plaintiff does not need to prove irreparable harm. While ordinarily proof of imminent harm is essential, in this type of case there is no such requirement. It has long been recognized in this state that a restrictive covenant is a valuable business asset which is entitled to protection . . . Irreparable harm would invariably result from a violation of the defendant's promises . . . The reason for this is that such a plaintiff's actual injury is not susceptible of determination to its entire extent but is estimable largely by conjecture and prediction." (Internal quotation marks omitted.) Century 21 Access America v. Lisboa, Superior Court, judicial district of Ansonia-Milford at Milford, Docket No. CV 03 081901 (July 22, 2003, Ronan, J.) ( 35 Conn.L.Rptr. 272, 273); see also Mattis v. Lally, 138 Conn. 51, 56, 82 A.2d 155 (1951) (finding that "irreparable damage would inevitably result from a violation of the defendant's promises").
"The standard is also different in that the plaintiff does not have to demonstrate that there is no adequate remedy at law. [W]hile the plaintiff could maintain a claim for damages as to each violation that causes injury the difficulty of proof and the inefficiency of repetitive suits render inadequate the use of successive remedies at law, and injunctive relief is therefore warranted to protect the plaintiff from harm which the restrictive covenant was intended to prevent." (Internal quotation marks omitted.) Century 21 Access America v. Lisboa, supra, 35 Conn.L.Rptr. 273; see also Berin v. Olson, 183 Conn. 337, 342-43, 439 A.2d 357 (1981).
As to the remaining elements of the four-part analysis used to determine whether a temporary injunction should be issued, the plaintiffs must demonstrate that they are likely to prevail and that the balance of the equities favors the issuance of the injunction
B The Arguments
The thrust of the defendants' arguments with regard to whether the plaintiffs are likely to prevail on the merits is that the agreement is unenforceable because it is against public policy and because it is unreasonable.
"A covenant that restricts the activities of an employee following the termination of his employment is valid and enforceable if the restraint is reasonable . . . There are five criteria by which the reasonableness of a restrictive covenant must be evaluated: (1) the length of time the restriction is to be in effect; (2) the geographic area covered by the restriction; (3) the degree of protection afforded to the party in whose favor the covenant is made; (4) the restrictions on the employee's ability to pursue his occupation; and (5) the extent of interference with the public's interests." (Citation omitted.) New Haven Tobacco Co. v. Perrelli, 18 Conn. App. 531, 533-34, 559 A.2d 715, cert. denied, 212 Conn. 809, 564 A.2d 1073 (1989). A finding that any one of the five criteria is unreasonable would invalidate the non-compete. Id., 534.
The defendants first argue that the agreement violates public policy because its only purpose is to stop "client theft." While it may be true that the agreement was included because of concerns that, among other things, defendants would use information gained from the plaintiffs' client lists to solicit business for themselves, it is well settled that "[a]n employer possesses a proprietary right to his customers that he is entitled to protect for a reasonable time." Id., 536, citing May v. Young, 125 Conn. 1, 7, 2 A.2d 385 (1938). In the present case, the restriction on client solicitation for the limited period of one year is reasonable because the plaintiffs are entitled to protect their "proprietary right" to their customers "for a reasonable time." Id.
The defendants next argue that the agreement's "geographic restriction is not reasonable because it may cover up to twenty-one towns, and the plaintiff only does business in one town." The agreement states in relevant part that "the `Restricted Area' shall consist of the geographic area within Connecticut that is located within ten (10) miles from the center of New Haven, Connecticut, and shall also include the following Connecticut towns/cities: New Haven, North Haven, East Haven, West Haven, Hamden, Woodbridge, Orange and Branford." The agreement is limited to a geographic area within a ten-mile radius of center New Haven and to enumerated towns. The agreement is also limited in duration to one year from date of termination.
Restrictive covenants may be held invalid where they are so broad as to "prevent a party from carrying on his usual vocation and earning a livelihood, thus working undue hardship." Mattis v. Lally, supra, 138 Conn. 56. "[T]he application of a restrictive covenant will be confined to a geographical area which is reasonable in view of the particular situation. A restrictive covenant which protects the employer in areas in which he does not do business or is unlikely to do business is unreasonable with respect to area." (Citation omitted.) Scott v. General Iron Welding Co., 171 Conn. 132, 138, 368 A.2d 111 (1976). The Mattis court, upholding a barbershop's non-compete clause, held that a territory of a mile radius from the seller's business was not excessive because "the rest of the state and the world is open to him." Mattis v. Lally, supra, 138 Conn. 56. In Eastcoast Guitar Center, Inc. v. Tedesco, Superior Court, judicial district of Danbury, Docket No. CV 99 0337066 (February 7, 2000, Petroni, J.), however, the court, finding that the geographic area in the non-compete agreement was too broad and not reasonable or necessary to protect the plaintiff's business, reduced the proscribed territory from a 100-mile radius to a thirty-mile radius from the plaintiff's store.
In the present case, a geographic restriction within ten miles of the center of New Haven in which virtually all of the enumerated towns are located is not so vast as to preclude the defendants from carrying out their vocation and earning a livelihood. There are 300 to 400 salons available to them in the non-restricted area and within a thirty-minute driving distance. The defendant Hanson and the defendant Bruno do not have a problem with a thirty-minute drive. Furthermore, the majority of SoHo's clients come from the proscribed area outlined in the agreement. This court finds that the geographic restriction in the agreement is reasonable.
In assessing reasonableness, the court must also consider whether the restriction unreasonably deprives the public of essential goods and services. New Haven Tobacco Co. v. Perrelli, supra, 18 Conn. App. 536. The defendants have not made such an argument. The evidence is otherwise, in light of the hundreds of hair salons within thirty minutes of SoHo, not to mention the salons within the geographic area of the agreement.
As to the restriction prohibiting solicitation and service of SoHo's customers, that covenant pertains to a limited number of individuals for the limited period of one year. This court finds that this restriction is also reasonable.
Furthermore, based on the credible evidence adduced at the hearing in this matter, this court finds that the plaintiffs have sustained their burden to prove that they are likely to prevail on the merits upon a final determination.
C Balancing the Equities
Finally, the defendants make a two-pronged argument that the agreement "is not equitable to enforce because the plaintiff has suffered no injury and because of all the factors that equity compels the court to consider." As previously discussed, Connecticut courts typically find per se irreparable harm when a non-compete clause has been breached. See Century 21 Access America v. Lisboa, supra, 35 Conn.L.Rptr. 273.
As to the defendants' equitable arguments, they assert that they are three young hair stylists who have never owned or operated a salon business and that this works an inequity relative to the experience and relative wealth of the plaintiffs. In fully balancing the equities, however, the court also considers the fact that the three defendants quit the workplace on the same day that they told the plaintiffs they were leaving, and that they proceeded to collaborate in a clear, brazen and orchestrated breach of their non-compete agreements.
As previously stated, "[t]he principal purpose of a temporary injunction is to preserve the status quo until the rights of the parties can be finally determined after a hearing on the merits." (Internal quotation marks omitted.) Clinton v. Middlesex Mutual Assurance Co., supra, 37 Conn. App. 270. Although the status quo has already to some degree changed irreparably, this court is persuaded that the equities demand issuance of a temporary injunction as to the defendant Bruno, even if of only a limited duration, because of the brazen and open disregard of the agreement she has displayed and continues to display since her voluntary termination. Based on the evidence as to the defendant Brinkmeyer and the defendant Hanson, however, issuance of the temporary injunction is not warranted.
II CONCLUSION
Based on the foregoing, the application for a temporary injunction is denied as to the defendant Brinkmeyer and the defendant Hanson. As to the defendant Bruno, the temporary injunction is granted and it is hereby ordered that the defendant Bruno shall adhere to all of the terms and conditions provided for in the agreement for a period of one year from the date of her voluntary termination. The parties are to contact the caseflow coordinator to schedule a trial on the merits.
BY THE COURT
Tanzer, Judge