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Elizabeth Grady Face First, Inc. v. Garabedian

Superior Court of Massachusetts, Middlesex

March 25, 2016

Elizabeth Grady Face First, Inc.
v.
Eleni Garabedian et al No. 133337

          MEMORANDUM OF DECISION AND ORDER ON PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

          Robert B. Gordon, Justice of the Superior Court.

         The Court has reviewed the parties' submissions in connection with Plaintiff's Motion for Preliminary Injunction, and considered the arguments of counsel advanced at the hearing held on March 24, 2016. It is the conclusion of the undersigned that plaintiff Elizabeth Grady Face First, Inc. (" Elizabeth Grady" or the " Company") has demonstrated neither a likelihood of success on the merits of its claims, nor a risk of immediate and irreparable injury absent injunctive relief, nor a balance of relative harms militating in favor of the issuance of a preliminary injunction. For each and all of these reasons, Plaintiff's Motion for Preliminary Injunction shall be DENIED .

         DISCUSSION

         Applying the familiar three-part test of Packaging Industries. Group, Inc. v. Cheney, 380 Mass. 609, 617, 405 N.E.2d 106 (1980), the Court has no difficulty concluding that Elizabeth Grady has failed to establish an entitlement to the extraordinary relief it seeks.

         LIKELIHOOD OF SUCCESS ON THE MERITS

         Elizabeth Grady seeks to enforce a covenant not to compete contained in the Employment Agreement of three former employees who used to work at a Company-owned skin care salon in Burlington, Massachusetts. These three employees, the individual defendants, served as trained aestheticians and massage therapists (in the case of Ms. Garabedian and Ms. Quezada) and as a salon manager (in the case of Ms. Roberts). At hearing, the parties stipulated that Ms. Roberts does not, in fact, presently work in a competitive capacity, and Elizabeth Grady thus voluntarily withdrew its preliminary injunction motion as to her. The remaining two defendants each executed a form Employment Agreement furnished to them by Elizabeth Grady.[1] These Employment Agreements provide, in pertinent part, that:

(1) All " Confidential Information" of Elizabeth Grady (defined to include product development plans, marketing strategies and customer lists) and all " Documents" (defined to include all records and files of the Company, whether in hard copy or electronic media) belong exclusively to Elizabeth Grady and may not be copied, taken, disclosed or used in any way following the termination of employment (Employment Agreement, at paras. 1-2.);
(2) For a period of one year following termination of employment, the employee(s) may not solicit or otherwise encourage customers of the Company to cease or diminish their relationship with the Company, such as by seeking to persuade them to conduct with a third party any of the business activities such customers conduct or could conduct with Elizabeth Grady (Employment Agreement, at para. 4.); and
(3) For a period of one year following termination of employment, the employee(s) may not compete against Elizabeth Grady, such as by working for or providing services on behalf of a business competitive with that of the Company, anywhere within a 25-mile radius of any location where the employee(s) performed services on behalf of the Company. (Employment Agreement, at para. 3.)

         In the present case, there is no evidence that defendants Garabedian or Quezada have copied, taken, disclosed, or used in any manner any Confidential Information or Documents belonging to Elizabeth Grady. Indeed, the record scarcely suggests that either of these retail-level employees enjoyed meaningful access to sensitive information and materials of this nature.[2] There is likewise no evidence that any of the defendants have solicited Elizabeth Grady customers; and the Court observes that Elizabeth Grady does not even allege that any of its clients have begun to patronize the Sofia E. Day Spa where the two individual defendants now work. Plaintiff's entire contract action thus rests on its attempted enforcement of the Employment Agreement's 25-mile non-competition restriction--a restriction the defendants have evidently violated by going to work for a skin care salon and day spa in Lynnfield, Massachusetts, approximately nine miles from Elizabeth Grady's Burlington shop.[3]

          It is well settled that covenants not to compete shall only be enforced to the limited extent they serve a legitimate business interest of the employer. See, e.g., Marine Contractors Co. v. Hurley, 365 Mass. 280, 287, 310 N.E.2d 915 (1974). Although Elizabeth Grady has recited in its pleadings the familiar set of legitimate business interests our courts have recognized as justifying enforcement of a covenant not to compete ( viz. the protection of trade secrets, confidential business information, and customer good will, see Boulanger v. Dunkin' Donuts, Inc., 442 Mass. 635, 641, 815 N.E.2d 572 (2004)), the record contains no evidence beyond conclusory generalities persuading the Court that any of these interests are in fact present in the case at bar.

         Elizabeth Grady runs a retail salon, in which it sells commercialized personal care products and provides on-site skin care treatments, massages, and related health and beauty services to customers. The Company alleges that it has trained the defendants in its skin care service techniques, client management procedures, and such other business methods as salon dress codes, gift certificates, appointments, and sales promotions. Elizabeth Grady has not, however, cited any evidence to suggest that these matters amount to anything more than routine job training for a retail service-provider. There is no evidence, or even a common-sense inference, that any such information is truly proprietary to Elizabeth Grady; no evidence that it is maintained in confidence; and no evidence that it is not broadly known among Company employees and customers alike. Although the Employment Agreements summarily assert that product development plans, marketing initiatives and other business strategies of Elizabeth Grady represent confidential information protected against unauthorized use and disclosure, there is no evidence whatsoever that any of the defendants actually enjoyed access to such information and are thus in a position to exploit it competitively.

         Elizabeth Grady insists that employees like the defendants have been trained in " the Elizabeth Grady way, " and that it is such education and experience that Garabedian and Quezada are now trading on in their work for Sofia E. The Court, however, is unable to discern any aspect of the " Elizabeth Grady way, " so called, that can be considered confidential or proprietary to the Company. Indeed, as plaintiff's counsel conceded at hearing, most of this training occurs at Elizabeth Grady Schools, institutions that teach skin care and massage methods to employees and non-employees alike. If Elizabeth Grady is choosing to impart its professional teachings to persons who are free to compete against the Company as soon as they leave the classroom, such training cannot rationally be considered the kind of trade secret, confidential or proprietary information whose protection compels enforcement of a covenant not to compete. See Chiswick v. Constas, No. 2004-311, 2004 WL 1895044, at *3 (Mass.Super. June 17, 2004) (Kane, J.) [18 Mass. L. Rptr. 104] (" Information is not confidential if competitors could obtain the same information from a third party, or the information is obtainable from publicly available sources").

         In the final analysis, the individual defendants are three retail service providers who worked in a storefront skin care salon. They were naturally trained to perform the functions of aestheticians and massage therapists, and to do so in accordance with Elizabeth Grady's preferred methods. But to enforce a non-compete against employees possessed of no more than this kind of conventional job knowledge and skill is to stretch the reach of a restrictive far beyond the bounds of what Massachusetts law approves. See J.T. Healy & Son v. James A. Murphy & Son, 357 Mass. 728, 740, 260 N.E.2d 723 (1970) (general knowledge, experience, memory and skill constitute assets belonging to the employee); Dynamics Research Corp. v. Analytic Scis. Corp., 9 ...


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