Full Woodengine 2011 51214

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Attorney(s) appearing for the Case Herrick, Feinstein, LLP,,,, 2 Park Avenue, New York, New York 10016, Attorneys for Plaintiff.,, 202 East State Street, 7th Floor, P.O. Box 6435, Ithaca, New York 14851, Attorneys for Plaintiff. Costello Cooney Fearon, PLLC,, 500 Plum Street, Suite 300, Syracuse, New York, Attorneys for John Berry and John Hall-Thurnheer. Bond Schoeneck & King,, One Lincoln Center, Syracuse, New York, Attorneys for Ciro Javier Garcia Medrano, Roman Cervantes, JRS Turbine Blading & Parts, LLC, Turbinas y Servicios Industriales, S.A. De C.V., and International Turbine Services, Inc. Hancock & Estabrook, LLP,, 1500 AXA Tower I, Syracuse, New York 13202, Attorneys for Daniel Grinolds, Timothy Parker, Eric Bunnell.

Plaintiff employs a total of approximately 170 people at two facilities — one located in Ithaca and another located in Owego — where it manufactures rotating and stationary blades used in steam and gas turbines, axial compressors and hot gas expanders. In this action, it alleges that certain of its former employees — defendants Berry, Hall, Grinolds, Parker and Bunnell (the employee defendants) — engaged in a scheme in concert with defendants Garcia and Cervantes, and various entities owned or controlled by them also named as defendants (collectively, the Garcia defendants), to compete unfairly with plaintiff by, among other things, appropriating plaintiff's confidential information and recruiting its employees to work at a manufacturing facility to be established in the Town of Dryden, Tompkins County. 1 At commencement, plaintiffs sought an ex parte temporary restraining order and moved for a preliminary injunction. A temporary restraint containing a portion of the relief sought by plaintiff (TRO) was granted by order to show cause signed on April 15, 2011, conditioned upon plaintiff filing an undertaking for $750,000 on or before April 26, 2011. The undertaking was timely filed and the court heard oral argument on the preliminary injunction motion on May 11, 2010. It appears that plaintiff's primary aim in seeking a preliminary injunction is to prevent the employee defendants and any of its current employees from providing services to any competing enterprise operated by the Garcia defendants, particularly a new manufacturing facility proposed to be established in the Town of Dryden. In that regard, it seeks to enforce covenants not to compete against Berry and Hall to preclude them from providing services to the Garcia defendants, or from working to establish a competing enterprise; prohibit the Garcia defendants from employing, or accepting any services from, any of the employee defendants or any current employees of plaintiff; and to prohibit all defendants (except the Scolaro firm and Scheer) from establishing any facility which competes with plaintiff's business within 200 miles of Ithaca or Owego.

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Plaintiff also seeks the protection and return of certain information alleged to be confidential and proprietary. To show its entitlement to the requested preliminary injunction — which is a drastic remedy that is not routinely granted — plaintiff must demonstrate: '(1) the likelihood of success on the merits; (2) irreparable injury absent granting the preliminary injunction; and (3) a balancing of the equities in [its] favor' ( H. Meer Dental Supply Co. V Commisso,, 663 [2000] [quotation and citations omitted]; see also Marietta Corp.

V Fairhurst,, 736 [2003]). Whether to grant or deny a preliminary injunction is a decision that rests in the trial court's sound discretion ( see Cooperstown Capital, LLC v Patton, [2009]).

Here, plaintiff has failed to carry the heavy burden necessary to justify exercise of the court's discretion to grant the extraordinarily broad scope of preliminary injunctive relief requested. Berry — plaintiff's former Chief Executive Officer (CEO) — and Hall — its former Chief Financial Officer (CFO) — is each subject to a written employment agreement that contains a restrictive covenant, which plaintiff now seeks to enforce.

Notably, plaintiff does not seek an order that would specifically preclude them from providing services to the Garcia defendants. Rather, plaintiff seeks an order that would only effectively restate the language of the covenant, by prohibiting Berry and Hall from affiliating in any manner with a business that directly competes with plaintiff. Absent a determination as to whether any of the Garcia defendants directly compete with plaintiff's business, such an order would merely engender additional litigation. However, plaintiff also seeks an order prohibiting the Garcia defendants from directly or indirectly hiring, or accepting services from, any of the employee defendants, including Berry and Hall, which would preclude Berry and Hall from providing services to the Garcia defendants. Assuming, without deciding, that it is valid and enforceable, plaintiff has not shown that Berry's or Hall's present conduct violates the restrictive covenant. 2 Notably, the covenant specifically precludes affiliation only with a direct competitor of plaintiff in the business of manufacturing turbine blades.