United States District Court, W.D. North Carolina, Charlotte Division
COGBURN UNITED STATES DISTRICT JUDGE.
MATTER is before the court on plaintiff's Motion
for Preliminary Injunction (#5). Having considered
plaintiff's motion and reviewed the pleadings, the court
enters the following Order.
is a former employee of plaintiff, a limited liability
company that provides industrial cleaning and maintenance
services across the southeastern United States. Defendant was
originally hired as a site Superintendent in 2010 and was
employed until March 11, 2018 in a variety of positions.
Plaintiff promoted defendant to the position of Site Manager
on August 25, 2015; in exchange for this promotion, defendant
signed an Employment Agreement (“the Agreement”)
which included a covenant not to compete and an employee
non-solicitation provision. In January 2018, defendant was
again promoted to General Manager, where he performed similar
duties as before but also solicited work from plaintiff's
clients and served as a client contact for multiple clients
February 28, 2018, defendant gave notice of intent to leave
plaintiff; his last day with plaintiff was March 11, 2018.
Within two weeks of leaving employment with plaintiff,
defendant began working for Hill Services, Inc.
(“Hill”) in a similar capacity. On May 11, 2018,
after learning of defendant's new employment, plaintiff
sent defendant and Hill a cease-and-desist letter to remind
defendant of his non-compete and non-solicitation
requirements. However, plaintiff did not believe that
defendant's actions changed as a result of the letter and
filed the instant lawsuit on June 11, 2018.
their Motion for Preliminary Injunction (#5), plaintiff seeks
a preliminary injunction enjoining defendant from (1) using,
disclosing, disseminating or transmitting for any purpose,
including the solicitation of plaintiff's customers,
plaintiff's proprietary and confidential information; (2)
any activity in violation of Sections 5, 6, and 7 of the
Agreement, including soliciting, accepting business from and
interfering with plaintiff's customers for a period of
twelve months; and (3) otherwise violating the Agreement.
Defendant filed a Response (#12) to plaintiff's motion
and both sides presented arguments in a hearing on July 19,
2018. The court will now determine whether a preliminary
injunction is necessary.
to grant injunctive relief is within the sound discretion of
the district court. See Hughes Network Sys. V.
InterDigital Commc'ns Corp., 17 F.3d 691, 693
(4th Cir. 1994). However, granting a preliminary
injunction “requires that a district court, acting on
an incomplete record, order a party to act, or refrain from
acting, in a certain way. The danger of a mistake in this
setting is substantial.” Scotts Co. v. United
Indus. Corp., 315 F.3d 264, 284 (4th Cir.
2002) (citations and internal quotations omitted).
Consequently, a preliminary injunction is “an
extraordinary remedy . . . which is to be applied ‘only
in [the] limited circumstances' which clearly demand
it.” Direx Israel, Ltd. V. Breakthrough Med.
Corp., 952 F.2d 802, 811 (4th Cir. 1992)
(quoting Instant Air Freight Co. v. C.F. Air Freight,
Inc., 882 F.2d 797, 800 (3rd Cir. 1989)). The
injunction must “be tailored to restrain no more than
what is reasonably required to accomplish its ends.”
Consolidation Coal Co. v. Disabled Miners of S.
W.Va., 442 F.2d 1261, 1267 (4th Cir. 1971).
secure a preliminary injunction, a party must establish (1)
that it is likely to succeed on the merits; (2) that it is
likely to suffer irreparable harm in the absence of
preliminary relief; (3) that the balance of equities tips in
its favor; and (4) that an injunction is in the public
interest. See Winter v. Natural Resources Defense
Council, Inc., 555 U.S. 7 (2008). While a balancing test
was previously used, today every preliminary injunction
factor must be “satisfied as articulated” and
courts “must separately consider each Winter
factor.” Pashby v. Delia, 709 F.3d 307, 320
(4th Cir. 2013) (citing The Real Truth About
Obama, Inc. v. FEC, 575 F.3d 342, 347 (4th
Likelihood of success on the merits
determining whether the Agreement and its restrictive
covenants are valid, a restrictive covenant between an
employer and an employee is valid and enforceable under North
Carolina law if it is: “(1) in writing; (2) reasonable
as to terms, time, and territory (3) made part of the
employment contract; (4) based on valuable consideration; and
(5) not against public policy.” Triangle Leasing
Co., Inc. v. McMahon, 327 N.C. 224, 228 (1990);
United Labs., Inc. v. Kuykendall, 322 N.C. 643,
649-50 (1988). A restrictive covenant must also “be no
wider in scope than is necessary” to protect the
legitimate business interests of the employer. Med.
Staffing Network, Inc. v. Ridgway, 194 N.C.App. 649, 656
it is uncontested that the Agreement was in writing and the
non-compete and non-solicitation provisions were made part of
the Agreement. Plaintiff has also shown that valuable
consideration was involved, as in exchange for the Agreement,
defendant received a promotion, a raise in excess of $20,
000, and became eligible for a new bonus structure. Such
consideration is sufficient. See Clyde Rudd & Assoc,
Inc. v. Taylor, 29 N.C.App. 679 (1976) (holding that
consideration was present when a non-compete agreement was
entered into in exchange for advancement of employment and
change in compensation). The Agreement also explicitly
contains an explanation that its provisions are necessary to
protect plaintiff's legitimate business interests,
confidential information, and other assets, and notes that
defendant's duties would involve serving as a client
liaison and contact and otherwise involved important customer
relationships. “[P]rotection of customer relations and
goodwill against misappropriation is well recognized as a
legitimate protectable interest of the employer.”
Kuykendall, 322 N.C. at 651; see also A.E.P.
Indus., Inc. v. McClure, 308 N.C. 393, 408 (1983). As
such, the court does not believe the Agreement's
restrictive covenants are against public policy.
court has also considered whether the non-compete and
non-solicitation provisions are reasonable as to terms, time,
and territory. North Carolina courts consider “the time
and geographic limitations of a covenant not to compete . . .
in tandem.” Okuma Am. Corp. v. Bowers, 181
N.C.App. 85, 89 (2007) (citation omitted). Here, defendant is
restricted for one year from engaging in industrial cleaning
services work for customers he worked for in areas where he
was previously assigned to work for plaintiff in the last
twelve months of his employment. North Carolina courts have
recognized much longer and far-reaching covenants than this,
and the court finds the Agreement's restrictive covenants
to be reasonable. See Hartman v. W.H. Odell &
Assoc.,117 N.C.App. 307, 315 (1994) (noting that our
Supreme Court has recognized that, under certain
circumstances, a five-year covenant may be ...