DS Parent, Inc. v. Teich et al

Filing 28

DECISION and ORDERED, that the provision ( (a) of page 3) of the TRO (Dkt. No. 18) enjoining Teich from working for or rendering services to SAM or other employers engaged in certain enumerated pursuits, is WITHDRAWN; and it is further ORDERED, that, upon Plaintiffs posting of a $45,000 security in accordance with Local Rule 65.1.1 and service of notice on Teich that such security has been posted, the provision ( (a) of page 3) of the TRO (Dkt. No. 18) enjoining Teich from working for or rendering services to SAM or other employers engaged in certain enumerated pursuits shall be REINSTATED without further order of the Court. Signed by Senior Judge Lawrence E. Kahn on January 17, 2014. (sas)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
DS PARENT, INC.; and
DAVIS-STANDARD, LLC
Plaintiffs,
-against-

5:13-CV-1489 (LEK/DEP)

DONALD TEICH; and SAM NORTH
AMERICA, LLC,
Defendants.

DECISION and ORDER
In this action to enforce restrictive covenants, Plaintiffs DS Parent, Inc. (“DS”) and DavisStandard, LLC (“Davis”) sought and received a temporary restraining order that enjoined Defendant
Donald Teich (“Teich”) from: (1) rendering services to his current employer, Defendant Sam North
America, LLC (“SAM”), or other Davis competitors; (2) soliciting or hiring Davis employees; and
(3) soliciting Davis customers. Dkt. No. 18 (“TRO”) at 3-4. Teich and SAM were also enjoined
from making use of Davis’s trade secrets. Id. However, Plaintiffs were not ordered to post any
security. See generally id.
Federal Rule of Civil Procedure 65(c) provides that a temporary restraining order may issue
“only if the movant gives security in an amount that the court considers proper to pay the costs and
damages sustained by any party found to have been wrongfully enjoined or restrained.” If the
covenants are unenforceable, Teich will have been “wrongfully enjoined” from employment with
SAM and will have suffered, at a minimum, damages in the form of lost wages. See IDG USA,
LLC v. Schupp, No. 10-CV-76S, 2010 WL 3749068, at *3 (W.D.N.Y. Sept. 20, 2010). Although
Teich has provided no information regarding his SAM salary, see generally Dkt Nos. 21; 21-1, the

Court, based on information Teich has provided regarding proposed and preliminarily approved
spending on employees in his Davis division, see Dkt. No. 21 ¶ 48, deems a bond of $45,000
sufficient to cover this potential loss. See Doctor’s Assocs., Inc. v. Distajo, 107 F.3d 126, 136 (2d
Cir. 1997) (“Rule 65(c) gives the district court wide discretion to set the amount of a bond.”).
Teich has not pointed to potential damages he will suffer from the other injunctive
provisions, and the Court can readily discern no non-speculative damages.1 See generally Dkt. Nos.
21; 21-1; see also Interlink Int’l Fin. Servs., Inc., 145 F. Supp. 2d 312, 316 (S.D.N.Y.2001)
(declining to require security when the “assumed item of damages can only be described as
speculative and conjectural”). Nor can the Court discern any likelihood that the provision enjoining
Teich and SAM from using or divulging Davis’s trade secrets will be deemed wrongful. Therefore,
no bond is required with respect to these provisions. See Doctor’s Assocs., 107 F.3d at 136 (“Rule
65(c) gives the district court wide discretion to . . . dispense with the bond requirement where there
has been no proof of likelihood of harm.”).
Accordingly, it is hereby:
ORDERED, that the provision (¶ (a) of page 3) of the TRO (Dkt. No. 18) enjoining Teich
from working for or rendering services to SAM or other employers engaged in certain enumerated
pursuits, is WITHDRAWN; and it is further
ORDERED, that, upon Plaintiffs’ posting of a $45,000 security in accordance with Local
Rule 65.1.1 and service of notice on Teich that such security has been posted, the provision (¶ (a) of
page 3) of the TRO (Dkt. No. 18) enjoining Teich from working for or rendering services to SAM
1

SAM could likely point to non-speculative damages it might suffer as a result of the
provisions enjoining Teich from soliciting Davis’s customers or clients. But Rule 65(c) provides
only for damages suffered by the “enjoined or restrained” party.
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or other employers engaged in certain enumerated pursuits shall be REINSTATED without further
order of the Court; and it is further
ORDERED, that the Clerk of the Court serve a copy of this Decision and Order on all
parties in accordance with the Local Rules.
IT IS SO ORDERED.

DATED:

January 17, 2014
Albany, NY

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