Adecco USA, Inc. et al v. Staffworks, Inc. et al

Filing 118

ORDER granting #108 Motion for Reconsideration. Signed by U.S. District Judge Mae A. D'Agostino on 1/7/21. (ban)

Case 6:20-cv-00744-MAD-TWD Document 118 Filed 01/07/21 Page 1 of 7

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
ADECCO USA, INC. and ADO STAFFING, INC.,
Plaintiffs,
vs.

6:20-CV-744
(MAD/TWD)

STAFFWORKS, INC., ANITA VITULLO,
KAREN WALSER, VICKI RODABAUGH,
DEBROAH ROHDE, MAURICA GLORIA,
BRIANNA FLINT, TAYLER FRAVEL,
KAREN STANDFORD, and SHELLY KRANZ,
Defendants.
____________________________________________
APPEARANCES:

OF COUNSEL:

GORDON & REES LLP NEW YORK OFFICE
1 Battery Park Plaza, 28th Floor
New York, New York 10004
Attorneys for Plaintiffs

JOHN TYLER MILLS, ESQ.

GORDON REES SCULLY
MANSUKHANI LLP
41 South High Street
Suite 2495
Columbus, Ohio 43215
Attorneys for Plaintiffs

TYLER TARNEY, ESQ.
MARY CSARNY, ESQ.

PHILLIPS LYTLE LLP BUFFALO OFFICE
125 Main Street
Buffalo, New York 12203
Attorneys for Defendants

PRESTON L. ZARLOCK, ESQ.
JOSHUA S. GLASGOW, ESQ.

ROSSI & ROSSI, PLLC
FIRM – ALBANY OFFICE
587 Main Street, Suite 302
New York Mills, New York 13417
Attorneys for Defendants

EVAN A. ROSSI, ESQ.
VINCENT J. ROSSI, JR., ESQ.

Mae A. D'Agostino, U.S. District Judge:

Case 6:20-cv-00744-MAD-TWD Document 118 Filed 01/07/21 Page 2 of 7

ORDER
Plaintiffs commenced this action alleging various violations of state and federal laws
against Defendants Staffworks, Inc. and Anita Vitullo, and Defendants Karen Walser, Vicki
Rodabaugh, Deborah Rohde, Maurica Gloria, Brianna Flint, Tayler Fravel, and Karen Standford
(the "Former Employees"). See Dkt. No. 1 at 1. The complaint alleges breach of contract,
tortious interference with contract, tortious interference with business relationships/prospective
economic advantage, actual and threatened trade secret misappropriation under federal and state
law, conversion, and trademark infringement and unfair competition under the Lanham Act. See
id. at ¶¶ 1, 111-161. On July 2, 2020, Plaintiffs filed a motion for a temporary restraining order or
preliminary injunction. See Dkt. No. 13. The Court denied Plaintiffs' motion for a temporary
restraining order and scheduled an evidentiary hearing. See Dkt. No. 14. Following a three-day
evidentiary hearing, the Court granted Plaintiffs' motion in part. See Dkt. No. 71. Plaintiffs then
filed a motion for contempt and sanctions, arguing that Defendants Gloria and Flint violated the
Court's September 15, 2020 Order (the "Order"). Following a hearing, the Court denied Plaintiffs'
motion for contempt and sanctions. See Dkt. No. 96. On November 10, 2020, Plaintiffs filed an
amended complaint which, among other things, added Shelly Kranz as a defendant to this action.
See Dkt. No. 97. Plaintiffs then filed a motion for reconsideration of the Court's Order on its
motion for a preliminary injunction. See Dkt. No. 76. The Court granted that motion in part. See
Dkt. No. 105. Presently before the Court is Defendants' motion for reconsideration of the Court's
Order on Plaintiffs' motion for reconsideration. See Dkt. No. 108. The Court presumes the
parties' familiarity with the facts and refers the parties to its September 15, 2020 Order for a more
detailed recitation of the facts. See Dkt. No. 71. For the following reasons, Defendants' motion is
granted.
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A court may justifiably reconsider its previous ruling if: (1) there is an intervening change
in the controlling law; (2) new evidence not previously available comes to light; or (3) it becomes
necessary to remedy a clear error of law or to prevent manifest injustice. See Delaney v. Selsky,
899 F. Supp. 923, 925 (N.D.N.Y. 1995) (citing Doe v. New York City Dep't of Soc. Servs., 709
F.2d 782, 789 (2d Cir. 1983)). The standard for granting a motion for reconsideration is strict.
Shrader v. CSX Transportation, Inc., 70 F.3d 255, 257 (2d Cir. 1995). A motion for
reconsideration "should not be granted where the moving party seeks solely to relitigate an issue
already decided." Id. Thus, a motion for reconsideration is not to be used for "presenting the case
under new theories, securing a rehearing on the merits, or otherwise taking a 'second bite at the
apple.'" Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998).
Defendants seek reconsideration of the part of the Court's November 30, 2020 Order
enjoining Defendant Walser from violating the non-disclosure provision of her employment
agreement. See Dkt. No. 109 at 8. Specifically, the Court's Order required Defendant Walser to
"abide by the terms of her non-disclosure agreement during the pendency of this case." See Dkt.
No. 105 at 6. Defendants argue that the Order lacks specificity and, thus, violates Rule 65(d) of
the Federal Rules of Civil Procedure. See Dkt. No. 109 at 8.
Defendants also suggest, without necessarily arguing, that the Court did not find any
threatened irreparable harm stemming from non-compliance with the non-disclosure agreement.
See Dkt. No. 109 at 10. However, in the Court's September 24, 2020 Order, the Court found that
Plaintiffs demonstrated likelihood of irreparable harm stemming from violations of the restrictive
covenants – including the non-disclosure agreements – absent an injunction. See Dkt. No. 71 at 58. This finding, in conjunction with the Court's finding of likelihood of success as to Plaintiffs'

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claim regarding Defendant Walser's breach of her non-disclosure agreement, make the Court's
issuance of the November 30, 2020 injunction appropriate.
Defendants now say that they do not concede the enforceability of the non-disclosure
agreements and cite to portions of their briefing on the motion for a preliminary injunction. See
Dkt. No. 109 at 4. It is true that Defendants have not explicitly stated that they do not contest the
enforceablity of the non-disclosure provisions. See Dkt. No. 28. However, apart from general
statements that the employment agreements contain overbroad definitions and their arguments
regarding Plaintiffs' trade secrets claim, there are no arguments as to the enforceability of the nondisclosure agreements. See Dkt. No. 28 at 16, 27. In the section of Defendants' brief addressing
Plaintiffs' likelihood of success on the merits, Defendants discuss choice of law issues, Plaintiffs'
termination and constructive termination of the Former Employees, Plaintiffs' alleged
overreaching, and the Employment Agreement's overbreadth. See id. at 21-26. However, in
discussing overbreadth of the employment agreements, Defendants mention only the nonsolicitation and non-compete provisions. See id. at 24. The Court took Defendants lack of
argument as to enforceability of the non-disclosure provisions as a concession for the purposes of
the motion. In re Application of the Children's Inv. Fund Found. (UK), 363 F. Supp. 3d 361, 368
(S.D.N.Y. 2019), abrogated on other grounds by In Re Guo, 965 F.3d 96 (2d Cir. 2020) (noting
that a party concedes an argument by failing to address it in opposition briefing). Regardless, the
Court's finding that Plaintiffs are likely to succeed on their breach of contract claim regarding
Defendant Walser's breach of the non-disclosure provision is supported by the evidence.
Under New York law, a party asserting a breach of contract claim must allege the
following elements: (i) the existence of a contract; (ii) adequate performance of the contract by the
plaintiff; (iii) breach by the other party; and (iv) damages suffered as a result of the breach. See
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Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir. 1996) (citation omitted); see also Wolff v. Rare
Medium, Inc., 171 F. Supp. 2d 354, 357-58 (S.D.N.Y. 2001) (citation omitted). A non-disclosure
agreement is evaluated in the same manner as other restrictive covenants. See R.R. Donnelley &
Sons Co. v. Fagan, 767 F. Supp. 1259, 1269 (S.D.N.Y. 1991). "'A restraint is reasonable only if
it: (1) is no greater than is required for the protection of the legitimate interest of the employer,
(2) does not impose undue hardship on the employee, and (3) is not injurious to the public.'"
Poller v. BioScrip, Inc., 974 F. Supp. 2d 204, 215 (S.D.N.Y. 2013) (quoting BDO Seidman v.
Hirshberg, 93 N.Y.2d 382, 388-89 (1999)) (emphasis in original).
Defendant Walser's employment agreement provides the following:
Unless required by my job at Adecco, I will never disclose, use,
copy or retain any confidential business information or trade secrets
belonging to Adecco, Adecco's Franchisees, Adecco's customers or
Adecco's suppliers. This confidential information includes, but is
not limited to, methods of operation and/or doing business, salary
and benefit information and other data regarding Adecco's
employees, price lists, sales and recruiting techniques, promotional
methods and information, names and lists of clients, prospective
clients, and/or employees, the nature and content of client contracts
and records, policy and procedures manuals, training methods and
manuals, customized computer software, and other information not
generally known to the public.
See Plaintiffs' Exhibit to the Motion for a Preliminary Injunction ("P. Ex.") 1 at 1.
Defendants have made no argument that the non-disclosure agreement is broader than is
necessary to protect Plaintiffs' legitimate interest, that it imposes undue hardship on Defendant
Walser, or that it is injurious to the public. See Dkt. Nos. 28, 109. As the Court initially found,
Plaintiffs have a legitimate business interest in protecting the goodwill they have fostered with
their customers. See Dkt. No. 71 at 15. The non-disclosure agreement also safeguards Plaintiffs'
confidential information, which is another legitimate business interest. See American Institute of
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Chemical Engineers v. Reber-Friel Co., 682 F.2d 382, 387 (2d Cir. 1982) (quoting Reed, Roberts
Assocs., Inc. v. Strauman, 40 N.Y.2d 303, 308 (1976)). Requiring Defendant Walser to abide by a
non-disclosure provision and prohibiting the disclosure of information regarding Adecco's internal
workings, business strategies, and customized software does not impose an undue burden on
Defendant Walser, nor is it injurious to the public. Thus, the non-disclosure agreement likely is
enforceable.
Plaintiffs also established likelihood of success as to the other elements of this claim.
There is no suggestion that Plaintiffs did not adequately perform their obligations. As the Court
noted, the evidence indicates that Plaintiffs will likely be able to establish Defendant Walser's
breach of the non-disclosure agreement. See Dkt. No. 71. Finally, as the Court discussed, breach
of the restrictive covenants, including the non-disclosure agreements, could cause Plaintiffs
damages in the form of harm to business relationships and lost revenue. See id. at 6-8. Thus, the
Court finds that there was no error in issuing the injunction as to Defendant Walser. However, the
Court will modify the November 30, 2020 Order to better meet the requirements of Rule 65(d).
Accordingly, the Court hereby
ORDERS that Defendants' motion for reconsideration (Dkt. No. 108) is GRANTED; and
the Court further
ORDERS that Defendant Walser must not disclose or copy the following information
belonging to Plaintiffs during the pendency of this case: methods of operation and/or doing
business, salary and benefit information and other data regarding Adecco's employees, price lists,
sales and recruiting techniques, promotional methods and information, names and lists of clients,
prospective clients, the nature and content of client contracts and records, policy and procedures
manuals, training methods and manuals, and customized computer software; and the Court further
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ORDERS that the Clerk of the Court shall serve a copy of this Order on all parties in
accordance with the Local Rules.
IT IS SO ORDERED.
Dated: January 7, 2021
Albany, New York

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