Brinton Business Ventures, Inc. v. Searle

Filing 34

OPINION AND ORDER: Plaintiffs motion for preliminary injunction 6 is granted, with the modifications set forth in the attached Opinion and Order. In addition, Plaintiff must post a bond of $100,000. Within 10 days of the date of this order, the parties are directed to jointly contact the Courtroom Deputy to set a scheduling conference. Signed on 3/30/2017 by Judge Marco A. Hernandez. (jp)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

BRINTON BUSINESS VENTURES, INC.,
dba Evergreen Vending, dba Vending
Equipment Center, dba Northwest Coffee
Services, dba Avanti Markets Northwest,
Plaintiff,
No. 3:16-cv-02279-HZ
v.
OPINION & ORDER
RICHARD SEARLE,

Defendant.
Bruce L. Campbell
Nicholas H. Pyle
MILLER NASH GRAHAM & DUNN LLP
111 SW Fifth Avenue, Suite 3400
Portland, OR 97204
Attorneys for Plaintiff

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Alex C. Trauman
Jeremy G. Tolchin
MOTSCHENBACHER & BLATTNER LLP
117 SW Taylor Street, Suite 300
Portland, OR 97204
Attorneys for Defendant

HERNÁNDEZ, District Judge:
Plaintiff Brinton Business Ventures, doing business as Evergreen Vending, Vending
Equipment Center, Northwest Coffee Services, and Avanti Markets Northwest (hereinafter,
“Brinton”), seeks to enjoin its former branch manager, Richard Searle, from competing against
Brinton or soliciting Brinton’s customers in violation of the terms of his non-competition
agreement with Brinton. The parties conducted limited discovery in order to fully brief this
motion. The Court held oral argument on March 15, 2017. Brinton’s motion for a preliminary
injunction is granted, subject to this Court’s modifications as detailed below.
BACKGROUND
Brinton contracts with employers to install, service, maintain, and operate “micro
markets” at workplaces around Oregon and Washington. Compl. ¶ 7, ECF 1. Micro markets are
“unattended retail stores located directly on the premises of large employers, offering employees
the opportunity to purchase food, beverages, and other items without leaving their workplace.”
Id. Brinton’s Portland, Oregon branch covers a territory stretching from Longview, Washington,
south to Eugene, Oregon. Id. at ¶ 8.
Mr. Searle accepted an offer to be Brinton’s Portland, Oregon branch manager on
January 8, 2012. Id. at ¶ 9. Upon accepting Brinton’s employment offer, Mr. Searle said he
would resign from his then-current employer on January 27, 2012, and would begin working for
Brinton on January 30, 2012. Id.

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On January 13, 2012, Mr. Searle visited Brinton’s Portland branch office. Id. at ¶ 10. As
discussed in greater detail below, the parties disagree about whether Mr. Searle received a copy
of a non-competition agreement on that day.
At some point between January 13, 2012 and January 23, 2012, Mr. Searle contacted
Brinton and asked if he could start working for Brinton sooner than planned. Id. at ¶ 11. Brinton
agreed to Mr. Searle’s request and permitted him to begin working on January 23, 2012. Id.
On January 23, 2012, Mr. Searle arrived at Brinton’s office and signed a NonCompetition Agreement (hereinafter, “Agreement”) that contained non-competition and nonsolicitation provisions. Compl. Ex. A (“Agreement”), ECF 1-1. The non-competition provision
prohibits Mr. Searle from competing with Brinton in a specified geographic area for two years
after his employment ends with Brinton. Id. The non-solicitation provision prohibits Mr. Searle
from soliciting, for two years after his employment ends with Brinton, any people who were
Brinton’s customers or prospective customers when Mr. Searle worked at Brinton. Id.
On March 17, 2016, Mr. Searle sent an email to Jim Brinton, president of the company,
and Bruce Brinton, vice-president of the company, stating that he wished to resign. Compl. ¶ 18.
While still employed by Brinton, on March 22, 2016, Mr. Searle filed a registration with the
Oregon Secretary of State to establish a new business named R Squared Markets & Vending
Corporation. Id. at ¶ 19. The incorporators listed in the filing with the Secretary of State were
Mr. Searle and Richard Corwin, a general manager at Brinton’s Portland branch who worked
under Mr. Searle’s supervision. Id. On April 1, 2016, Mr. Searle’s employment with Brinton
ended. Id. at ¶ 21. Mr. Corwin continued to work for Brinton until June 15, 2016. Id. at ¶ 22.
In late September of 2016, Brinton’s largest customer in Oregon, Lam Research,
cancelled its contract with Brinton. Id. at ¶ 24. Brinton believes that Mr. Searle “solicited the

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business of Lam Research and induced Lam Research to abandon its relationship with Brinton
and to sign a contract with Mr. Searle’s new business.” Id. at ¶ 25. Mr. Searle and his business
are now operating one or more micro markets on Lam Research’s Tualatin campus. Id. Brinton
also believes that Mr. Searle has induced other customers, such as Nippon Dynowave, to
terminate their relationship with Brinton and enter into business with Mr. Searle. Id. at ¶ 26. Lam
Research and Nippon Dynowave were Brinton customers that Mr. Searle was responsible for
during his time as Brinton branch manager. Id. at ¶¶ 24, 26.
STANDARDS
A party seeking a preliminary injunction “must establish that he is likely to succeed on
the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the
balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v.
Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The plaintiff “must establish that
irreparable harm is likely, not just possible[.]” Alliance for the Wild Rockies v. Cottrell, 632 F.3d
1127, 1131 (9th Cir. 2011) (emphasis in original). The court may apply a sliding scale test, under
which “the elements of the preliminary injunction test are balanced, so that a stronger showing of
one element may offset a weaker showing of another.” Id.
Nevertheless, the party requesting a preliminary injunction must carry its burden of
persuasion by a “clear showing” of the four required elements set forth above. Mazurek v.
Armstrong, 520 U.S. 968, 972 (1997) (per curiam); Lopez v. Brewer, 680 F.3d 1068, 1072 (9th
Cir. 2012) (a “preliminary injunction is an extraordinary and drastic remedy, one that should not
be granted unless the movant, by a clear showing, carries the burden of persuasion”) (quoting
Mazurek, 520 U.S. at 972) (emphasis in original).

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“Due to the urgency of obtaining a preliminary injunction at a point when there has been
limited factual development, the rules of evidence do not apply strictly to preliminary injunction
proceedings.” Herb Reed Enterprises, LLC v. Florida Entm't Mgmt., Inc., 736 F.3d 1239, 1250
n.5 (9th Cir. 2013). Therefore, in deciding a motion for a preliminary injunction, the Court has
broad discretion to consider all arguments and evidence, including hearsay and other
inadmissible evidence, declarations from interested parties, and arguments raised for the first
time in a reply. Johnson v. Couturier, 572 F.3d 1067, 1083 (9th Cir. 2009); Lane v. Dep't of
Interior, 523 F.3d 1128, 1140 (9th Cir. 2008).
DISCUSSION
The Court grants the motion for a preliminary injunction because Brinton establishes a
likelihood of success on the merits and a likelihood of irreparable harm. The balance of the
equities also tips somewhat in Brinton’s favor. The public interest factor is neutral.
I.

Likelihood of Success on the Merits
To succeed on its motion for a preliminary injunction, Brinton must demonstrate a

likelihood of success on the merits of its claims. Brinton alleges that Mr. Searle breached the
parties’ non-competition and non-solicitation agreements.
A. Non-Competition Agreement
To be enforceable under Oregon law, a covenant not to compete must meet both the
requirements of Oregon Revised Statute § (O.R.S.) 653.295 and Oregon’s common law
governing restraints on trade. Nike, Inc. v. McCarthy, 379 F.3d 576, 580-87 (9th Cir. 2004). Mr.
Searle contends that the Agreement in this case is unenforceable because he voided the
Agreement, as allowable under O.R.S. 653.295, and the Agreement is not reasonably limited.

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1. The non-competition provision of the Agreement is voidable.
The parties sharply dispute whether the non-competition provision of the Agreement is
voidable under Oregon law. It is undisputed that Brinton did not provide Mr. Searle with a copy
of the Agreement two weeks before the first day of Mr. Searle’s employment, as required by
O.R.S. 653.295(1)(a)(A). However, Brinton contends that it provided the Agreement to Mr.
Searle more than two weeks before the original agreed-upon employment start date. Thus,
Brinton argues that it should not be punished for accommodating Mr. Searle’s request to start
working for Brinton sooner than the parties had initially planned.
In pertinent part, O.R.S. 653.295 provides:
(1) A noncompetition agreement entered into between an employer and employee is
voidable and may not be enforced by a court of this state unless:
a. (A) The employer informs the employee in a written employment offer
received by the employee at least two weeks before the first day of the
employee’s employment that a noncompetition agreement is required as a
condition of employment[.]
O.R.S. 653.295(1)(a)(A).
The parties agree that, on the first day of his employment, January 23, 2012, Mr. Searle
signed the Agreement. Id. at Ex. C, ECF 7-3. The disagreement centers on when Mr. Searle
received the Agreement from Brinton and whether he received notice in a written employment
offer that a non-competition agreement was required as a condition of employment.
Jim Brinton, President of Brinton, testified in his deposition that, during Mr. Searle’s job
interview, Mr. Brinton told him that he would be asked to sign a non-competition agreement.
Trauman Decl. Ex. B (“Brinton Depo.”) 26:14-17, ECF 19. Mr. Brinton also declares that Mr.
Searle visited Brinton’s office on January 13, 2012, and received a packet of information
regarding his job, including the Agreement. Brinton Decl. ¶ 6, ECF 7. At that point, Mr. Searle

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was slated to start work with Brinton in over two weeks, on January 30, 2012. Id. Only after that
meeting did Mr. Searle arrange to move up his start date to January 23, 2012. Id.
Mr. Searle, however, submits a declaration that directly contradicts Mr. Brinton’s
assertions. Searle Decl., ECF 20. According to Mr. Searle, he was first presented with a proposed
non-competition agreement on his first day of employment with Brinton, January 23, 2012. Id. at
¶ 9. Mr. Searle declares that he did not discuss a non-competition agreement with Mr. Brinton
during their January 13, 2012 meeting. Id. at ¶ 8. In fact, Mr. Searle contends that he did not
receive any documents at all from Brinton during the January 13, 2012 meeting. Id.
The parties also submit conflicting declarations from Shelley Soomann, the highestranking employee in Brinton’s Human Resources Department. First Soomann Decl., ECF 22;
Second Soomann Decl., ECF 25. Ms. Soomann worked for Brinton from approximately June
2010 to June 2012. First Soomann Decl. ¶ 2. In Ms. Soomann’s first declaration, she states that
Brinton did not have a practice of sending or presenting employees with non-competition
agreements in advance of their first day of employment. Id. at ¶ 4. Instead, she says that the
“one-size-fits-all” approach Brinton used to document new hires consisted of the new hire being
presented with a new-hire packet, which included the Agreement, on the first day of
employment. Id. at ¶ 5. She declares that “[c]onsistent with this practice, [she] prepared a newhire packet for Mr. Searle to sign on his first day of employment at Brinton, which was on
January 23, 2012.” Id. Because she was the highest-level human resources employee at Brinton,
Ms. Soomann attests that she would have been expected to be informed if the company intended
to deviate from its usual hiring practices by presenting Mr. Searle with a new-hire packet in
advance of his first day of employment. Id. at ¶ 7.

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However, in Ms. Soomann’s second declaration, she states that she was not involved in
the hiring of Mr. Searle and that she does not know whether Mr. Searle was given a new-hire
packet prior to his first day of employment. Second Soomann Decl. ¶ 6. She also declares that “it
is possible Mr. Searle was given a new-hire packet before his first day of employment.” Id.
Clearly, there are disputes of material facts that go directly to the issue of whether or not
the Agreement was voidable under O.R.S. 653.295 for failure to notify Mr. Searle of the required
non-competition provision “in a written employment offer received by the employee at least two
weeks before the first day of the employee’s employment.” These disputes preclude the Court
from concluding that Brinton’s version of the facts is more likely true than not true. See Int'l
Molders' and Allied Workers' Local Union No. 164 v. Nelson, 799 F.2d 547, 551 (9th Cir. 1986)
(internal citations omitted) (“In deciding a motion for preliminary injunction, the district court ‘is
not bound to decide doubtful and difficult questions of law or disputed questions of fact.’”); JL
Beverage Co., LLC v. Jim Beam Brands Co., 828 F.3d 1098, 1105 (9th Cir. 2016) (reiterating
that “on motion for preliminary injunction, the plaintiff—as the moving party—bears the burden
of establishing the merits of its claims”). Because Brinton fails to establish that the Agreement
was not voidable, the Court proceeds under the assumption that the non-competition provision of
the Agreement was voidable.
2. Mr. Searle did not void the non-competition provision of the Agreement.
The Court’s next task is to determine whether Mr. Searle, in fact, voided the noncompetition provision of the Agreement, as he alleges.
A recent case from the Oregon Court of Appeals is instructive. See Bernard v. S.B., Inc.,
270 Or. App. 710, 350 P.3d 460, review denied, 358 Or. 69, 363 P.3d 500 (2015). In Bernard,
the plaintiff’s legal theories relied on her contention that her noncompetition agreement with the

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defendant was unenforceable under O.R.S. 653.295 because the defendant failed to notify her
two weeks before she started work that a noncompetition agreement would be required. Id. at
712, 350 P.3d at 461. The court found that the evidence established that the noncompetition
agreement was voidable. Id. However, the court explained that “this does not end the analysis.”
Id. at 716, 350 P. 3d at 463. The plaintiff had to show not only that the agreement was voidable,
but that she had actually taken steps to void the agreement. Id.
The Bernard court noted that O.R.S. 653.295 was amended in 2007 to change “the
presumptive status of noncompetition agreements that do not comport with all of the statutory
requirements.” Id. at 719, 350 P.3d at 464. Whereas prior to 2007, such a contract was “void,”
after 2007, the contract is “voidable.” Id. “Put differently, the change to ‘voidable’ means that an
employee who wants be relieved of what the employee believes to be an unenforceable
noncompetition obligation must take affirmative steps to ‘avoid’ that obligation; otherwise, it
remains valid.” Id.
Mr. Searle contends that he voided the Agreement. Mr. Searle submits a letter that was
sent by Mr. Searle’s attorney to Brinton on September 27, 2016. Trauman Decl. Ex. C. Mr.
Searle contends that the letter manifested his election to void any voidable legal obligations
created by the Agreement:
We are unaware of any non-competition obligations that are binding on Mr. Searle as a
former Oregon employee of Brinton. . . . [I]f your client continues to send the threatening
letters to my client, we will initiate a lawsuit in Multnomah Circuit Court where my client
will seek declaratory relief to confirm that he has not violated any alleged covenants
owed to your client.
Id.
Mr. Searle’s argument suffers from a fatal defect. Mr. Searle stopped working for Brinton
in April of 2016 and did not send this letter until Brinton contacted Mr. Searle to threaten “a

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variety of unspecified legal claims . . . including the enforcement of an alleged non-competition
agreement.” Id. At oral argument, Mr. Searle insisted that there was no problem with the timing
of his letter expressing his election to void the Agreement. The Court disagrees.
Mr. Searle correctly points out that O.R.S. 653.295 does not provide a deadline by which
an employee must express his intent to void a non-competition agreement. In addition, Bernard
does not expressly state what point is too late for an employee to void an agreement. However,
this Court can easily draw inferences from Bernard to reach an answer in this case.
In Bernard, plaintiff’s failure to take steps to void her agreement caused the court to rule
against her at summary judgment. Thus, Bernard instructs that a plaintiff cannot wait until
summary judgment proceedings to invoke her intent to void the agreement. Furthermore, the
Bernard court wrote: “The most that plaintiff can show is that the agreement may have been
voidable; however, because it had not been voided at the time that defendant sought to invoke the
contract, the agreement was valid and in effect.” Id. at 719, 350 P.3d at 465 (emphasis added).
This strongly suggests that the Oregon Court of Appeals interpreted O.R.S. 653.295 to require a
plaintiff to void a non-competition agreement prior to the defendant’s effort to enforce the
agreement.
As the Bernard court explained, “[i]t would frustrate the intent of the legislature to hold
that a noncompetition agreement executed without notice is absolutely unenforceable regardless
of the subsequent conduct of the contracting parties (including, for example, an employee's
express ratification of the agreement notwithstanding its voidability).” Id. Here, because Mr.
Searle expressed his intent to void the non-competition agreement only after Brinton sought to
enforce it and once Mr. Searle had already been competing against Brinton for five months, Mr.
Searle did not validly void the agreement. See Restatement (Second) of Contracts § 7 (1981)

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(prompt action is necessary to void a contract and to “prevent the contract from producing the
ordinary legal consequences of a contract”). Thus, Mr. Searle is bound by the Agreement, as
long as it satisfies the common law requirements of reasonableness. See Bernard, 270 Or. App.
at 718, 350 P3.d at 464 (“The propriety of calling a transaction a voidable contract rests
primarily on the traditional view that the transaction is valid and has its usual legal consequences
until the power of avoidance is exercised.”).
3. The non-competition provision of the Agreement is reasonable.
As to the reasonableness of the non-competition restrictions, under Oregon law, a noncompete agreement must meet three requirements in order to be enforceable: “(1) it must be
partial or restricted in its operation in respect either to time or place; (2) it must be on some good
consideration; and (3) it must be reasonable, that is, it should afford only a fair protection to the
interests of the party in whose favor it is made, and must not be so large in its operation as to
interfere with the interests of the public.” Nike, 379 F.3d at 584–85 (citing Eldridge v. Johnston,
195 Or. 379, 245 P.2d 239, 250 (1952)). “To satisfy the reasonableness requirement, the
employer must show as a predicate that it has a legitimate interest entitled to protection.” Id.
(quotations and citations omitted).
Mr. Searle argues that the non-competition provision is overbroad. The non-competition
provision restricts Mr. Searle from competing with Brinton for two years after his termination by
Brinton, “within a distance 30 miles in all directions from any of the Companies [sic] current
customers.” Agreement ¶ 1. Specifically, the Agreement provides that:
[Mr. Searle] will not own, manage, operate, control or be employed by, participate or be
connected in any manner, or in any way be associated in any other relation or capacity
whatsoever with the ownership, management, operation or control of any business
engaged in rendering services related to the vending, marketing and/or distribution of
food, snack or related items to consumers at or near their place of employment[.]

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Id.
Mr. Searle points to Konecranes, Inc. v. Scott Sinclair, 340 F. Supp. 2d 1126 (D. Or.
2004), which offers guidance on how to determine the reasonable scope of a non-compete
agreement. In Konecranes, Mr. Sinclair managed Konecranes’ Portland branch. Konecranes, 340
F. Supp. 2d at 1128. The parties entered into a non-compete agreement which prevented Mr.
Sinclair from competing for a period of 18 months in “[a]ny area in which KCI Konecranes, Inc.
is engaged in business.” Id. at 1130. Konecranes conducted business within a 150 mile radius of
Portland. Id. Therefore, Judge Panner reasoned that the non-compete agreement “would
effectively bar Sinclair from working in the same industry in the principal industrial areas of
Oregon and Washington” as well as within the area of the 65 Konecranes locations in the United
States alone. Id. at 1130-31. “The non-compete agreement [was] not limited to Plaintiff's
Portland branch, or to specific tasks, or to soliciting customers that Sinclair serviced while
employed by Plaintiff.” Id. Judge Panner explained:
In deciding whether a non-compete agreement is reasonable, an important consideration
is whether it merely restricts the former employee from luring away specific accounts
(i.e., those he serviced while employed) or whether it restricts the employee from
competing at all. In the former instance, the employee might gain an unfair advantage,
such as goodwill and inside information, derived from his prior contacts with the client. It
is much harder to justify barring a former employee from competing altogether. The latter
also is contrary to the public interest, and makes it difficult for the employee to pursue his
livelihood. Thus, a restriction that says a stock broker can't solicit his former clients for
one year might be upheld, but a restriction that says he can't work in the industry
altogether might be unreasonable.
Id. Judge Panner concluded that the agreement was “probably not enforceable.” Id. at 1131.
Several years later, Judge Ashmankas similarly found that a non-compete agreement was
not reasonable because it did “not merely restrict defendants from soliciting clients they had
actual contacts with while employed by plaintiff” but, rather, precluded “defendants from
engaging in conduct that even indirectly diverts former or prospective customers from plaintiff.”

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Naegeli Reporting Corp. v. Petersen, No. 3:11-1138-HA, 2011 WL 11785484, at *4 (D. Or. Dec.
5, 2011); see also Actuant Corp. v. Huffman, No. CV-04-998-HU, 2005 WL 396610, at *11 (D.
Or. Feb. 18, 2005) (finding a non-compete agreement unreasonably broad where it prohibited the
employees “from working in the field in a similar position without any regard to his ability to use
(or misuse) the similar position to exploit protectable interests and knowledge gained while
working for plaintiff, to plaintiff's disadvantage and to the advantage of the competitive
business”).
In contrast, a recent unpublished opinion, the Ninth Circuit upheld a non-compete
agreement because the terms guarded against a “substantial risk” that the former employee
would use proprietary information he acquired as an employee to “divert all or part of the
employer's business.” Ocean Beauty Seafoods, LLC v. Pac. Seafood Grp. Acquisition Co., 648 F.
App'x 709, 711 (9th Cir. 2016) (citing Nike, 379 F.3d at 586). The Court explained that “[i]t is
well-established that a noncompete agreement is a reasonable means of protecting against such a
risk.” Id. The Court upheld an injunction encompassing the employer’s “Clackamas Region” and
a 100–mile radius from Mukilteo, Washington. Id.
Here, Mr. Brinton declares that Mr. Searle was responsible for cultivating and
maintaining relationships with Brinton’s customers throughout Oregon and southwest
Washington, “from Longview to Eugene.” Brinton Decl. ¶¶ 9, 11. As a branch manager, Mr.
Searle had “access to, became familiar with, and acquired knowledge about Brinton’s customers,
target customers, employees, operations, pricing methods, delivery schedules, sources of supply,
financial information, margin profiles, product rollouts, marketing projects, pricing strategies,
product allocation, data capabilities, and other confidential information” that Brinton did not
disclose to competitors. Brinton Decl. ¶ 9. Mr. Brinton testified that the effect of the non-

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competition provision’s restriction on place means that Mr. Searle would only be permitted to
compete in eastern Washington, eastern Oregon, or southern Oregon south of Eugene. Brinton
Depo. 62-64, ECF 19.
Mr. Searle argues that the non-competition provision is overbroad because it “does not
merely restrict Searle from doing business with those customers with whom he interacted while
employed at Brinton.” Def.’s Opp. 12, ECF 18. However, as the Ninth Circuit explained, the risk
that an employee could use proprietary information he acquired as an employee to divert all or
part of the employer's business “goes beyond direct solicitation of customers and explicit
disclosure of confidential information.” Ocean Beauty Seafoods, 648 F. App'x at 711. Because
Mr. Searle has not refuted Mr. Brinton’s allegation that he could use information acquired while
working for Brinton to divert part of Brinton’s business, that aspect of the non-competition
provision is reasonable.
However, the geographic scope of the non-competition provision is not reasonable. While
Mr. Searle was responsible for developing relationships with customers from Longview to
Eugene, the non-competition provision restricts him from competing within 30 miles of any of
Brinton’s current customers. Such a restriction is not reasonable. However, “an overly broad
territorial limitation does not automatically make an agreement not to compete unenforceable.”
Ocean Beauty Seafoods, 648 F. App’x at 710-11. Instead, “Oregon law endorses reformation if
necessary to make a noncompete agreement reasonable in scope.” Id.
Therefore, the Court amends the non-competition provision’s geographic scope. Instead
of restricting Mr. Searle from competing within 30 miles of any of Brinton’s current customers,
Mr. Searle is prohibited from competing within 10 miles of any current customer. Restricting

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Mr. Searle in this way will ensure that the non-competition provision serves its purpose without
being overbroad.
B. Non-Solicitation Agreement
In addition to the non-competition provision, the parties’ Agreement contains a nonsolicitation provision:
Employee agrees that for a period of two (2) years after such employment ceases,
regardless of the cause thereof, he/she shall not directly or indirectly aid in soliciting any
business relating to that conducted by Company, as described above from any persons
who were customers or prospective customers of Company prior to the cessation of
his/her employment. Nor, shall they contact any of Company’s existing employees in an
effort to solicit them away from Company.
Agreement ¶ 4. Brinton seems likely to succeed on the merits of its Breach of the NonSolicitation Agreement Claim (Claim 2) because Mr. Searle is currently doing business with at
least two companies, Lam Research and Nippon Dynowave, which were customers of Brinton
while Mr. Searle was a Brinton employee.
Mr. Searle contends that he is not bound to honor the non-solicitation agreement. He
argues that the non-solicitation agreement does not meet the notice requirements of O.R.S.
653.295. However, the statute was amended effective January 1, 2008 to exempt non-solicitation
agreements from the requirements of O.R.S. 653.295. See O.R.S. 653.295(4)(b) (stating that the
requirements of O.R.S. 653.295(1) and (2), including the 2-week notice requirement, do not
apply to “a covenant not to solicit employees of the employer or solicit or transact business with
customers of the employer.”) Furthermore, Mr. Searle did not void the Agreement, as discussed
above.
Mr. Searle next argues that the non-solicitation agreement is overbroad because it forbids
him from doing business with customers with whom he had no direct contact while at Brinton.

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However, he cites no authority for the proposition that this, on its own, renders the nonsolicitation agreement unenforceable.
Mr. Searle, however, has a stronger argument that the non-solicitation is overbroad to the
extent it prohibits him from soliciting business from “prospective customers” of Brinton. See,
e.g., Naegeli Reporting Corp. v. Petersen, No. 3:11-1138-HA, 2011 WL 11785484, at *4 (D. Or.
Dec. 5, 2011) (finding a restriction on conduct that even indirectly diverts former or prospective
customers from plaintiff to be “troubling”). Brinton appears to recognize that this language may
be problematic and responds that “a fair reading of the term ‘prospective customers’ would apply
that term to entities that Brinton was pursuing while Mr. Searle was the branch manager.” Pl.’s
Reply 20, ECF 24. At oral argument, Brinton urged the Court to reform the non-solicitation
provision if needed to narrow the non-solicitation agreement’s breadth to clarify what is meant
by “prospective customers.”
The Court agrees that the non-solicitation agreement should be reformed. Instead of
restricting Mr. Searle from soliciting business from people who were “customers or prospective
customers” of Brinton, Mr. Searle is only restricted from soliciting business from people who
were customers of Brinton prior to the cessation of Mr. Searle’s employment.
II.

Irreparable Harm
The Ninth Circuit recently reiterated that “[a]n enforceable noncompete agreement

affords fair protection to a legitimate interest of the former employer,” and, thus, a breach of the
agreement causes harm. Ocean Beauty Seafoods, 648 F. App'x at 711. “Because the harm is
intangible and difficult to quantify, it qualifies as irreparable.” Id. (citing Rent–A–Center, Inc. v.
Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir. 1991)); see also
Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 841 (9th Cir. 2001) (“Evidence

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of threatened loss of prospective customers or goodwill certainly supports a finding of the
possibility of irreparable harm.”).
While the harm cannot be speculative, see id., here Brinton presents evidence that Mr.
Searle is currently servicing at least two of Brinton’s former customers. Brinton Decl. ¶¶ 19-21.
In addition, Brinton presents evidence that Mr. Searle has solicited at least an additional 10
Brinton customers. Pyle Decl. ¶ 16, Ex. 15, ECF 28-15; Brinton Decl. ¶ 3, Ex. A, ECF 27. Thus,
in the absence of a preliminary injunction, Brinton will likely suffer some irreparable harm in the
form of loss of client relationships. See, e.g., Pac. Kidney & Hypertension, LLC v. Kassakian,
156 F. Supp. 3d 1219, 1228 (D. Or. 2016) (granting a temporary restraining order where the
plaintiff would “likely suffer some irreparable harm in the form of loss of client relationships and
accompanying financial damage” even though there was no evidence that it would “likely suffer
harm to its goodwill or reputation in the absence of temporary injunctive relief”).
III.

Balance of the Equities
Brinton’s likelihood of success on the merits and irreparable harm tips the balance of

equities in its favor as to its demand that Mr. Searle comply with the Agreement. See. e.g.,
Ocean Beauty Seafoods, 648 F. App'x at 711. As in Ocean Foods, the proposed injunction, as
amended by this Court, imposes a burden on Mr. Searle but does not bar him from working
within the micro market and vending industry, as long as he works outside of the designated
geographic area. Id. In addition, “the risk of lost income can be mitigated by requiring [Brinton]
to post a bond ‘to pay the costs and damages sustained by any party found to have been
wrongfully enjoined.’” Id. (citing Fed. R. Civ. P. 65(c)).
Mr. Searle argues that if Brinton obtains the injunctive relief it seeks, he will “be forced
to choose between giving up a career in the micromarket and vending industry, or asking his

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wife to quit her position so they can move far away so Seattle can work.” Def.’s Opp. 15. The
Court disagrees. Instead, granting the injunction will temporarily delay Mr. Searle’s ability to
pursue his career in the same geographic areas in which he worked for Brinton. However, it will
not permanently hinder his ability to pursue his chosen career.
IV.

Public Interest
The public interest does not weigh heavily in this case. The Ninth Circuit has recognized

that Oregon law reflects a balancing of competing policies: “The freedom to pursue one's chosen
occupation is in tension with freedom of contract, and the advocate of competition must grapple
with the argument that noncompete agreements are economically advantageous because they
protect costly investments.” Ocean Beauty Seafoods, 648 F. App’x at 711-12. Because the
Agreement comports with Oregon law, “an injunction enforcing it is not antithetical to any
public interest.” See id.
V.

Bond
While Mr. Searle asks that a bond be set for two million dollars, he submits no evidence

to support his purported loss of livelihood or the need for a two million dollar bond. Brinton
submits Mr. Searle’s deposition, in which he states that R Squared currently generates no profit
and does not pay Mr. Searle a salary or any other income. Searle Depo. 125:8-25, ECF 29-1. Mr.
Searle testified that, currently, his only source of income is his wife. Id.
A bond of two million dollars would be excessive. Instead, the Court grants a bond in the
amount of $100,000. This amount will cover the potential loss that might occur in the course of
litigating this case, if the granting of this injunction is erroneous. See Pulse Techs., Inc. v.
Dodrill, No. CV-07-65-ST, 2007 WL 789434, at *12 (D. Or. Mar. 14, 2007) (calculating a bond

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based on an amount “sufficient to compensate [the plaintiff] for his costs and damages should
this injunction have been improvidently granted”).
CONCLUSION
Plaintiff’s motion for preliminary injunction [6] is granted, with the following
modifications. In paragraph 1 of the Agreement, the parties will replace “within a distance 30
miles” with “within a distance 10 miles.” In paragraph 4 of the Agreement, the parties will
replace “customers or prospective customers” with “customers who were customers of Brinton
prior to the cessation of Mr. Searle’s employment.”
In addition, Plaintiff must post a bond of $100,000. Within 10 days of the date below, the
parties are directed to jointly contact the Courtroom Deputy to set a scheduling conference.
IT IS SO ORDERED.

Dated this __________ day of __________________________, 2017.

_______________________________________________________
MARCO A. HERNÁNDEZ
United States District Judge

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