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Robert Satkovich, Appellant-Defendant v. Diverse Staffing Services, Inc., Appellee-Plaintiff
MEMORANDUM DECISION
Case Summary
[1] Robert Satkovich was hired by Diverse Staffing Services, Inc. (“Diverse”), in 2019 as a director of staffing services. As a condition of employment, Satkovich was required to sign an employment agreement (“the Agreement”), which included non-compete provisions. Satkovich resigned from Diverse in March of 2024, and soon thereafter began working for another staffing company, soliciting the business of his former Diverse clients. Diverse sought, inter alia, preliminary and permanent injunctive relief, alleging that Satkovich had violated the terms of the Agreement by competing with Diverse and soliciting its clients, resulting in unjust enrichment. After a hearing in August of 2024, the trial court entered an order granting Diverse's motion for a preliminary injunction. Satkovich claims that the trial court abused its discretion. We affirm.
Facts and Procedural History
[2] Diverse is a staffing and recruiting agency that provides a wide range of staffing, recruiting, and human-resources services to its customers. While Diverse is headquartered in Indianapolis, it maintains offices across the eastern half of the United States, with its Norcross, Georgia, location being its largest in Georgia. On July 31, 2019, Sheri Marr, the executive director of Diverse, emailed Satkovich an offer of employment for a director of staffing services position at Diverse. The letter expressly stated, “Offer of employment is contingent based upon the completion of a satisfactory background check and execution of Employment Agreement/Non-Compete.” Ex. Vol. I p. 7. Satkovich read the letter, signed it, and emailed Marr, “I have signed the attached documents and look forward to joining the team.” Ex. Vol. I p. 6.
[3] On August 6, 2019, employee services specialist Brandi Holstein emailed Satkovich a link to Diverse's online portal and asked him to execute the proper documents prior to his start date. Holstein also emailed Satkovich documents to sign that were specific to his position and the State of Georgia. On August 7, 2019, at around 4:30 p.m., Satkovich emailed Holstein confirming that he would “complete the application later this evening.” Ex. Vol. I p. 91.
[4] The online application portal included the Agreement, Satkovich's federal W-4 form, a payroll deduction form, background check forms, and several Diverse policy forms. To access the portal, Satkovich created a unique username and password. Satkovich completed and affixed his electronic signature onto the documents within the portal, including the Agreement, on August 7, 2019, at around 7:10 p.m. The documents were automatically uploaded to Diverse's human-resources information system at the time, Ultra Staff Edge. On August 8, 2019, Holstein emailed Satkovich, stating, “Thank you for completing the online application.” Ex. Vol. I p. 90.
Employment with Diverse
[5] On August 12, 2019, Satkovich began working at Diverse as the “regional director for the State of Georgia.” Tr. Vol. II p. 42. In 2020, Satkovich became a client-service manager. As a client-service manager, Satkovich's job duties “included daily oversight of operations for the Norcross branch, maintaining, developing, and expanding business with branch customers, securing new customers, and collaborating with [Diverse] leadership to ensure the highest quality of service and customer satisfaction.” Ex. Vol. I p. 62. Satkovich also had access to Diverse's “confidential information, including but not limited to, customer lists, pricing strategies, marketing strategies, customer contacts, business development strategies, technology and staffing requirements, and various customer information.” Ex. Vol. I p. 63.
[6] During his employment, Satkovich serviced Diverse customers in several Georgia counties. In the “last couple of years of [Satkovich's] employment[,]” he had been “responsible for between two to three million dollars’ worth of gross margin, which equated to approximately 25 to 30 accounts.” Tr. Vol. II p. 43. While employed by Diverse, Satkovich had worked with and had access to the confidential information of the following Diverse customers: Customer 1, Customer 2, Customer 3, Customer 4, Customer 5, Customer 6, and Customer 7.
[7] In March of 2024, Satkovich notified Marr that he was resigning from Diverse, claiming that he was retiring to focus on his health and his family. Before he left, Satkovich and Marr informed several of Satkovich's clients that he was leaving.
Employment with Innovative Complete Solutions (“ICS”)
[8] After leaving Diverse, Satkovich began working for Innovative Complete Solutions (“ICS”) as the vice president of operations. ICS is a staffing company that provides staffing and related services to customers in Georgia. It is a competitor to Diverse. Satkovich later transitioned from being an employee of ICS to being a consultant for the company.
[9] In May of 2024, Diverse received a letter from Customer 7 providing a thirty-day notice to terminate its current staffing agreement between two of its locations and Diverse. This termination amounted to an estimated seven-figure loss in yearly gross revenue for Diverse. To investigate the basis for Customer 7's termination notice, Marr directed a Diverse employee, Audrey Braun, to apply for a temporary position with Customer 7. After Braun applied, “she kind of pushed and she said, well, I'd really, you know, I really want to start, so can I just go over to the [staffing] agency, where would I go?” Tr. Vol. II p. 52. Customer 7 provided Braun with two business cards. One of the business cards identified “CFS Staffing,” (“CFS”) while the other identified “ICS” and listed Satkovich as its “Vice President of Operations.” Ex. Vol. I p. 43.
[10] Diverse initially believed that “ICS” was a reference to “Intercontinental Commercial Services, Inc.” (“Intercontinental”). Ex. Vol. I p. 60. CFS and Intercontinental shared an office address, had common ownership, and shared the same staffing and recruiting services as Diverse. Intercontinental, CFS, and ICS all operate in the staffing industry in Georgia as competitors of Diverse. Marr traveled to the business address listed on the “CFS” business card and observed Satkovich at the office. Marr continued to investigate Satkovich's apparent solicitations into July of 2024.
[11] On July 30, 2024, Diverse filed its verified complaint seeking a temporary restraining order, preliminary and permanent injunctive relief, and damages against Satkovich, alleging that Satkovich had been competing with Diverse, soliciting Diverse customers, and that he had violated the Agreement, resulting in unjust enrichment. The trial court entered a temporary restraining order on August 1, 2024, and set a hearing for August 9, 2024.
August Hearing
[12] At the August hearing, Lucas Franey, Diverse's managing director of organizational services, described the company's new-employee procedures during the time in which Satkovich had been hired. Franey testified that “our offer letter is typically sent via email, and there is some other documents that we would send through email or in person, if we had that candidate in front of us at a site.” Tr. Vol. II p. 12. Franey testified that the “welcome email” sent by Holstein to Satkovich contained a link to go to the online application and complete the necessary documents. Tr. Vol. II p. 17. Franey testified that “when a candidate goes into the online application and begins filing out their personal information, that information is then pulled and uploaded to the different documents that they'd be signing, as part of their onboarding.” Tr. Vol. II p. 21.
[13] Franey also testified that, after an employee “completed the electronic signature process,” those documents would be stored in the human-resources information systems. Tr. Vol. II p. 12. Franey testified that the “employee portal” allows employees to “see different documents, their pay stubs” and personal information, which are “stored and available to them” through the online portal. Tr. Vol. II p. 16. Franey testified that the “documents tab” contained “[a]ny documents that were completed via an e-signature on the online application[.]” Tr. Vol. II p. 16.
[14] Viewing Satkovich's employee profile, Franey testified that all “modified dates” for the documents included in the online application, were “identical.” Tr. Vol. II p. 22. “They were August 7th, 2019, and right around a three-minute timeframe from around 7:10 p.m.” Tr. Vol. II p. 22. He testified, “That tells me that Mr. Satkovich completed all the documents and reviewed them. It provided a [(sic)] e-signature and then upon submission, those documents were then loaded during that timeframe.” Tr. Vol. II pp. 22–23. The same e-signature was affixed to each document, including the Agreement. Franey had “no reason to believe” that the documents were not authentic documents electronically signed by Satkovich. Tr. Vol. II p. 23. Franey testified that once the documents are submitted, “those documents are locked into the HR system, and we can't change those documents from their original creation.” Tr. Vol. II p. 24.
[15] Marr also testified at the hearing. Marr testified that Diverse has six offices in Georgia, and that Satkovich had served the following Georgia counties on behalf of Diverse: Gwinnett, Dekalb, Fulton, Douglas, Cobb, Rockdale, and Hall. Marr further testified that all Diverse internal employees enter into employment agreements, non-compete agreements, and non-solicitation agreements with Diverse because the “industry is extremely competitive. We build relationships with clients. There's confidential information as it pertains to client protocol, rates, etcetera.” Tr. Vol. II p. 42. She testified that Satkovich “follow[ed] the same process and enter[ed] into an employment agreement” with Diverse, “or he wouldn't have been hired.” Tr. Vol. II p. 44. She testified that any individual who refused to sign any of the onboarding documents would not be hired.
[16] Marr testified that it was “[a]bsolutely not” possible that Satkovich was never given a noncompete agreement to sign and explained that she “was on the email when the documents were submitted. I review all documents in the portal before he is even brought in for training, so there is no way that there would not have been a noncompete on file signed by [Satkovich] because he would not have been employed.” Tr. Vol. II pp. 75–76. Marr also testified that every employee is provided with a copy of the noncompete agreement and that she believed that Satkovich had been provided with a copy of the Agreement.
[17] Marr testified regarding her investigation of Satkovich's solicitation and attempted solicitations of Customers 1 through 7. She testified that a representative of Customer 1 informed her that Satkovich had called the customer “once a month” since he had resigned from Diverse, and that “they're trying to get in here.” Tr. Vol. II p. 59. Marr testified that Customer 2 had informed her that Satkovich had been at one of their locations “trying to solicit business.” Tr. Vol. II p. 60. Marr testified that Customer 3 indicated to Diverse, after Satkovich had resigned, that Satkovich had called them “asking for orders[,]” Tr. Vol. II p. 64, and that a Customer 4 representative informed Diverse that Satkovich “had reached out, letting [Customer 4] know that he was with a new firm and soliciting their business.” Tr. Vol. II p. 67. Marr testified that Customers 5 and 6 had informed Diverse of similar encounters with Satkovich, but that Diverse had ultimately lost Customer 6 to another competitor, not Satkovich. Marr also testified about her investigation of the loss of the Customer 7 accounts.
[18] Satkovich testified at the hearing that his role at ICS involved evaluating the company's processes and procedures. Satkovich testified that his work at ICS did not involve contacting customers in the staffing industry. Satkovich also testified that he had contacted Customer 7 on behalf of ICS to assist with “setting up some safety issues with them” and “evaluating what they were doing and how they were doing it.” Tr. Vol. II pp. 131, 135. Satkovich introduced as evidence the affidavit of Michael Owens, vice president of operations for complete facility services, indicating that Satkovich “had no involvement” with Customer 7's switch to ICS. Ex. Vol. I p. 115. With regard to Diverse's online employee portal, Satkovich testified that he did not recall if he created the username and password to log in, or if “someone else did[.]” Tr. Vol. II p. 90. He agreed that the password used “could be” distinctive to him personally. Tr. Vol. II p. 91.
[19] On August 16, 2024, Diverse and Satkovich filed their respective proposed findings of fact and conclusions of law. The trial court entered its order granting Diverse's motion for preliminary injunction on September 3, 2024. In the order, the trial court found that Diverse “has established a prima facie case, and thus there is a reasonable likelihood of success on the merits, that [․] Satkovich executed the Employment Agreement.” Appellant's App. Vol. II p. 16. The trial court also found the Agreement to be “valid and enforceable regarding its restraints on Satkovich.” Appellant's App. Vol. II p. 16.
[20] Ultimately, the trial court granted a preliminary injunction in favor of Diverse and ordered the following:
Satkovich, directly or indirectly and for a period of 18 months after his date of resignation, is enjoined from:
(1) disclosing to or using for the benefit of any individual, firm, association, partnership, corporation, or entity any knowledge or information of [Diverse] or [Diverse's] clients obtained, maintained, or developed by Satkovich in the performance of his duties with [Diverse],
(2) Offering for sale, selling, marketing, or providing any same or similar product offered by Satkovich on behalf of [Diverse] during his employment with [Diverse] to any person or entity for whom Satkovich provided services or products on behalf of [Diverse], or for whom Satkovich obtained confidential information, within the previous 24 months prior to his date of resignation within the Georgia counties of Fulton, Gwinnett, DeKalb, Rockdale, Cobb, Hall, and Douglas,
(3) Working for, advising, managing, or acting as an agent or consultant for any entity or person offering, selling, marketing or providing any same or similar product offered by Satkovich on behalf of [Diverse] during his employment with [Diverse] to any person or entity for whom Satkovich provided services or products on behalf of [Diverse], or whom Satkovich obtained confidential information of, within the previous 24 months prior to his date of resignation within the Georgia counties of Fulton, Gwinnett, DeKalb, Rockdale, Cobb, Hall, and Douglas.
Further, Satkovich shall return all confidential information of [Diverse] in his possession, including originals and copies thereof, defined within the Employment Agreement[.]
Appellant's App. Vol. II p. 20.
Discussion and Decision
[21] Satkovich contends that the trial court abused its discretion in granting Diverse's motion for preliminary injunction. Specifically, Satkovich argues that Diverse “failed to meet its burden in presenting each element required for a preliminary injunction to be granted.” Appellant's Br. p. 26.
[22] To obtain a preliminary injunction, the movant must show (1) a reasonable likelihood of success on the merits; (2) the remedies at law are inadequate and there will be irreparable harm during the pendency of the action; (3) the threatened injury to the movant from denying the motion outweighs the potential harm to the nonmovant from granting the motion; and (4) the public interest would not be disserved by granting the injunction.
Vickery v. Ardagh Glass Inc., 85 N.E.3d 852, 859–60 (Ind. Ct. App. 2017), trans. denied.
[23] “The grant or denial of a preliminary injunction rests within the sound discretion of the trial court, and our review is limited to whether there was a clear abuse of that discretion.” Ind. Fam. and Soc. Services Admin. v. Walgreen Co., 769 N.E.2d 158, 161 (Ind. 2002) (citation omitted). An abuse of discretion occurs when the trial court's decision is clearly against the logic and effect of the facts and circumstances or if the trial court misinterprets the law. Ind. High Sch. Athletic Ass'n., Inc. v. Durham, 748 N.E.2d 404, 412 (Ind. Ct. App. 2001).
[24] When determining whether or not to grant a preliminary injunction, the trial court is required to make special findings of fact and state its conclusions thereon. Ind. Trial Rule 52(A). When findings and conclusions are made, the reviewing court must determine if the trial court's findings support the judgment. The trial court's judgment will be reversed only when clearly erroneous. Findings of fact are clearly erroneous when the record lacks evidence or reasonable inferences from the evidence to support them. We consider the evidence only in the light most favorable to the judgment and construe findings together liberally in favor of the judgment.
Hydraulic Exch. & Repair, Inc. v. KM Specialty Pumps, Inc., 690 N.E.2d 782, 785 (Ind. Ct. App. 1998) (citations omitted). In reviewing the trial court's decision, we neither reweigh the evidence nor assess witness credibility. Great Lakes Anesthesia, P.C. v. O'Bryan, 99 N.E.3d 260, 268 (Ind. Ct. App. 2018).
[25] The Agreement at issue involved a non-competition provision, which provision Satkovich disputes as to its enforceability.
To be enforceable, a noncompetition agreement must be reasonable. Unlike reasonableness in many other contexts, the reasonableness of a noncompetition agreement is a question of law. In arguing the reasonableness of a non-competition agreement, the employer must first show that it has a legitimate interest to be protected by the agreement. The employer also bears the burden of establishing that the agreement is reasonable in scope as to the time, activity, and geographic area restricted.
Cent. Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723, 729 (Ind. 2008) (citations omitted).
I. Reasonable likelihood of success
A. Execution of the Agreement
[26] Satkovich contends that Diverse failed to demonstrate a reasonable likelihood of success on the merits because it “failed to demonstrate that there was a valid Agreement[.]” Appellant's Br. p. 27.
To establish a party has a reasonable likelihood of success on the merits, the party must establish a prima facie case. The party is not required to show that he is entitled to relief as a matter of law, nor is he required to prove and plead a case, which would entitle him to relief upon the merits.
Hannum Wagle & Cline Engr., Inc. v. Am. Consulting, Inc., 64 N.E.3d 863, 874 (Ind. Ct. App. 2016) (quotations and citations omitted). Diverse was required to establish a prima facie case through “substantial, probative evidence,” that Satkovich had actually executed the agreement. See Ind. High Sch. Athletic Ass'n v. Martin, 731 N.E.2d 1, 7 (Ind. Ct. App. 2000), trans. denied. “Substantial evidence is that which is more than a scintilla and less than a preponderance.” Id. (quotation omitted).
[27] Satkovich claims that “Diverse failed to present any evidence of a security procedure to authenticate or verify Satkovich's signature[,]” such that the Agreement “cannot be authenticated and [․] is unverified.” Appellant's Br. p. 30. We conclude that the evidence was sufficient to prove that Satkovich executed the Agreement.1
[28] Indiana's Uniform Electronic Transaction Act (“UETA”) “applies to electronic records and electronic signatures that relate to a transaction.” Ind. Code § 26-2-8-103. “Under Indiana law, electronic signatures have the same force and effect as written signatures.” Borjas v. State, 946 N.E.2d 1230, 1232 (Ind. Ct. App. 2011), trans. denied. An electronic signature is “an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.” Ind. Code § 26-2-8-102.
[29] Satkovich claims that Indiana's UETA required Diverse's online portal process to include a “security procedure” including a “unique identifier that would authenticate Satkovich's signature on the Agreement.”2 Appellant's Br. p. 32. The relevant section of Indiana's UETA provides that
(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be proved in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.
(b) The effect of an electronic record or electronic signature attributed to a person under subsection (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement, if any, and otherwise as provided by law.
Ind. Code § 26-2-8-108 (emphasis added).
[30] Based on the language of the statute, we conclude that Diverse met its burden in establishing a prima facie case that Satkovich executed the Agreement. Diverse introduced evidence that on July 31, 2019, Marr emailed Satkovich an offer of employment letter, which was expressly “contingent based upon the completion of a satisfactory background check and execution of Employment Agreement/Non-Compete[,]” Ex. Vol. I p. 7. Satkovich read the offer letter, signed it, and sent it back to Marr. Diverse also introduced evidence that on August 6, 2019, Holstein emailed Satkovich, on his personal email address, a link to the Diverse online portal and asked him to complete the portal prior to his start date, to which Satkovich responded the next day that he would “complete the application later [that] evening.” Ex. Vol. I p. 91. On that evening, at around 7:10 p.m., the electronic signature which read “Robert Satkovich” was affixed onto the documents within the portal, including the Agreement, which was included in the portal. The documents were automatically uploaded to Diverse's human resources information system at the time and on August 8, 2019, Holstein emailed Satkovich stating, “Thank you for completing the online application.” Ex. Vol. I p. 90. Satkovich did not reply, much less deny that he had signed the documents.
[31] Diverse also brought forth evidence that in order to access the portal, Satkovich had been required to create a unique username and password, and that the password which was created for Satkovich's account contained Satkovich's wife's name. Finally, Diverse brought forth evidence that once the documents in the online portal are submitted, “those documents are locked into the HR system,” and Diverse “can't change those documents from their original creation.” Tr. Vol. II p. 24. Considering the evidence most favorable to the trial court's judgment, we conclude that the trial court did not abuse its discretion in finding that there is a reasonable likelihood of success on the merits that Satkovich executed the Agreement.3
B. Breach of the Agreement
[32] To the extent that Satkovich contends that the trial court abused its discretion in determining that he had breached the Agreement, we disagree.4 Marr testified that Customer 1 had informed her that Satkovich had called “once a month” since he had resigned from Diverse, and that “they're trying to get in here.” Tr. Vol. II p. 59. Marr testified that Customer 2 had informed her that Satkovich had been at one of their locations “trying to solicit business[,]” Tr. Vol. II p. 60; that Customer 3 indicated to Diverse, after Satkovich had resigned, that Satkovich had called them “asking for orders[,]” Tr. Vol. II p. 64; and that Customer 4 had informed Diverse that Satkovich “had reached out, letting [Customer 4] know that he was with a new firm and soliciting their business.” Tr. Vol. II p. 67. Marr also testified that Customers 5 and 6 had informed Diverse of similar encounters with Satkovich, but that Diverse had lost Customer 6 to another competitor, not Satkovich. Marr also testified about her investigation of the loss of the Customer 7 accounts, which appeared to reveal that Satkovich had successfully solicited Customer 7, evidenced by the fact that Satkovich was apparently the point of contact (listed on a business card) for Customer 7's new staffing agency for at least one of the two departed locations.
[33] The Agreement provided that, for eighteen months after his employment ended with Diverse, Satkovich “shall not, directly or indirectly[․ o]ffer for sale, sell, market or provide any Restricted Product or Service to a Customer[.]” Ex. Vol. p. 26. A “Customer” is defined in the Agreement as
any person or entity for whom Employer provided services or products within the twenty-four (24) month period preceding the date of application of this provision; and (B) any person or entity for whom Employer provides any product or service during Employee's employment with Employer pursuant to this Agreement; and (C) any person or entity for whom Employer provided services or products during Employee's employment with Employer pursuant to this Agreement, and with respect to whom Employee received or had access to any Confidential Information and/or had any contact or responsibility on behalf of Employer.
Ex. Vol. p. 25. Customers 1 through 7 qualified as “Customers” of Diverse pursuant to, at the very least, subsections (B) and (C) of the “Customer” definition. Furthermore, the record demonstrates that Satkovich had offered staffing services to Customers 1 through 7 for ICS or CFS after he had resigned from Diverse, which was clearly in violation of the Agreement as provided above. The record further demonstrates that after Satkovich had resigned from Diverse, two Customer 7 locations had ceased staffing operations with Diverse, to instead work with ICS and/or CFS, with Satkovich even listed on the business card provided to Customer 7, supporting the conclusion that Satkovich had successfully acquired Customer 7's business for his new employer. The trial court did not err in concluding that Diverse had established that there is a reasonable likelihood of success on the merits on the claim that Satkovich breached the Agreement.
II. Inadequate Remedy at Law
[34] In its order granting preliminary injunction, the trial court determined that “[m]oney damages cannot adequately satisfy damages caused, and damages that may continue to be caused, due to loss of business and customer relationships by Satkovich's solicitation of [Diverse] customers[,]” finding that Diverse “will suffer irreparable harm for which there is no adequate remedy at law.” Appellant's App. Vol. II p. 19.
[35] Satkovich contends that the trial court's conclusion “makes inferences against Satkovich, ignores competing evidence, and misinterprets Indiana law.” Appellant's Br. p. 36. In support of this argument, Satkovich points to the fact that Customers 1 through 5 have remained customers of Diverse. (Appellant's Br. p. 36) Initially, we remind Satkovich that we consider the evidence “only in the light most favorable to the judgment and construe findings together liberally in favor of the judgment.” Hydraulic Exch. & Repair, Inc. 690 N.E.2d at 785. In reviewing the trial court's decision, we will neither reweigh the evidence nor assess witness credibility. O'Bryan, 99 N.E.3d at 268.
[36] The record supports a conclusion that Satkovich attempted to solicit the business of seven Diverse customers, and that he was actually successful in obtaining the business of one of them, that is, Customer 7. Marr testified at the hearing that she had had to “lay off” two employees and that Diverse had lost “approximately 250 placements, and 5 million dollars” in gross revenue as a result of the Customer 7 losses. Tr. Vol. II p. 70. Marr also testified that Diverse is “concerned about” additional harm as a result of Satkovich's solicitations, because of Satkovich's “strong relationships” with Diverse customers. Tr. Vol. II p. 70. The harm from the solicitations, Marr testified, is “detrimental.” Tr. Vol. II p. 70. Furthermore, Diverse admitted into evidence an affidavit of Diverse Staffing Services Director Christine Coley, which provided that a representative of Customer 2 suggested that she “follow-up with [Customer 2's] Marietta, Georgia general manager to strengthen [Diverse]’s relationship with that location” after Satkovich had solicited the location for staffing work. Ex. Vol. p. 48.
[37] Harm to a business's reputation and goodwill support the grant of a preliminary injunction. See, e.g., Barlow v. Sipes, 744 N.E.2d 1, 9 (Ind. Ct. App. 2001) (providing that “the grant of equitable relief was proper not only to provide a complete remedy for [Plaintiff's] economic injury, but also for its reputational harm”), trans. denied; Gleeson v. Preferred Sourcing, LLC, 883 N.E.2d 164, 178 (Ind. Ct. App. 2008) (“Even if a specific dollar amount for lost business could be calculated, thereby making a remedy at law sufficient, losses to Preferred's good will as a result of Gleeson's current and future violations of the Agreement warrant a finding of irreparable harm.”).
[38] Although Customers 1 through 5 remained with Diverse despite Satkovich's solicitations, the record supports a conclusion that the damage to Diverse's goodwill and reputation could not be easily quantified. Satkovich had worked with and had access to confidential information relating to each Customer. Customer 2 even suggested to Diverse that Coley meet with a general manager to repair Diverse's relationship with the company, and the damage Satkovich caused to Diverse's relationships with the remaining customers is nearly impossible to assign a value to. Based on the foregoing, we are unpersuaded by Satkovich's suggestion that the only harm that could have been suffered by Diverse is the “quantifiable loss” of Customer 7, Appellant's Br. p. 42, and conclude that Diverse met its burden in demonstrating irreparable harm.
III. Balance of Harms and Public Interest
[39] Satkovich contends that Diverse failed to adequately demonstrate a balance of harms. We disagree. Diverse had already suffered a major loss when Customer 7 ceased its operations in the two locations Satkovich had solicited, and the potential harm to Diverse remains indefinite. While Satkovich contends that the trial court has somehow “upended the status quo,” he does not explain how. Appellant's Br. p. 44. Enforcement of the Agreement merely requires Satkovich to follow the Agreement, which he had agreed to do when he signed it. The record supports the trial court's conclusion that the “potential harm to Satkovich” from the prohibitions of the Agreement “is far outweighed by the potential harm to” Diverse. Appellant's App. Vol. II p. 19. Therefore, we conclude that the trial court correctly determined that Diverse demonstrated a balance of harms in its favor. Satkovich's arguments to the contrary amount to nothing more than a request to reweigh the evidence, which again, we will not do. See O'Bryan, 99 N.E.3d at 268.
[40] Satkovich also contends that Diverse failed to demonstrate that the public interest would not be disserved by granting the preliminary injunction. Specifically, he contends that “[t]here is an obvious public interest in Indiana for courts not to enforce preliminary injunctions against a party that may not have actually signed the agreement at issue.” Appellant's Br. p. 45. Because we have already concluded that evidence was more than sufficient to establish a likelihood that Satkovich executed the Agreement, we reject this argument. The trial court did not abuse its discretion in concluding that “the public interest is not disserved by protecting a business’ goodwill and customer relationships from a former employee soliciting such customers.” Appellant's App. Vol. II p. 12.
IV. Reasonableness of the Agreement
A. Diverse's Legitimate Interests
[41] Satkovich contends that the trial court abused its discretion in finding that Diverse demonstrated a legitimate interest in enforcing the Agreement. Again, “[i]n arguing the reasonableness of a non-competition agreement, the employer must first show that it has a legitimate interest to be protected by the agreement.” Krueger, 882 N.E.2d at 729 (citation omitted). “To demonstrate a legitimate protectible interest, an employer must show some reason why it would be unfair to allow the employee to compete with the former employer.” Pathfinder Commc'n. Corp. v. Macy, 795 N.E.2d 1103, 1110 (Ind. Ct. App. 2003) (quotation and citation omitted).
[42] [C]ourts have held covenants not to compete valid when they protect an employer's interest in trade secrets, or other confidential information. Conversely, Indiana courts have held that a covenant not to compete which protects an employer's customer list readily available to the public and not regarded as confidential, or general practice that could be observed by anyone, is not valid. In Indiana, the law recognizes a protectable interest in the good will generated between a customer and a business. That good will may be protected with a covenant not to compete.
Norlund v. Faust, 675 N.E.2d 1142, 1154 (Ind. Ct. App. 1997) (citations omitted), trans. denied. While Satkovich contends that customer lists “readily available to the public” and practices which “could be observed by anyone” do not constitute legitimate interests to be protected, Appellant's Br. p. 32, we are unpersuaded that the interests Diverse sought to protect in this case were as openly available as Satkovich suggests.
[43] At the hearing, Marr testified that all Diverse internal employees must enter into employment agreements, non-compete agreements, and non-solicitation agreements with Diverse because the “industry is extremely competitive. We build relationships with clients. There's confidential information as it pertains to client protocol, rates, etcetera.” Tr. Vol. II p. 42. Marr testified that Satkovich had access to confidential information as a part of his job duties at Diverse, including access to “all client data, rates, protocol, everything that pertains to the business in Georgia.” Tr. Vol. II p. 43. The client data Satkovich had access to included identifying information and “[p]oints of contacts” of Diverse clients. Tr. Vol. II p. 43. Furthermore, Marr testified that Satkovich “was responsible for between two to three million dollars’ worth of gross margin, which equated to approximately 25 to 30 accounts.” Tr. Vol. II p. 43.
[44] Marr also testified that, during the transitionary period after Satkovich had given his notice of resignation to Diverse, he and Marr had even met with clients to personally deliver the news “because he had such strong relationships with so many clients that [Marr] knew that they were going to be devastated[.]” Tr. Vol. II p. 49. Because of Satkovich's strong relationships with Diverse clients, Diverse was concerned about the “detrimental” harm to result from Satkovich soliciting Diverse clients after his resignation. Tr. Vol. II p. 70. Furthermore, Marr testified to Satkovich's attempted solicitations of Customers 1 through 7, which resulted in at least two Customer 7 branches actually ceasing to do business with Diverse in order to work with ICS instead.
[45] In Satkovich's testimony, he admitted that ICS is a competitor to Diverse, and testified that while he worked for Diverse, he had had “access to information relating to Diverse customers[,]” including “[t]heir names, their contact people[․ t]heir addresses, their phone numbers[․ t]heir customer demands, how many employees they needed, what their business cycle was,” and “customer pricing information.” Tr. Vol. II p. 101. Satkovich also admitted to having “[v]ery good relationships” with the customers on behalf of Diverse. Tr. Vol. II p. 101.
[46] The foregoing evidence, at a minimum, supports a reasonable conclusion that Satkovich had had access to confidential information relating to clients of Diverse and their contact information, and that an important part of Diverse's business model includes building positive relationships with clients, which Satkovich admitted to having done during his tenure at Diverse. It is clear from the record that Satkovich's role at Diverse involved fostering relationships with Diverse clients, and Diverse had a legitimate interest in protecting the goodwill of its business after Satkovich resigned. In the order granting preliminary injunction, the trial court found that the “restraints on Satkovich set out in the [Agreement] are reasonably necessary to protect [Diverse's] legitimate business interests relating to its customers, goodwill, and confidential information.” Appellant's App. Vol. II p. 17. The trial court did not abuse its discretion in reaching this conclusion. See Durham, 748 N.E.2d at 412.
B. Terms of the Agreement
[47] Satkovich also contends that the Agreement was unreasonable in its limitations on geographic scope and activity, and that the trial court's order “rewrites the restrictions outlined in the Agreement.” Appellant's Br. p. 46. We conclude that the Agreement was reasonable within the context of the trial court's order.
[48] “To be enforceable, a noncompetition agreement must be reasonable. Unlike reasonableness in many other contexts, the reasonableness of a noncompetition agreement is a question of law.” Krueger, 882 N.E.2d at 729 (citation omitted). In arguing the reasonableness of a non-competition agreement, the employer must show, in addition to legitimate interests, that the agreement is “reasonable in scope as to the time, activity, and geographic area restricted.” Id. “If a noncompetition agreement is overbroad and it is feasible to strike the unreasonable portions and leave only reasonable portions, the court may apply the blue pencil doctrine to permit enforcement of the reasonable portions. The blue pencil doctrine permits excising language but not rewriting the agreement.” Id. at 730 (citations omitted).
[49] As it relates to geographic scope, the Agreement specified, in separate, easily distinguishable portions, that a “Restricted Area” in which Satkovich could not compete with Diverse included, inter alia, “[t]he county or counties in which any office of Employer to which Employee has been assigned[,]” and “contiguous counties.” Ex. Vol. I p. 25. Marr testified at the preliminary injunction hearing that Satkovich had served a specific few Georgia counties on behalf of Diverse, and the trial court's order enjoined Satkovich from selling services competitive to Diverse to his previous customers within those specific Georgia counties only. The trial court did not add any additional terms, and in fact, appears to have removed the distinct “contiguous counties” language from the Agreement, which language, as it happens, Satkovich contends was unreasonably broad.
[50] As it relates to prohibited activity, the trial court enjoined Satkovich from engaging in activities specifically delineated in the Agreement, but removed the “in any competitive capacity” language from the Agreement, which is commonplace under Indiana law. See Macy, 795 N.E.2d at 1114–15 (agreeing that restriction on “ ‘engag[ing] in activities’ ” was divisible and could be deleted from the contract, thus rendering remaining provisions reasonable).
[51] Despite Satkovich's arguments, it is clear that the trial court simply replaced already defined terms in the Agreement, i.e., “Restricted Product or Service” and “Customer,” with necessary portions of their definitions, to enjoin Satkovich from engaging in the activities delineated in the Agreement. This does not constitute rewriting the Agreement.
[52] We affirm the judgment of the trial court.
FOOTNOTES
1. Furthermore, to the extent that Satkovich contends that the Agreement was somehow invalid because Diverse “failed to produce” correspondence showing that a copy of the signed Agreement was provided to Satkovich prior to litigation, Appellant's Br. p. 29, we disagree and conclude that the record demonstrates that Satkovich had had access to the Agreement in his employee portal. Franey testified that under the “documents tab[,]” of the employee portal, “[a]ny documents completed via an e-signature on the online application, would be uploaded immediately to [the documents tab ․] and then if you were able to get into the system and click on the left, you'd be able to go into each document and view it.” Tr. Vol. II p. 16. The Agreement had been one of the documents to be signed in Satkovich's online application.
2. We note that Satkovich relies on several cases from several states outside of Indiana to support his arguments. To the extent that these cases may support Satkovich's position, we note that while foreign authority may be considered persuasive, it is not binding on Indiana courts. See generally Midwest Equip. & Supply Co. v. Garwood, 87 N.E.3d 33, 36–37 (Ind. Ct. App. 2017) (considering the parties’ arguments relating to Illinois and Iowa caselaw but finding the non-binding authority to be unpersuasive).
3. To the extent that Satkovich relies on Indiana Code section 26-2-8-116(d), we note that subsection (d) refers specifically to the electronic authentication and identification procedures that may be implemented with regard to agreements involving “individually identifiable health information,” Ind. Code § 26-2-8-116(c), which is not applicable in this case. See Ind. Code § 26-2-8-116(c), (d).
4. We note that Diverse contends that Satkovich failed to timely raise his remaining arguments. Waiver notwithstanding, we conclude that Satkovich's remaining arguments are without merit.
Bradford, Judge.
Judges Pyle and Kenworthy concur. Pyle, J., and Kenworthy, J., concur.
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Docket No: Court of Appeals Case No. 24A-PL-2321
Decided: October 10, 2025
Court: Court of Appeals of Indiana.
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