INGENUIT LTD v. HARRIFF (2006)

In an action, inter alia, to recover damages for breach of an employment contract, the defendant appeals from an order of the Supreme Court, Kings County (Ambrosio, J.), dated January 30, 2006, which granted the plaintiffs' motion for a preliminary injunction enjoining the defendant from soliciting the plaintiffs' clients and utilizing the plaintiffs' trade secrets and proprietary information.

ORDERED that the order is modified, on the facts, by adding thereto, after the words “soliciting clients of either of the plaintiffs,” the words “until July 15, 2006;” as so modified, the order is affirmed, with costs to the plaintiffs.

 In order to establish their entitlement to a preliminary injunction, the plaintiffs were required to demonstrate (1) a likelihood of success on the merits, (2) irreparable injury absent the grant of such preliminary injunctive relief, and (3) a balance of the equities favoring its position (see Doe v. Axelrod, 73 N.Y.2d 748, 750, 536 N.Y.S.2d 44, 532 N.E.2d 1272;  W.T. Grant Co. v. Srogi, 52 N.Y.2d 496, 517, 438 N.Y.S.2d 761, 420 N.E.2d 953;  Manhattan Real Estate Equities Group, LLC v. Pine Equity, NY, 16 A.D.3d 292, 791 N.Y.S.2d 418;  Battenkill Veterinary Equine v. Cangelosi, 1 A.D.3d 856, 857, 768 N.Y.S.2d 504;  Bollengier v. Gulati, 233 A.D.2d 721, 650 N.Y.S.2d 56).

 The plaintiffs allege that the defendant breached two employment contracts that each contained a promise that he would not solicit their clients for a period of one year following the termination of his employment relationship with them.   Although the plaintiffs were entitled to a preliminary injunction, the Supreme Court should have provided that the provision of the preliminary injunction that enjoined the defendant from soliciting the plaintiffs' clients expired on July 15, 2006, which is one year after the defendant left the plaintiffs' employment.

 Nonetheless, the plaintiffs demonstrated a likelihood of success on their causes of action sounding in unfair competition and misappropriation of trade secrets and proprietary information (see Town & Country House & Home Service v. Newbery, 3 N.Y.2d 554, 170 N.Y.S.2d 328, 147 N.E.2d 724;  cf. Pearlgreen Corp. v. Yau Chi Chu, 8 A.D.3d 460, 778 N.Y.S.2d 516;  Walter Karl, Inc. v. Wood, 137 A.D.2d 22, 27, 528 N.Y.S.2d 94;  Greenwich Mills Co. v. Barrie House Coffee Co., 91 A.D.2d 398, 402, 459 N.Y.S.2d 454), as well as their cause of alleging tortious interference with prospective business relations, arising from the defendant's wrongful conduct (see Carvel Corp. v. Noonan, 3 N.Y.3d 182, 190–191, 785 N.Y.S.2d 359, 818 N.E.2d 1100;  see Huntingdon Life Sciences v. Stop Huntingdon Animal Cruelty, 27 A.D.3d 420, 811 N.Y.S.2d 109;  Jim Ball Chrysler LLC v. Marong Chrysler–Plymouth, 19 A.D.3d 1094, 1095, 796 N.Y.S.2d 804;  South Fourth St. Props. v. Muschel, 1 A.D.3d 347, 348, 766 N.Y.S.2d 851).

 Because the plaintiffs have made a showing, inter alia, that they would be irreparably harmed if the defendant is permitted to continue utilizing proprietary information he could only have ascertained by wrongful appropriation of the plaintiffs' computer files, the Supreme Court properly granted that branch of the plaintiffs' motion which was for a preliminary injunction enjoining the defendants from utilizing the plaintiffs' trade secrets and proprietary information (see Zellner v. Stephen D. Conrad M.D., P.C., 183 A.D.2d 250, 589 N.Y.S.2d 903;  cf. Carvel Corp. v. Rait, 117 A.D.2d 485, 503 N.Y.S.2d 406).