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Moss v. Progressive Design Apparel, Inc. - No. 49A05-1401-PL-3, 2014 Ind. App. Unpub. LEXIS 1203 (Ct. App. Sep. 10, 2014)

Rule:

To obtain a preliminary injunction, the moving party has the burden of showing by a preponderance of the evidence the following: (1) a reasonable likelihood of success at trial; (2) the remedies at law are inadequate; (3) the threatened injury to the movant outweighs the potential harm to the nonmoving party from the granting of an injunction; and (4) the public interest would not be disserved by granting the requested injunction. If the movant fails to prove any of these requirements, the trial court's grant of an injunction is an abuse of discretion.

Facts:

Defendant Donald Moss, a salesman, began working for Plaintiff Progressive Design Apparel, Inc. (PDA) as an independent sales agent in 2010. PDA sells logoed products, promotional items, and apparel. Moss signed non-disclosure and non-compete agreements. As Vice President, Moss had access to confidential company information, and he learned a great deal about PDA's sales operations and company practices. Moss decided he wished to return to acting as an independent sales agent. He asked PDA to destroy the non-compete agreement he had signed. PDA declined to destroy the non-compete agreement. Despite this, Moss led PDA's President to believe that he would continue to act as PDA's sales agent. Moss had begun acting as a sales agent for another company, Priority Press. Shortly after Moss stepped down as PDA's Vice President, Priority expanded to include a promotional and apparel division. Moss facilitated this process by developing business and sales plans. Moss informed PDA's customers that he was working for Priority, and he began offering Priority's products to them. Moss encouraged them to work with him through Priority instead of PDA. PDA terminated its business relationship with Moss and sought a preliminary injunction against him in the superior court. Moss admitted that he read the agreement, and that he knew he was signing a non-compete agreement when he signed it. The trial court ruled in PDA's favor, enjoining Moss from directly or indirectly calling upon any customer of PDA for the purpose of soliciting or selling to such customer any advertising specialty items, among others. Finally, the court ordered PDA to pay a $100 dollar bond. On appeal, Moss contended that PDA failed to establish the requirements for the issuance of a preliminary injunction.

Issue:

Did the trial court err in granting the preliminary injunction to plaintiff employer?

Answer:

No.

Conclusion:

The Court held that PDA was entitled to a preliminary injunction. With regard to the issue of likelihood of success at trial, the Court concluded that the non-compete agreement was enforceable and the trial court did not err in blue-penciling it; thus, PDA established a reasonable likelihood of success at trial. The Court observed that the agreement was not changed. The trial court merely struck a single sentence in the agreement that defined PDA's customers too broadly. With regard to adequacy of remedies at law, the Court found that it was difficult for PDA to establish exactly what business would have gone to PDA if Moss had not done such things. Losses to PDA's good will as a result of Moss's violations of the agreement warranted a finding of irreparable harm. As to the issue of threatened injury and potential harm, the Court agreed with the trial court's conclusion that the harm PDA would suffer if a preliminary injunction were denied exceeded the harm Moss would suffer if it were granted. As to the requirement of public interest, the Court resolved that Moss was not barred from competing in the sense that he may sell advertising specialty items to non-PDA customers. Finally, the Court added that $100 is simply insufficient based on the damages estimated in this case. The Court remanded for a determination of a proper bond.

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