Barton Mines Company, L.L.C. v. Miller
1:14-cv-01003
N.D.N.Y.Sep 9, 2014Background
- Barton Mines, a garnet abrasives and waterjet parts supplier, sued former Regional Sales Manager Ricky Miller to enforce a 2‑year post‑employment non‑compete and non‑solicit agreement after he resigned to join H2O Jet.
- Miller executed an Employee Confidentiality and Non‑Competition Agreement restricting work with any entity marketing, selling, or distributing garnet abrasives and waterjet replacement parts and prohibiting solicitation of Barton employees or business for two years post‑termination.
- Barton obtained a New York state court temporary restraining order and sought federal injunctive relief after Miller removed the case to federal court asserting diversity jurisdiction.
- Barton argued Miller had access to confidential pricing, customer lists, national sales strategies, and had been trained at substantial cost, creating a risk of irreparable harm if he worked for H2O Jet.
- Miller and H2O Jet contended the covenants are overbroad, Miller is not a unique employee, H2O Jet does not sell garnet abrasives, and any alleged confidential information may already be accessible through corporate relationships.
- The state court ordered broad discovery (forensic copying of Miller’s devices and communications), which the federal court later found to be an improper fishing expedition and vacated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TRO/ preliminary relief should issue | Barton: likely to succeed on enforcing covenants; Miller will use confidential information and customer relationships; irreparable harm will follow | Miller: covenants overbroad and unenforceable as written; not unique; H2O Jet not full competitor; harm is speculative and monetary | Denied — Barton failed to show likelihood of success or irreparable harm; TRO denied |
| Enforceability of non‑compete / non‑solicit covenants under NY law | Covenants reasonable in time (2 years) and protect legitimate business interests and training investment | Covenants are unlimited in geographic scope and overbroad as to customers/activities; only partial enforcement might be appropriate | Court: covenants, as written, likely overbroad; partial enforcement possible but fact‑specific; plaintiff not shown likely success now |
| Irreparable harm from employee’s new employment | Loss of customer goodwill and unique employee training will irreparably harm Barton | Alleged lost sales are small percentage of business; H2O Jet lacks garnet abrasives; confidential info likely accessible to H2O Jet via corporate affiliates | Held: Barton failed to demonstrate irreparable harm; claimed losses comparable to amounts found insufficient in precedent |
| Validity of state court discovery order (forensic inspection of devices) | Barton sought broad forensic discovery to locate confidential information | Miller argued order was overly broad and amounted to a fishing expedition | Court vacated the production order as overbroad but preserved a preservation order preventing deletion of electronic data |
Key Cases Cited
- Weinberger v. Romero–Barcelo, 456 U.S. 305 (1982) (TROs and preliminary injunctions are extraordinary equitable remedies not granted as of right)
- Blum v. Schlegel, 18 F.3d 1005 (2d Cir. 1994) (standard for TRO: irreparable harm plus likelihood of success or serious questions and balance of hardships)
- Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70 (2d Cir. 1979) (irreparable injury requires inadequacy of monetary damages)
- BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) (New York reasonableness test for restrictive covenants: protectable interest, hardship, public injury; partial enforcement limited)
- Reed, Roberts Ass'n v. Strauman, 40 N.Y.2d 303 (1976) (same three‑factor reasonableness framework for covenants)
- Ticor Title Ins. Co. v. Cohen, 173 F.3d 63 (2d Cir. 1999) (discussion of when a salesman may be "unique" and justify injunctive relief)
- Columbia Ribbon & Carbon Mfg. Co. v. A–1–A Corp., 42 N.Y.2d 496 (1977) (limitations on treating ordinary salespeople as unique employees)
- Lanvin, Inc. v. Colonia, 739 F. Supp. 182 (S.D.N.Y. 1990) (loss of a modest percentage of sales does not necessarily constitute irreparable harm)