Bhb Investment Holdings LLC v. Steven Ogg
330045
Mich. Ct. App.Feb 21, 2017Background
- Ogg worked for Goldfish-affiliate BHB from 2012–Feb 2015, then joined a direct competitor within 20 miles as a swim instructor.
- Ogg signed a confidentiality, non-disclosure, and non-compete agreement prohibiting work for competitors within 20 miles for one year and prohibiting soliciting Goldfish customers for 18 months.
- Aqua Tots Canton, a direct competitor, hired Ogg in April 2015; BHB sent cease-and-desist letters which Aqua Tots ignored.
- BHB sued Ogg and Aqua Tots (breach of contract, tortious interference, unjust enrichment) and sought a preliminary injunction to bar Ogg from working with Aqua Tots.
- Judge Ryan granted a preliminary injunction; Judge Oxholm later set it aside and denied permanent relief after considering evidentiary record; Judge Popke then granted summary disposition against BHB on multiple claims.
- BHB appeals, arguing the injunction should not have been set aside and that there are genuine issues of fact supporting a permanent injunction and other claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the July 21, 2015 hearing properly set aside the injunction. | BHB contends Judge Oxholm lacked authority to reconsider. | Oxholm was authorized to correct prior omission and hear merits. | No error; proper reconsideration permitted. |
| Whether BHB showed irreparable harm to justify a preliminary injunction. | Ogg’s breach plus potential to transfer know-how threatens Goldfish; irreparable harm shown. | No current irreparable harm; potential harm too speculative. | No irreparable harm established; injunction not warranted. |
| Whether the noncompete was reasonable and enforceable against Ogg. | Noncompete protects confidential teaching methods and customer relationships. | Agreement overly broad for entry-level employee; lacks legitimate business interest; may be unconscionable. | Unenforceability as to broad noncompete for an entry-level employee; some restraint on soliciting clients deemed reasonable. |
| Whether summary disposition was proper on remaining claims (unjust enrichment, interference). | Ogg’s breach and Aqua Tots’ interference harmed Goldfish; training value to BHB. | No proven damages or proper trade secrets; no evidence of solicitation; curriculum not secret. | Summary disposition affirmed; claims dismissed. |
Key Cases Cited
- State Employees Ass’n v Dep’t of Mental Health, 421 Mich 152 (1985) (irreparable harm indispensable for preliminary injunctions; multiple-factor test)
- Kernen v Homestead Development Co, 232 Mich App 503 (1998) (six-factor test for permanent injunctions; reasonableness and public policy)
- Miller-Davis Co v Ahrens Constr, Inc, 495 Mich 161 (2014) (summary disposition standards; limits on recovery when damages are not shown)
- Coates v Bastian Bros, Inc, 276 Mich App 498 (2007) (enforceability of noncompetes; reasonableness in light of circumstances)
- Rooyakker & Sitz, PLLC v Plante & Moran, PLLC, 276 Mich App 146 (2007) (noncompete reasonableness; trade secret/proprietary information considerations)