616 F.Supp.3d 359
S.D.N.Y.2022Background
- Hayley Paige Gutman (Defendant) signed a 2011 employment agreement with JLM Couture (Plaintiff) assigning JLM rights in her designer name, designs, and related intellectual property; the employment term expires August 1, 2022.
- Gutman created Instagram and Pinterest accounts using the handle @misshayleypaige and used them (often collaboratively with JLM staff) to promote Hayley Paige (HP) products, link to JLM sites, and communicate with customers.
- After relations soured, Gutman changed account credentials (late 2019), removed JLM links, refused to share log-ins, deleted some JLM-related posts, and publicly announced plans to launch a competing bridal brand in August 2022.
- JLM obtained a preliminary injunction earlier restricting Gutman’s use and control of various social accounts during the contract term; Gutman was later found in contempt for promotional activity on other accounts.
- JLM moved to modify the injunction: (1) extend control of social accounts beyond the contract term based on conversion/trespass claims; (2) enforce Section 10(e) (five-year post-term prohibition on identifying Gutman as designer of competing goods); (3) extend the contract-term noncompete relief; and (4) add relief enforcing the confidentiality covenant (Section 9(c)).
- The court applied a multi-factor ownership test (how account was held out, purpose of use, employee access/management), found JLM likely to own (or have superior rights to) the Instagram and Pinterest accounts, granted injunctive relief limited to those two accounts and enforced Section 10(e) (through Aug 1, 2027), but denied other extension requests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ownership/control of social accounts; injunctive extension past contract term | JLM: accounts are company property used to market HP brands; conversion/trespass supports continued exclusive control of accounts beyond Aug 1, 2022 | Gutman: she created accounts personally and used personal emails/phone; post-creation uses irrelevant; accounts are her personal property | Court: applied CTLI-style factors, found JLM likely owns or has superior rights to Instagram and Pinterest; enjoined Gutman from changing/transferring/posting on those two accounts and ordered she enable JLM access (injunctive relief limited to those accounts) |
| Enforcement of Section 10(e) (five-year post-term ban on identifying Gutman as designer of competing goods) | JLM: Section 10(e) is unambiguous and bars Gutman from being identified as designer of competing goods for five years after term if trademarks were registered (they were) | Gutman: provision should be read narrowly to bar only use of the Designer’s Name/trademarks; otherwise duplicative/overbroad | Court: Section 10(e) unambiguous and broader than just the Designer’s Name; JLM likely to succeed and would suffer irreparable harm; injunction enforcing Section 10(e) granted (prohibition until Aug 1, 2027) |
| Extend contract-term noncompete relief (paragraph 3(b)) beyond Aug 1, 2022 as equitable remedy for Gutman’s misconduct | JLM: equitable extension justified because Gutman violated injunction and marketed her future brand | Gutman: relief should expire with contract term; additional restraints or sanctions unnecessary | Court: denied extension — contempt sanction already imposed for past violations; Section 10(e) provides post-term protection, so extension of 3(b) not warranted |
| Injunctive relief enforcing confidentiality (Section 9(c)) | JLM: seeks bar on disclosure/use of confidential info and customer lists post-term | Gutman: not likely to disclose; general objections to further restrictions | Court: denied as unnecessary because exclusive control of the Instagram and Pinterest accounts was ordered and JLM made no specific showing of imminent additional disclosure |
Key Cases Cited
- In re CTLI, LLC, 528 B.R. 359 (Bankr. S.D. Tex. 2015) (multi‑factor test for whether social media accounts are business assets vs. personal accounts)
- Int’l Bhd. of Teamsters Loc. 651 v. Philbeck, 464 F. Supp. 3d 863 (E.D. Ky. 2020) (business ownership and conversion of union social media pages)
- Ellington Credit Fund, Ltd. v. Select Portfolio Serv., Inc., 837 F. Supp. 2d 162 (S.D.N.Y. 2011) (elements of conversion under New York law)
- Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010) (preliminary injunction standards)
- Tom Doherty Assocs., Inc. v. Saban Entm’t, Inc., 60 F.3d 27 (2d Cir. 1995) (standard for mandatory injunctions vs. prohibitory injunctions)
- Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110 (2d Cir. 2009) (irreparable harm as key prerequisite for preliminary injunction)
- Grand River Enters. Six Nations, Ltd. v. Pryor, 481 F.3d 60 (2d Cir. 2007) (injury must be actual, imminent, and not speculative for injunction relief)
- N.Y.C. Triathlon, LLC v. NYC Triathlon Club, Inc., 704 F. Supp. 2d 305 (S.D.N.Y. 2010) (loss of goodwill can constitute irreparable harm)