FILED: NEW YORK COUNTY CLERK 12/20/2016 07:36 PM INDEX NO. 656646/2016 NYSCEF DOC. NO. 8 RECEIVED NYSCEF: 12/20/2016 Frederick D. Braid fred.braid@hklaw.com Katherine Healy Marques katherine.marques@hklaw.com HOLLAND & KNIGHT LLP 31 West 52nd Street New York, New York 10019 (212) 513-3200 (telephone) (212) 385-9010 (facsimile) Attorneys for Plaintiffs SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------------x CAROLINA HERRERA, LTD., Plaintiff, No. v. LAURA KIM and OSCAR DE LA RENTA, LTD., Defendants. ----------------------------------------------------------------x PLAINTIFF S MEMORANDUM OF LAW IN SUPPORT OF APPLICATION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION 1 of 17
TABLE OF CONTENTS Page TABLE OF AUTHORITIES... ii CH IS ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION...1 A. CH IS LIKELY TO SUCCEED ON THE MERITS OF ITS CLAIMS AGAINST DEFENDANTS....2 1. Defendant Kim Breached Her Non-Competition Agreement with CH....2 a. The non-competition restrictions are reasonable....2 B. IF RELIEF IS DENIED, CH WILL SUFFER IRREPARABLE HARM....4 C. THE HARM TO CH IF INJUNCTIVE RELIEF IS NOT GRANTED OUTWEIGHS THE HARM TO DEFENDANT IF IT IS GRANTED....6 D. ODLR TORTIOUSLY INTERFERED WITH CH S AGREEMENT WITH KIM....7 E. CH SHOULD NOT BE REQUIRED TO POST A BOND...7 CONCLUSION...8 #49018969_v4 i 2 of 17
TABLE OF AUTHORITIES Page(s) Cases Am. Broadcasing Cos. v. Wolf, 52 N.Y.2d 394, 420 N.E.2d 363 (1981)...2 BDO Seidman v. Hirschberg, 93 N.Y.2d 282, 712 N.E.2d 1220 (1999)...3 DS Courier Servs., Inc. v. Seebarran, 40 A.D.3d 271, 834 N.Y.S.2d 191 (1st Dep t 2007)...3 Kronos, Inc. v. AVX Corp., 81 N.Y.2d 90, 612 N.E.2d 289 (1993)...7 Lumex Inc. v. Highsmith and Life Fitness, 919 F. Supp. 624 (E.D.N.Y. 1996)...3 Mallory Factor Inc. v. Schwartz, 146 A.D.2d 465, 536 N.Y.S.2d 752 (1st Dep t 1989)...2 Maltby v. Harlow Meyer Savage, 166 Misc.2d 481, 633 N.Y.S.2d 926 (Sup. Ct. N.Y. Cty. 1995) (aff d 223 A.D.2d 516, 637 N.Y.S.2d 110)...3, 4 McLaughlin, Piven, Vogel, Inc. v. W.J. Nolan & Co., Inc. 114 A.D.2d 165, 495 N.Y.S.2d 146 (2d Dep t 1986)...6 Natsource LLC v. Paribello, 151 F. Supp. 2d 465 (S.D.N.Y. 2001)...3, 4 NBT Bancorp Inc. v. Fleet/Norstar Fin. Group, Inc., 87 N.Y.2d 614, 664 N.E.2d 492 (1996)...7 Stiefel & Co. v. Blitz, No. 93 Civ. 6080 (PNL), 1993 WL 526386 (S.D.N.Y. Dec. 14, 1993)...5 Ticor Title Ins. Co. v. Cohen, 173 F.3d 63 (2d Cir. 1999)...4 W.T. Grant Co. v. Srogi, 52 N.Y.2d 496, 420 N.E.2d 953 (1981)...2 Other Authorities CPLR 6301...1 #49018969_v4 ii 3 of 17
CPLR 6313(c)...8 #49018969_v4 iii 4 of 17
PRELIMINARY STATEMENT Plaintiff Carolina Herrera ( Carolina Herrera or CH ) respectfully submits this Memorandum of Law, together with the Affidavit of Giuseppe Celio, sworn to on December 20, 2016 ( Celio Affidavit or Celio Aff. ), and the Affirmation of Frederick D. Braid dated December 20, 2016 ( Braid Affir. ), in support of Carolina Herrera s application by Order to Show Cause for a temporary restraining order and preliminary injunction, pursuant to CPLR 6301, preventing Defendants Laura Kim and Oscar de la Renta, Ltd. ( Oscar de la Renta or ODLR ) from continuing to breach Kim s non-competition agreement with CH, or induce such breach, by providing creative design services for ODLR. STATEMENT OF FACTS To avoid repetition, the Court is respectfully referred to the accompanying Affidavit of Giuseppe Celio for a recitation of the relevant facts with supporting documentation evidencing Kim s continuing contractual obligations to CH and her violation of same with the inducement and encouragement of ODLR. ARGUMENT CH IS ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION Defendant breached her Agreement with CH by working for CH s direct competitor within six months following the termination of her employment with CH, i.e., between October 8, 2016 and April 8, 2017. Carolina Herrera s right to secure Kim s six-month non-competition period is clear under contract. CH will continue to suffer irreparable harm if Kim is not prevented from providing services to ODLR during the term of her non-competition period. Accordingly, a temporary restraining order and preliminary injunctive relief requiring Kim to 5 of 17
observe the non-competition period, and requiring ODLR to refrain from employing her prior to April 8, 2017, is warranted. To obtain a temporary restraining order under New York law, CH must show: (1) the likelihood of success on the merits; (2) that it will suffer irreparable injury absent the preliminary injunction; and (3) a balancing of the equities in its favor. See, e.g., W.T. Grant Co. v. Srogi, 52 N.Y.2d 496, 517, 420 N.E.2d 953, 963 (1981). A. CH IS LIKELY TO SUCCEED ON THE MERITS OF ITS CLAIMS AGAINST DEFENDANTS. Because Kim breached her enforceable contractual obligations to CH, with ODLR s knowing and intentional inducement and assistance to do so and for other reasons detailed below CH is likely to prevail on the legal claims asserted against Kim and ODLR. 1. Defendant Kim Breached Her Non-Competition Agreement with CH. New York law explicitly recognizes the validity and enforceability of non-competition restrictive covenants where the time and geographical scope of the covenant are reasonable, the burden imposed upon the employee is reasonable, public policy is not harmed by the restriction, and the restriction is necessary for the employer s protection. See, e.g., Mallory Factor Inc. v. Schwartz, 146 A.D.2d 465, 468, 536 N.Y.S.2d 752 (1st Dep t 1989) (upholding an 18-month restrictive covenant as reasonable and finding employee breached non-compete agreement). Legitimate interests that an employer may lawfully seek to protect include circumstances, present here, where the employer is exposed to special harm because of the unique nature of the employee s services. Am. Broadcasing Cos. v. Wolf, 52 N.Y.2d 394, 403, 420 N.E.2d 363 (1981). a. The non-competition restrictions are reasonable. New York courts assess the enforceability of restrictive covenants on a fact-specific basis to determine whether they are reasonable, i.e., whether the restrictions on the employee are #49018969_v4 2 6 of 17
appropriately linked to the employer s legally protectable interests and not unduly burdensome. See BDO Seidman v. Hirschberg, 93 N.Y.2d 282, 389, 712 N.E.2d 1220 (1999). Here, the restrictions on Defendant Kim are reasonable as they are narrowly-tailored, provide her with continuing salary and benefits, and allow her to pursue professional opportunities other than the narrow, direct competition that ODLR presents, for the six-month period of her non-competition period. Such a covenant is, on its face, reasonably limited, both temporally and geographically, and not unduly burdensome, and therefore prima facie enforceable. DS Courier Servs., Inc. v. Seebarran, 40 A.D.3d 271, 272, 834 N.Y.S.2d 191, 192 (1st Dep t 2007) (quoting Am. Para Professional Sys. v. Examination Mgt. Servs., 214 A.D.2d 413, 414, 625 N.Y.S.2d 33 (1st Dep t 1995)). Comparable restrictions have been enforced by injunction in state and federal courts in New York. In Natsource LLC v. Paribello, 151 F. Supp. 2d 465, 472 (S.D.N.Y. 2001), the court enforced a combination notice period and non-compete sitting out period during which a commodities broker continued to receive his base salary (but no bonus). Comparably, in Lumex Inc. v. Highsmith and Life Fitness, 919 F. Supp. 624, 629 (E.D.N.Y. 1996), the court upheld a six-month restrictive covenant, noting that, the period of time during which the former employee cannot work is of a reasonably short duration, namely, six months and observing approvingly that the agreement provided for continuing compensation and payment of health and life insurance premiums. The court in Maltby v. Harlow Meyer Savage, 166 Misc.2d 481, 486, 633 N.Y.S.2d 926, 930 (Sup. Ct. N.Y. Cty. 1995) (aff d 223 A.D.2d 516, 637 N.Y.S.2d 110) came to the same conclusion: this court finds that the restrictive covenants at issue herein are reasonable on condition that plaintiffs continue to receive their salaries for six months while not employed by a competitor. The restrictive covenants are reasonable in that each protects the #49018969_v4 3 7 of 17
employer from severe economic injury while at the same time it protects the employee s livelihood, by requiring that he be paid his base salary. Here, Carolina Herrera seeks only to preclude Kim from the most direct competition, having expressly allowed her to work for fashion houses other than ODLR, CH s primary and direct competitor, and to continue to work on her own brand, Monse, which targets a different market than CH and has earned her considerable accolades and industry attention. (See Celio Aff. 5, 7, 21, Ex. O.) The combination of continuing Kim at half salary (i.e., $225,000) while allowing her to work full-time for her own business, Monse, in contrast to the restriction in the Agreement that limited her to spending no more than five percent of her time on Monse or to work anywhere else in the industry other than with CH s direct competitor, is unassailable. B. IF RELIEF IS DENIED, CH WILL SUFFER IRREPARABLE HARM. Once the Court determines that Kim s non-compete agreement is reasonable, an injunction should issue because her services to CH are deemed special, unique or extraordinary. See, e.g., Ticor Title Ins. Co. v. Cohen, 173 F.3d 63, 65 (2d Cir. 1999). If the unique services of [an] employee are available to a competitor, the employer obviously suffers irreparable harm. Natsource LLC, 151 F. Supp. 2d at 469 (quoting Ticor, 173 F.3d at 70) (finding irreparable harm if former employee is allowed to work for a competitor within the 120-day restrictive covenant period); see also Maltby v. Harlow Meyer Savage, Inc., 166 Misc. 2d 481, 633 N.Y.S.2d 926 (Sup. Ct. N.Y. Cty. Sep. 12, 1995) (aff d 223 A.D.2d 516, 637 N.Y.S. 2d 110 (1st Dep t 1996)) (granting temporary restraining order and preliminary injunction enforcing six-month paid noncompetition period for employees deemed unique). Courts have enforced restrictive covenants in comparable circumstances where the employee at issue performed special creative services akin to the design or creative director work #49018969_v4 4 8 of 17
performed by Defendant Kim. In one strikingly comparable case to the instant facts, Daily News, L.P. v. McAlary, N.Y.L.J., Sept. 16, 1993 at 25, a well-known newspaper columnist, Michael McAlary, had worked for the New York Post prior to entering into a lucrative two-year contract with the New York Daily News. 1 McAlary announced his intention to return to the Post only six months into his tenure at the Daily News, in violation of his contractual obligations. The court granted a temporary restraining order and preliminary injunction preventing McAlary from competing with the Daily News during the term of his contract because of the harm that the Daily News would suffer at the competitive loss of his unique services and talent. Specifically, the court found that his writing showed novelty of expression and was the product of the creative mind denoting uniqueness. Id. Kim, likewise, possesses such talent, and her design work is borne of her creative mind, and illustrates a novelty of expression that is recognized in the fashion industry. As another example, in Stiefel & Co. v. Blitz, No. 93 Civ. 6080 (PNL), 1993 WL 526386, *3 (S.D.N.Y. Dec. 14, 1993), the court granted injunctive relief to prevent a director of tabletop commercials from breaching his contract by providing directing services to a competitor of his former employer, based on the demonstration that the employee at issue s highly-prized artistic skills as a director make him unique. Like the director in the Stiefel case, Kim s talents are well-known in the industry and credit and sales follow the individual who is considered to be responsible for a collection s design, rather than only the label who presents the collection. Her design skills are unquestionably unique and special, particularly in the niche market in which both CH and ODLR compete. (Celio Aff. 9-10.) 1 For the convenience of the court, a copy of this decision is provided as Appendix A to this memorandum. #49018969_v4 5 9 of 17
C. THE HARM TO CH IF INJUNCTIVE RELIEF IS NOT GRANTED OUTWEIGHS THE HARM TO DEFENDANT IF IT IS GRANTED. The balance of equities clearly tips in CH s favor. The irreparable harm that it will suffer is far greater, and incalculable, than the harm the defendants may suffer from the imposition of a temporary restraining order or preliminary injunction. See McLaughlin, Piven, Vogel, Inc. v. W.J. Nolan & Co., Inc., 114 A.D.2d 165, 174, 495 N.Y.S.2d 146, 152 (2d Dep t 1986). If CH s request for injunctive relief is denied, Kim will be rewarded for breaching her enforceable restrictive covenant agreement. In addition, other CH employees will believe that their contractual promises to CH are unenforceable, and that it is acceptable conduct to violate their promises not to compete against CH. Moreover, ODLR and other competitors of CH will believe that it is acceptable to interfere with the contractual relationships between CH and its employees and will be encouraged to do so with impunity in direct violation of CH s noncompetition covenants. This is particularly unfair to CH because CH has been paying Kim at the rate of a $225,000 salary in exchange for her non-competition during that period. If Kim is permitted to design and promote ODLR s Fall 2017 collection, which will be shown in February, CH will have effectively underwritten the design of its chief competitor s work. The same is obviously true if Kim does any creative design work for ODLR in any of the areas where CH and ODLR are direct competitors, including bridal or evening wear. On the other hand, if the restrictive covenant is enforced, Defendant Kim will not suffer any result that was not originally contemplated when she signed the Agreement on January 29, 2016. She has been permitted to continue to work on her own brand, Monse, and, indeed, has been paid for the privilege of doing so, as illustrated in the discussion of her continued salary and benefits, supra. ODLR will simply have to wait until April to begin enjoying Kim s design #49018969_v4 6 10 of 17
services, which it was advised of in September, long before the Fall 2017 design began. Accordingly, the harm to CH if a temporary restraining order is not granted far outweighs the harm to Kim or ODLR if a temporary restraining order is granted. D. ODLR TORTIOUSLY INTERFERED WITH CH S AGREEMENT WITH KIM. CH should prevail on its claim of tortious interference with contractual relations because it has demonstrated: (1) the existence of a contract between plaintiff and a third party; (2) defendant s knowledge of the contract; (3) defendant s intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to plaintiff. Kronos, Inc. v. AVX Corp., 81 N.Y.2d 90, 94, 612 N.E.2d 289, 292 (1993). [W]here there is an existing, enforceable contract and a defendant s deliberate interference results in a breach of that contract, a plaintiff may recover damages for tortious interference with contractual relations even if the defendant was engaged in lawful behavior. NBT Bancorp Inc. v. Fleet/Norstar Fin. Group, Inc., 87 N.Y.2d 614, 621, 664 N.E.2d 492, 496 (1996). CH has demonstrated the existence of a valid contract with Kim. ODLR had knowledge of that contract, by, at the latest, September 23, 2016, when CH s counsel directly informed ODLR of Kim s contractual non-competition obligations. (Celio Aff. 18, Ex. J.) ODLR intentionally induced Kim to breach her agreement by hiring her to perform design services for its Fall 2017 collection, which will be shown in February 2017, among other responsibilities. E. CH SHOULD NOT BE REQUIRED TO POST A BOND. Consistent with settled case law, CH should not be required to give any security as a prerequisite to the issuance of a temporary restraining order. Section 6313 of the CPLR provides, in pertinent part, Prior to the granting of a temporary restraining order the court may, #49018969_v4 7 11 of 17
in its discretion, require the plaintiff to give an undertaking...." CPLR 6313(c) (emphasis added). Here, neither Kim nor ODLR will suffer harm in the absence of a bond. Accordingly, none should be required. CONCLUSION WHEREFORE, Plaintiff Carolina Herrera, Ltd. respectfully requests that this Court enter a temporary restraining order to enjoin Defendants' ucnlawful actions that are causing and will continue to cause CH irreparable harm. Dated: New York, New York December 20, 2016 Respectfully submitted, Katherine Healy Marques 31 West 52nd Street New York, New York 10019 Tel: (212) 513-3200 Fax: (212) 385-9010 fred. braid@hklaw.com katherine.marques@hklaw.com Attorneys for Plaintiff Carolina Herrera, Ltd. #49018969_v4 8 12 of 17
APPENDIX A 13 of 17
THE DAILY NEWS, L.P., V. MCALARY; Court Decisions; First Judicial Department; New York County; IA Part 49 New York Law Journal September 16, 1993 Thursday Copyright 1993 ALM Media Properties, LLC All Rights Reserved Further duplication without permission is prohibited Section: Pg. 23, (col. 3); Vol. 210 Length: 2525 words Byline: Justice Cahn Body Court Decisions First Judicial Department New York County IA Part 49 Motions under sequence numbers 001, 002 and 003 are consolidated for disposition. In motion sequence 001, plaintiff, Daily News, moves by Order To Show Cause (OSC) for a preliminary injunction, pursuant to CPLR 6301, enjoining defendant, Michael McAlary, (McAlary), from entering into any contract, agreement, understanding or arrangement for employment as a writer or editor with the New York Post or any other newspaper or magazine. On September 1, 1993, this court granted a temporary restraining order (TRO) enjoining defendant from such employment in the New York metropolitan area. In motion sequence 002, McAlary, moves by OSC, pursuant to CPLR 7503(a), to compel arbitration of this dispute, and to vacate the TRO. This court denied that branch of defendant's application to vacate the TRO, and set down for argument the remaining branch of the application. In motion sequence 003, plaintiff, by OSC, moves, pursuant to CPLR 6301 et seq., to enjoin defendant and anyone acting in combination or concert with him from working with any newspaper or magazine in the New York Metropolitan Area and from writing or publishing any article or column for any newspaper or magazine. On September 3, 1993, this court modified the prior TRO and enjoined defendant from writing or publishing any article or column for any newspaper or magazine in the New York metropolitan area. Approximately seven months ago, McAlary left the New York Post by which he had been employed as a columnist, in a highly publicized departure and entered into an employment agreement (Agreement) with the Daily News for a two-year term, commencing February 2, 1993 and ending on February 1, 1995 (Colasuonno Aff. 2, 3). The Agreement provides that plaintiff would employ defendant as an Associate Editor/Columnist at an annual salary of $275,000 for the first year and $300,000 for the second year (Colasuonno Aff. 3). In addition, defendant received a $50,000 signing bonus (Ibid.). On August 31, 1993, just six 14 of 17
Page 3 of 5 THE DAILY NEWS, L.P., V. MCALARY; Court Decisions; First Judicial Department; New York County; IA Part 49 months into his new employment contract with the plaintiff, McAlary informed the Daily News that he was leaving it with the intention of returning to the New York Post (Colasuonno Aff. 7). Less than a day later, McAlary's column, together with his picture, appeared on the front page of the New York Post (Colasuonno Aff. 7). For a preliminary injunction to be properly granted, the movant must demonstrate: (1) the likelihood of success on the merits, (2) irreparable injury in the absence of injunctive relief, and (3) a balance of the equities in its favor (Kindman & Co., P.C. v. Stollar, 151 AD2d 393, 395). Plaintiff's complaint sets forth a single cause of action against defendant. In the complaint, plaintiff alleges that defendant is violating paragraphs 3(b) and 7 of the Agreement. Paragraph 3(b) of the Agreement prohibits defendant from writing for any other newspaper or magazine in the United States and Canada without plaintiff's prior written permission (Colasuonno Aff. Ex. A). Paragraph 7 prohibits defendant, without plaintiff's prior written consent, from entering into any contract, agreement, understanding or arrangement for employment as a writer or editor with any other newspaper or magazine during the term of the Agreement (Colasuonno Aff. Ex. A). Plaintiff seeks preliminary and permanent injunctive relief enjoining defendant and anyone acting in concert with him from writing, working or publishing for any newspaper or magazine in the United states and Canada. Plaintiff has established, prima facie, the likelihood of success on the merits. Unquestionably, both paragraphs 3(b) and 7 prohibit defendant from either writing or working for any competing newspaper or magazine in the United States and Canada without the prior written approval from plaintiff. It is undisputed that plaintiff has not given defendant prior written approval to write or work for the New York Post or any other newspaper or magazine in the New York metropolitan area. Therefore, defendant's conduct evinces a breach of the terms set forth in paragraphs 3(b) and 7 of the Agreement. Defendant contends that plaintiff is not entitled to equitable relief because it comes to this court with unclean hands. Defendant points to plaintiff's conduct in the past seven months where it repeatedly induced contracted employees of the New York Post to leave their employer (McAlary Aff. 2, 3). Specifically, defendant refers to the lawsuit in which the New York Post sued plaintiff for tortious interference with contractual relations (Id. at 3; see, Goldman Aff. 3). Defendant graphically argues yesterday's thief wants to be seen as today's victim (McAlary Aff. 3). Because that unrelated case was settled before any tribunal had an opportunity to make findings of fact or conclusions of law, this court is reluctant to draw any conclusions from the allegations made in the prior dispute. McAlary also states that there is a great and glorious thievery in this business, and that the whole newspaper business is about stealing. We steal ideas. We steal sources. We steal advertisers. We steal talent (Ibid.). Somehow he appears to suggest that these allegations justify his decision to leave plaintiff's employ and resume working for the New York Post in total disregard of the existing Agreement. Whatever the course of conduct may be in the newspaper profession, and whether or not such activity is condoned by the profession, that does not mean that the activity has or should receive legal approval. What is clear is that defendant appears to be violating paragraphs 3(b) and 7 of the Agreement. The legal principle remains absolutely clear - contracts are made to be kept and not broken, and the parties who make them are in duty and in law bound to perform them (Shubert Theatrical Co. v. Rath, 271 Fed. 827, 838 [2d Cir]). An injunction may be warranted to prevent an employee who refuses to render services that are unique and extraordinary to an employer in violation of an existing contract from furnishing those services to another person for the duration of the contract (American Broadcasting Companies. Inc. v. Wolf, 52 NY2d 394, 402). Such a negative enforcement may be warranted, because the employee expressly agreed not to work elsewhere for the period of his contract (American Broadcasting Companies. Inc. v. Wolf, supra, at 402-403). The parties' Agreement appeared to be in full force and effect when defendant left plaintiff to return to the New York Post. The question then becomes whether McAlary's services are unique and extraordinary. Although McAlary acknowledges in paragraph 7 of the agreement that his services are unique, a court is not bound by that concession, and may make a finding to the contrary (67 NY Jur 2d, Injunctions, 77, at 469; Arias v. Solis, 754 F. Supp. 290, 294 [EDNY]). Lou Colasuonno, editor of The Daily News, states in his affidavit that defendant is one of the most prominent and widely-read columnists in the metropolitan area on par with other media stars. (Colasuonno Aff. 8). Defendant's compensation places him among the three or four highest paid columnists in the metropolitan area (Ibid.). The compensation package he received when he returned to the New York Post only furthers the claim that he is not an ordinary columnist, but a writer possessing unique attributes. Lou Colasuonno further states that McAlary's prominence and extraordinary popularity is evidenced by the highly visible placement he is given in the paper (Colasuonno Aff. 9). The affiant goes on to say that defendant's column always appears in the first eight pages of the newspaper and features his picture (Ibid.). Defendant's column was recently given top 15 of 17
Page 4 of 5 THE DAILY NEWS, L.P., V. MCALARY; Court Decisions; First Judicial Department; New York County; IA Part 49 billing as a result of his articles concerning Harvey Weinstein's kidnapping and the police scandal unfolding in the 73rd precinct (Colasuonno Aff. at n. 1). Colasuonno states that defendant's unique status is further evidenced by the fact that his departure from the New York Post to work for the Daily News was widely reported both in the local and national press (Colasuonno Aff. 10). Given the caliber of defendant's work and his extraordinary popularity and wide readership, Colasuonno states that defendant is irreplaceable (Id. at 11). Defendant counters by stating that he is not special (McAlary Aff. 8). He continues by saying that the Daily News has about ten columnists It's no big deal to put a columnist's picture on the front page (Id. at 9). This court has reviewed the affidavits submitted by the parties, and concludes that the assertions made in the affidavits submitted on plaintiff's behalf are not untruthful or unworthy of credence. It is true that the essence of art is expression of ideas in ways that are unique to the writer. It is this novelty of expression, this product of the creative mind, this embellishment of skeleton ideas that give rise to a writer's uniqueness. Defendant unquestionably possesses such ability, and his great ability has been so widely recognized as to give credence to the claim of uniqueness. Given the facts set forth in the moving papers, plaintiff has, prima facie, established that defendant is unique. Where the services are unique, the employer may well suffer irreparable harm if the employee is permitted to work for a competitor (American Broadcasting Companies, Inc. v. Wolf, supra, 52 NY2d at 403). The balance of the equities favors plaintiff because defendant has adequate contingencies that would mitigate any financial consequences stemming from an injunction. For example, even after the court enforce paragraphs 3(b) and 7 of the Agreement and preliminarily enjoins defendant from writing or working for the New York Post or any other newspaper or magazine in the metropolitan area, defendant has two options: (1) he can return to work for the Daily News (plaintiff's counsel represented to this court during oral argument that defendant would be welcomed back to the Daily News), or (2) work for the New York Post's parent company, News America Publishing, Inc., at the compensation levels set forth in his employment contract with the New York Post (Plaintiff's Reply Aff. Ex. B). Accordingly, based on the foregoing, plaintiff has established, prima facie, its entitlement to injunctive relief. The court declines, however, to extend injunctive relief to encompass any person acting in combination or concert with defendant's violation of paragraphs 3(b) and 7 of the Agreement. A court will only enjoin parties to an action and will not enjoin the whole world (Austrian Lance & Stewart, P.C. v. Rockefeller Center, Inc., 163 AD2d 125, 127). But, no person with knowledge of an injunction even if not a party can aid or cooperate with a party in doing the prohibited act without incurring judicial sanctions (People v. Magee, 102 Misc. 2d 345, 348, quoting People ex rel. Stearns v. Marr, 181 NY 463, 468; Austrian Lance & Stewart, P.C. v. Rockefeller Center, Inc., supra, 163 AD2d at 127). Defendant asserts that this action must be stayed pending arbitration of the within dispute because the Agreement provides that all disputes are subject to arbitration. Further, defendant asserts that the parties pursuant to the Agreement waived any right to seek judicial relief. Paragraph 13(g) of the Agreement contains a broad, mandatory arbitration provision. It provides that:?? disputes between the parties?? any alleged breach or interpretation of this contract shall be submitted to binding arbitration. At oral argument, plaintiff's counsel represented to the court that plaintiff consented to having the within controversy submitted to arbitration. Thus, it appears that the parties are in agreement that this dispute is arbitrable. Defendant contends that pursuant to paragraph 13(g) of the agreement, the court lacks jurisdiction to provide injunctive relief. Paragraph 13(g) provides in relevant part: The parties hereby waive any and all right to proceed in any court; however, should any dispute hereunder be adjudicated by a court, the parties hereto waive any right each may have to a jury trial. Paragraph 7 of the Agreement contemplates that in view of the unique nature of defendant's column and that monetary damages may be inadequate to compensate plaintiff in the event of a breach Defendant agrees to the entry of an order for injunctive relief to enforce [paragraph 7] in addition to any other remedies at law or in equity. Defendant's argument is that the parties agreed that paragraphs 7 and 13(g) read together contemplate that injunctive relief can only be provided by an arbitrator. Contrary to defendant's argument, paragraph 13(g) does not totally preclude the parties from seeking judicial intervention. Although it would appear that the parties waived their rights to proceed in a judicial forum, the parties did anticipate that resort to court proceedings might become necessary in some instances which is why paragraph 13(g) provides that the parties waive 16 of 17
Page 5 of 5 THE DAILY NEWS, L.P., V. MCALARY; Court Decisions; First Judicial Department; New York County; IA Part 49 their rights to a jury trial. Further, the language in paragraph 7 does not preclude the parties from seeking injunctive relief from a court. It simply states that injunctive relief may be warranted if defendant breaches the provisions of paragraph 7. CPLR 7502(c) provides that preliminary injunctive relief may be awarded if an applicant can show that an award he would be entitled in an arbitration proceeding may otherwise be rendered ineffectual unless interim relief is granted (Matter of Denihan [Denihan], 119 AD2d 144, 149, affd 69 NY2d 725; 8 Weinstein-Korn-Miller, NY Civ Prac 7502.20). During oral argument, defendant's counsel advised the court that a demand for arbitration had been served on plaintiff. Counsel for the parties, however, advised the court that they were unsure as to when this controversy could be heard by an arbitrator. It is clear that in the interim without preliminary relief plaintiff will be caused to suffer defendant's continued violation of the Agreement by writing and working for the New York Post. Therefore, under these circumstances, an injunction in aid of the arbitration process is warranted. To recapitulate, plaintiff's motion (sequence 001) for a preliminary injunction is granted. The injunction will remain in effect pending disposition of the within dispute by an arbitrator. The TRO is continued pending settlement and signing of a long form order. Plaintiff is directed to post the requisite mandatory undertaking (Drexel Burnham v. Ruebsamen, 139 AD2d 323, 327-328, lv denied 73 NY2d 703; CPLR 7502(c)). The amount of the undertaking will be set on the order to be entered herein. Defendant's motion (sequence 002) to compel arbitration is granted, and plaintiff's action herein is stayed (CPLR 7503(a)). The parties are directed to proceed expeditiously to arbitration. Plaintiff's motion (sequence 003) is granted to the extent that defendant is enjoined from working, writing or publishing for any newspaper or magazine in the New York metropolitan area. Settle order with the recommendation for a suitable undertaking. Load-Date: August 3, 2011 End of Document 17 of 17