In Invidia v. DiFonzo, 30 Mass. L.Rptr 390 (2012), a hair salon sued a former stylist for breaching a non-compete and non-solicitation clause in her employment agreement. The Court examined whether the new employer’s posting a job change on defendant’s Facebook page and “friending” former clients was improper solicitation.
The employment contract contained a non-compete spanning two years and 10 miles and a two-year non-solicitation clause. After she resigned, the defendant went to work for a competing salon less than two miles away. Her new employer then posted an announcement on its Facebook page, promoting defendant’s new affiliation with the competing salon.
The plaintiff saw the Facebook activity and sued. The Court denied the request for injunctive relief because plaintiff failed to show a likelihood of success on the merits or irreparable harm.
Rules/Reasoning:
A preliminary injunction plaintiff must show (1) likelihood of success on the merits; (2) irreparable harm if the injunction is denied; and (3) the risk of irreparable harm to the movant outweighs similar risk of harm to the opposing party. *2.
Massachusetts courts scrutinize non-competition agreements because they often result from unequal bargaining power. A covenant not to compete is enforceable only if it’s necessary to protect a legitimate business interest, is reasonably limited in time and space, and supported by the public interest. *4.
The Non-Compete Provision
The salon plaintiff failed to show that it was likely to succeed on the merits on the noncompete because it was questionable whether a two-year/10-mile restriction was necessary to protect plaintiff’s interest and because plaintiff failed to show that its “legitimate business interest” – the goodwill which plaintiff claimed it lost – belonged entirely to plaintiff. *5.
The Court noted that in the hairdressing business, goodwill often belongs to the individual stylist rather than the salon. That is, customers likely patronize a salon for a specific hairdresser; not because they like the salon itself.
The Court also found the plaintiff failed to show irreparable harm, since plaintiff could clearly quantify its damages. The Court pointed out that plaintiff offered evidence of the number of clients that it lost since defendant left (90) and the average dollar amount spent ($87.16) by each lost client. This militated against a finding of irreparable harm. *5.
The Non-Solicitation Clause
Turning to the non-solicitation clause, the Court found that the Facebook announcement of defendant’s affiliation with the new salon (by that salon) did not equate to active solicitation.*5.
Nor did the defendant’s sending friend requests to eight clients of plaintiff amount to a breach of the non-solicitation provision.
The employer did however have some circumstantial evidence in support of its solicitation argument. It offered documents at the injunction hearing that demonstrated that some 90 salon clients had cancelled (without rescheduling) appointments in the two-plus months since defendant’s departure. *6. Yet the Court wasn’t prepared to find this a breach of the anti-solicitation provision. The Court stressed that no current or former clients testified that defendant contacted them and solicited their business.
Take-aways: A third party’s passive Facebook posting and direct Facebook friends requests are not enough to establish solicitation for preliminary injunction purposes. Instead, there must be direct evidence of active solicitation to merit injunctive relief.
