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  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
  • MADELINE JOHNSTON vs CORTELLO SALON INC.Other Circuit Civil - Other Division: CV-C document preview
						
                                

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Filing # 164025675 E-Filed 01/04/2023 08:54:24 AM IN THE CIRCUIT COURT, FOURTH JUDICIAL CIRCUIT, IN AND FOR DUVAL COUNTY, FLORIDA CASE NO.: 2022-CA-6522 DIVISION: CV-C MADELINE JOHNSTON, Plaintiff/Counter-Defendant, Vv. CORTELLO SALON, INC., Defendant/Counter-Plaintiff. / COUNTER-PLAINTIFF’S MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR PRELIMINARY INJUNCTION Counter-Plaintiff, Cortello Salon, Inc., files this memorandum of law in support of its Motion for Preliminary Injunction, filed November 29, 2022, and states: I INTRODUCTION Counter-Defendant Madeline Johnston was an employee of Cortello, a high-end hair salon in Jacksonville Beach, for more than four years. She came to Cortello with no clients and no experience in the salon industry. During her employment with Cortello, Ms. Johnston received approximately 230 hours of training and education in Cortello’s training academy, during which time and after, she obtained Cortello’s confidential and proprietary trade secret information and provided hair styling services to Cortello’s clients. In September 2018, Ms. Johnston executed her Employee Agreement with Cortello, which contains non-compete and non-solicitation provisions.! On October 24, 2022, Ms. Johnston quit her employment with Cortello to begin working in competition with Cortello a mere three miles 1 A copy of the Employee Agreement is attached to Cortello’s Verified Counterclaim as Exhibit A. ACCEPTED: DUVAL COUNTY, JODY PHILLIPS, CLERK, 01/04/2023 12:30:56 PM down the road. Ms. Johnston operates under the name of a company called “With Love, Mads, LLC,” which she formed two weeks prior to quitting Cortello. Cortello is entitled to a preliminary injunction to enjoin Ms. Johnston from any further breaches of the Employee Agreement based on the Verified Counterclaim and additional evidence Cortello will present at the hearing set for January 18, 2023. Cortello has a substantial likelihood of prevailing on its breach of contract claim—Ms. Johnston entered into a valid agreement with restrictive covenants, and her breaches threaten Cortello’s specialized training, its relationship with clients, its goodwill, and its confidential and proprietary information. Cortello is likely to suffer irreparable harm, as loss of clients, damage to its goodwill, and disclosure or use of Cortello’s confidential information, cannot be undone. There is no adequate remedy at law, as money damages will not compensate Cortello for the harm caused by Ms. Johnston’s continued or threatened violations of the restrictive covenants, which can only be prevented by restrictive covenants such as those in Ms. Johnston’s Employee Agreement. Accordingly, this Court should grant Cortello’s motion for preliminary injunction against Ms. Johnston. Il. DISCUSSION Under Florida law, temporary injunctive relief is available to a party who proves (1) “a substantial likelihood of success on the merits;” (2) “the likelihood of irreparable harm;” (3) “the unavailability of an adequate remedy at law;” and (4) “that a temporary injunction will serve the public interest.” Envtl. Servs., Inc. v. Carter, 9 So. 3d 1258, 1264 (Fla. 5th DCA 2009). “The usual remedy in cases involving a valid covenant not to compete is injunctive relief... .” Id. a. Cortello has a substantial likelihood of success on the merits. Cortello’s Verified Counterclaim demonstrates that Cortello has a substantial likelihood of success on its claim against Ms. Johnston for her breach of her Employee Agreement with Cortello. 1. Ms. Johnston breached her agreement with Cortello. “[E]vidence that an enforceable covenant not to compete was breached will support a trial court’s finding of the likelihood of success on the merits.” Office Depot, Inc. v. Babb, Case No. 20-cv-80407, 2020 U.S. Dist. LEXIS 48012, at *8 (S.D. Fla. Mar. 19, 2020) (quoting Atomic Tattoos, LLC y. Morgan, 45 So. 3d 63, 66 (Fla. 2d DCA 2010)). It is beyond dispute that Ms. Johnston breached her Employee Agreement with Cortello. In the Employee Agreement, Ms. Johnston agreed that, during her employment with Cortello and for one year following the last day of her employment with Cortello, she would not engage in competition with Cortello within a twelve-mile radius of Cortello’s location by contributing her “knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, consultant, or intern to an entity engaged in the same business as the Employer” or by engaging in any “activity that may require disclosure of proprietary or Confidential Information.” See Employee Agmt., §(e). She also agreed that, for one year following the last day of her employment with Cortello, she would not “directly or indirectly solicit (including but not limited to, contact with existing or former customers/clients whether initiated by the Employee or customer/client), contact (including but not limited to e-mail, regular mail, express mail, telephone, SMS, fax, social media channels and instant message), attempt to contact or meet with the Employer’s customers/clients for purposes of offering or accepting goods or services similar to or competitive with those offered by the Employer.” /d. at §(g)(i). As outlined in the Verified Counterclaim, Ms. Johnston’s last day employed by Cortello was October 24, 2022. On November 21, 2022, Cortello learned that Ms. Johnston has been operating a business that competes with Cortello called “With Love, Mads, LLC” out of Total Salon Studios located at 1559 Atlantic Blvd., Neptune Beach, Florida. Total Salon Studios is located only three miles away from Cortello’s location at 1086 3rd Street North, Jacksonville Beach, Florida. Additional evidence to be presented at the evidentiary hearing will show that Ms. Johnston has also contacted Cortello clients to offer her competing services. Accordingly, Ms. Johnston is clearly and unquestionably in breach of the Employee Agreement. 2. The restrictive covenants are valid and enforceable. To enforce a restrictive covenant, an employer must prove: “(1) the existence of one or more legitimate business interests justifying the restrictive covenant and (2) the contractually specified restraint is reasonably necessary to protect the legitimate business interest(s).” Ansaarie y. First Coast Cardiovascular Inst., P.A., 252 So. 3d 287, 290 (Fla. Ist DCA 2018); Autonation, Inc. v. O’Brien, 347 F. Supp. 2d 1299 (S.D. Fla. 2004); § 542.335, Florida Statutes. If the employer establishes the existence of a legitimate business interest(s), then irreparable injury is presumed, and the burden shifts to the employee to prove the absence of such injury. See Ansaarie, 252 So. 3d at 292. The restrictive covenants in Ms. Johnson’s agreements are justified by no less than three legitimate business interests. First, Cortello has a legitimate business interest in the specialized training it provided to Ms. Johnston. See Fla. Stat. § 542.335(b)(5). Ms. Johnston did not come to Cortello as an experienced hair stylist or with her own book of business; she received over 230 hours of training and education sessions through Cortello’s training academy that allowed her to provide services to Cortello’s clients at Cortello’s high standards and based on Cortello’s techniques. See Employee Training Reimbursement Agreement attached hereto as Exhibit 1. As such, Cortello has a protectable interest in Ms. Johnston’s training. See Pirtek USA, LLC v. Layer, Case No. 6:05-cv- 793-Orl-28KRS, 2005 U.S. Dist. LEXIS 57523, *15 (M.D. Fla. Sept. 23, 2005) (franchisor had a legitimate business interest in protecting investment in training of franchisee who “had no prior experience in, or knowledge of” franchisor’s business before training) (collecting cases); Balasco v. Gulf Auto Holding, Inc., 707 So. 2d 858, 860 (Fla. 2d DCA 1998) (employer had legitimate business interest in “specialized training” where the employer “hire[d] personnel with little or no sales experience and invested considerable money and time to teach them the [employer’s] way of selling cars”). Here, Cortello trained Ms. Johnston in the Cortello hair styling business, teaching her everything she knows about it. The law recognizes this training as a protectable interest. Second, Cortello possesses a legitimate business interest in its relationships with its clients. See Fla. Stat. § 542.335(b)(3) (“legitimate business interest” includes “[s]ubstantial relationships with specific prospective or existing customers, patients, or clients”). Cortello states in the Verified Complaint that Ms. Johnston has contacted Cortello clients since her termination to offer her competing services ({ 20). Additional evidence regarding these communications will be provided at the evidentiary hearing. Third and finally, Cortello possesses a protectible interest in the client goodwill associated with the Jacksonville Beach area. See Fla. Stat. § 542.335(b)(4)(a) (“legitimate business interest” includes “client goodwill associated with . . . [a specific geographic location”). The evidence will show that Cortello has substantially invested in developing its existing client base as well as client goodwill in the eastern Duval County region, including Jacksonville Beach. By working within the twelve-mile geographic restriction provided for by the Employee Agreement, Ms. Johnston has violated such agreement and threatens Cortello’s business interest. b. Cortello is likely to suffer irreparable harm without entry of an injunction and has no adequate remedy at law. In cases involving the violation of a restrictive covenant, “the normal remedy is to grant an injunction . . . because of the inherently difficult, although not impossible, task of determining just what damage actually is caused by the employee’s breach of the agreement.” Miller Mechanical, Inc. v. Ruth, 300 So. 2d 11, 12 (Fla. 1974) (reversing trial court’s award of nominal damages and instructing court to enter an injunction). With respect to irreparable harm, Section 542.335 provides that “[t]he violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of the restrictive covenant.” § 542.335(D(), Fla. Stat.; see also Veterinary Orthopedic Implants, Inc. v. Haas, Case No. 3:20-cv-868-J-34MCR, 2020 U.S. Dist. LEXIS 163271, at *48 (M.D. Fla. Sept. 8, 2020) (“The purpose of Florida’s rebuttable presumption of irreparable harm is to ensure that an employer . . . does not have to wait until it has been harmed by the loss of a specific customer in order to obtain an injunction.”). As Ms. Johnston has clearly breached her Employee Agreement, irreparable harm is presumed. Likewise, Cortello does not have an adequate remedy at law for the irreparable injury caused by Ms. Johnston’s violative conduct because “monetary damages are difficult to prove with any certainty and .. . even if provable, would not adequately compensate for all aspects of the violation of a covenant not to compete.” Smart Pharm., Inc. v. Viccari, 213 So. 3d 986, 990 (Fla. ist DCA 2016). In fact, Ms. Johnston agreed in the Employee Agreement that, in the event of a breach of the restrictive covenants in the Employee Agreement, Cortello “shall be entitled to seek . . a temporary or permanent injunction or other equitable relief against such breach or threatened breach... , without the necessity of showing any actual damages or that money damages would not afford an adequate remedy ... .” See Employee Agmt. p. 5 (emphasis added). As Ms. Johnston would continue to breach the restrictive covenants and threaten Cortello’s goodwill, relationships with its clients, and place its confidential and proprietary information in jeopardy, only an injunction would prevent this damage. See, e.g., Quirch Foods LLC v. Broce, 314 So. 3d 327, 342- 43 (Fla. 3d DCA 2020). ¢ Entry of an injunction against Ms. Johnston will serve the public interest. “Public policy in Florida favors enforcement of reasonable covenants not to compete.” Quirch Foods LLC, 314 So. 3d at 343. When restrictive covenants protect legitimate business interests, the public interest is implicated and favors the entry of an injunction. See Atomic Tattoos, LLC y. Morgan, 45 So. 3d at 66 (“A finding that a covenant ‘protects a legitimate business interest is also important to public interest considerations.”). In this case, enforcement of the restrictive covenant against Ms. Johnston will ensure employers they can rely on non-compete agreements to protect their legitimate business interests and deter employees from breaching such agreements. Public policy decidedly favors entry of an injunction in this situation where Ms. Johnston voluntarily resigned from Cortello after forming a company to compete against Cortello a few miles down the road. il. CONCLUSION For the reasons set forth herein and in its Verified Counterclaim and Motion for Preliminary Injunction, Cortello is entitled to entry of a preliminary injunction. Accordingly, Cortello respectfully requests that this Court grant its Motion for Preliminary Injunction and such additional relief as this Court deems just and proper. MURPHY & ANDERSON, P.A. /s/ Geddes D. Anderson, Jr. GEDDES D. ANDERSON, JR. Florida Bar No. 0138894 ganderson@murphyandersonlaw.com pmarchman@murphyandersonlaw.com SARAH JECK HULSBERG Florida Bar No. 0106027 shulsberg@murphyandersonlaw.com 1501 San Marco Blvd. Jacksonville, FL 32207 904-598-9282 (phone) Attorneys for Cortello Salon, Inc. CERTIFICATE OF SERVICE THEREBY CERTIFY that on January 4, 2023 a copy of the foregoing was served via the Florida Courts E-filing Portal to all counsel of record. /s/ Geddes D. Anderson, Jr. ATTORNEY EXHIBIT 1 cortellosalon pk TAL DOCUMENT ae Employee Training Reimbursement Agreemen t my WO hint I, JORNS TONnm , understand that Cortello Salon will be providing training and education to me through my enrollment in the Cortel lo Academy in order to enhance my professional skills, knowledge, and attitude. Cortello Salon has engaged the services of Education Directors and other professionals in order to conduct training and education sessions through the Academy. | acknowledge that this training provided to me entails a cost to Cortello Salon, which is valued at approximately $ 15.00 per hour. | acknowledge that Cortello Salon antici pates approximately 230 hours of training will be provided to me during my enrollment in the Corte llo Academy. If my employment with Cortello Salon terminates for any reason within two years from the start of the program (or the signing of this agreement, whichever comes first), | agree to reimburse a Portion of the Academy costs incurred and paid for by Cortello Salon. Accordingly, | agree to teimburse Cortello Salon for 80% of my training costs incurred to date if my employment terminates during my first year of the training progr am or 50% of my training costs if my employment terminates during my second year of the training program. ! authorize Cortello Salon to deduct these trainin g costs from my last paycheck. If my last Paycheck does not cover all of the training costs that are owed to Cortello Salon, | ag ree to pay Cortello Salon the balance within 90 days after my employment is terminated. | acknowledge that | have carefully read this Employee Training Reimbursement Agreement and have had the Opportunity to ask questions of Cortello Salon. | certify that | understand and voluntarilyagree to each provision of this Agreement. EMPLOYEE (V\ AX bone Print Name. JO IAS ton Date: Ow’ p. Il, 2018 sqnaure 1 olen, Joh AVY CORTELLO ALON apl\etaluL Lint Natalie McHenry | Director Coretta Salon tne 2 | Teaming Reimburs ement Agreement