Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 1 of 17
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DAlE Fr~: ~-4 -13:
13 Civ. 3060
DEWITT STERN GROUP,
A P PEA RAN C E S:
Attorney for Plaintiff DeWitt
GOLDBERG SEGALLA LLP
780 Third Avenue, Suite 3100
New York, NY
By: Peter J. Biging, Esq.
OGLETREE, DEAKINS, NASH, SMOAK
1745 Broadway, 22nd Floor
New York, NY
& STEWART, P.C.
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 2 of 17
Plaintiff DeWitt Stern Group Inc. ("DeWitt" or "Plaintiff")
has moved by order to show cause for a preliminary injunction to
prohibit its former employee, Richard Eisenberg ("Mr. Eisenberg"
or "Defendant"), from violating Defendant's Employment
Agreement, in particular with respect to the confidentiality and
non-solicitation provisions. For the reasons set forth below,
Plaintiff's motion for a preliminary injunction is granted to
the extent it prohibits Defendant from future violations of the
DeWitt is a privately held insurance brokerage and risk
management firm, specializing (in part) in insurance for the
entertainment industry, with its primary place of business
operations and senior management located in New York.
opp. at 4.)
Mr. Eisenberg is an established insurance broker.
(Affidavit of Richard Eisenberg ("Eisenberg Aff."); ~ 2-8.)
From 2007 until May 6, 2013, Mr. Eisenberg was employed by
DeWitt as a Senior Vice President and producer, with his primary
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 3 of 17
1 Y to sell film insurance products and oversee
(Memo. at 5.) Mr.
oyed by Arthur J. Gallagher & Co. ("Gallagher") .
Prior to Mr.
rg's employment at DeWitt, he worked at
2001 until 2007.
(Eisenberg Aff. ~~ 3, 10.) When
Mr. Eisenberg j
S, he was compensated for the sale
of his bus
accounts and goodwill in the amount of
(Declaration of Charles Johnson,
("Johnson Decl."); <j[
5.) His employment with Aon/AGRIS therefore contained
ing him from soliciting these
clients for another firm, or
with them if he were to
terminate his agreement.
In 2007, Mr. Eisenberg
S and joined DeWitt,
and shortly thereafter Aon
a Cross-Compl nt against
DeWitt and Mr. Eisenberg alleging,
ngs, that Mr.
Eisenberg had breached the restrict
covenant provisions in
his agreement, and that DeWitt had
interfered with its business by convincing customers to abandon
their relationships with Aon/AGRIS and move inste
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 4 of 17
(Biging Decl. ~~ 14, 18.) DeWitt alleges that in order to free
Mr. Eisenberg from the restraints imposed by his contract with
Aon/AGRIS, and to permit Mr. Eisenberg to lawfully solicit his
former clients for DeWitt, DeWitt entered into a settlement with
Aon/AGRIS in which DeWitt paid Aon/AGRIS $425,000.
Decl. ~ 6.) According to DeWitt, as a result of this
settlement, which Mr. Eisenberg signed, Mr. Eisenberg was
permitted to solicit the business he had sold to Aon/AGRIS for
DeWitt and continue cultivating these relationships on behalf of
DeWit t .
( I d . a t ~ ~ 7 - 8 . )
After Mr. Eisenberg joined DeWitt, Plaintiff alleges that
Mr. Eisenberg, in his capacity as Senior Vice President and
producer, had access to DeWitt's confidential information and
trade secrets, including names and lists of accounts and
clients, names of key account contacts, account characteristics,
pricing information, and application information. Further,
DeWitt asserts that in the course of his work for DeWitt, Mr.
Eisenberg was provided substantial support in his efforts to
make former Aon/AGRIS clients DeWitt clients, thereby building
his book of business, including:
(1) substantial compensation on
commissions earned on the business;
two full-time employees
to assist him in servicing any business he could bring in;
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 5 of 17
offices he could work out of on both coasts; and (4)an apartment
in California, half of which was paid for by DeWitt so he could
develop clients on the west coast.
(Id. at err 8.)
Mr. Eisenberg also signed a series of employment agreements
with DeWitt, including his final agreement executed on or about
October 9, 2012 (the "Employment Agreement") .
Peter S. Biging, ("Biging Decl.").) The Employment Agreement in
Paragraph 5(a) states that "by signing this Agreement, Employee
acknowledges and agrees that the restrictive covenants contained
in this Agreement are reasonably necessary to protect Company's
business interests and that during and after the term of this
Agreement Employee will not use or disclose, directly or
indirectly, and will keep strictly secret and confidential all
Confidential Information and Trade Secrets except as required in
the course of Employee's employment by Company." (Id.) Further,
Paragraph 5(c) of the Employee Agreement states that,
In consideration of Employee's continued employment with
the company, Employee agrees that during the term of
employment, and for the two (2) year period immediately
following termination of employment for any reason,
Employee will not use Company's Confidential Information or
Trade Secrets to solicit, accept, divert, or take away, in
whole or in part, directly or indirectly, any clients or
"Prospect" (as hereinafter defined) of Company who were
solicited or serviced by Employee or by anyone directly or
indirectly under Employee's supervision, or with whom
Employee had any business relationship, within the two (2)
year period immediately prior to Employee's termination of
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 6 of 17
employment. For purposes of this Agreement, "Prospect"
shall be defined as a potential customer known and
contacted by Employee or Company prior to the date of
termination of employment.
Mr. Eisenberg voluntarily agreed to these provisions, which
included an acknowledgement in Paragraph 6 of the Employment
Agreement that, "[iJn the event Employee breaches any of its
obligations under Paragraph 5 above the Company will suffer
irreparable injury, not readily susceptible of valuation in
monetary damages." (Id.) Accordingly, Mr. Eisenberg agreed that
DeWitt would be "entitled to injunctive relief against any
breach or prospective breach" by him of the "obligations under
Paragraph 5 above." (Id.)
The Employment Agreement defines confidential information in paragraph 5(a)
All information (whether or not specifically labeled or identified as
confidential, and whether oral, written, or in any electronic medium)
relating to Company's trade secrets, knowledge, data, financial
information, business methods and techniques, technology, processes,
innovations, concepts, names and lists of accounts, employees,
customers, clients, vendors, expiration information, name of key
account contacts, account characteristics, application information, and
all other information relating to Company that is unique, proprietary,
or not in the public domain.
(Employment Agreement §5(a).) Trade Secret, also in Paragraph 5(a), is
defined as "all information that Company reasonably informs Employee (whether
orally or in writing) from time to time is a trade secret, as well as any
other Confidential Information reasonably the subject of trade secret
protection. Such information is considered secret and is disclosed to
Employee in confidence."
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 7 of 17
On April 30, 2013, Mr. Eisenberg
requested a meeting on May 1, 2013 at
(Memo. at 10.) Mr. Eisenberg
canceled the meeting on May 1, and instead met with the
and Chief Operating Officer (Charles
Johnson) on May 6, 2013, where he announced his resignation.
(Id. ) During this meeting, Mr. Eisenberg
s acknowledged that
he told DeWitt's President Charles Johnson that
abide by the Employment Agreement's non-soli
because he did not
any non-compete was en
f. ~ 27.) Mr. Eisenberg
stated that he Ie DeWitt because he felt undercompensated due
to deductions reducing his income.
(Eisenberg Aff. ~~ 25-26.)
Within a day of t
announcement of Mr. Eisenberg's
departure, DeWitt received a Broker of Record ("BORll) Letter
from one of the clients Mr.
senberg serviced at DeWitt
notifying DeWitt of its move to Gallagher.
12.) DeWitt has since rece
more such BOR letters,
uding one from a client who had only come to DeWitt in March
(See Declaration of John Hamby,
("Hamby Declo ll) i
~ 3.) The record also shows that Mr. Eisenberg, beginning no
later than March 18, 2013, began
ating his Employment
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 8 of 17
Agreement by sending confidential information from his Company
e-mail to his personal e-mail and to Brian Kingman, Managing
Director at Gallagher, a direct competitor of DeWitt.
10.) More specifically, Mr. Eisenberg, beginning on April 30,
2013 through May 4, 2013, forwarded e-mails containing
confidential information and/or trade secrets to his personal e-
mail account, including:
(1) an e-mail describing coverage
issues for a current DeWitt client; (2) interactive policy
renewal applications for a different current DeWitt client; (3)
a current DeWitt client's movie script, budget, and other
confidential information necessary to solicit preliminary
insurance quotes and (4) a current movie client's cast log and
medical forms containing confidential coverage and other
information. (See Biging Decl.; Exhibit B.)2 Additionally,
DeWitt establishes that Mr. Eisenberg on April 17, 2013 in his
2 The Employment Agreement in Paragraph 5(b) states that,
Employee shall not retain copies, in any format, of Company Property.
Employee agrees and understand that Company property shall not, at any
time, be copied or transferred to any memory storage device, online
account or person email address that is maintained by or for Employee.
Such copying or transferring includes, for example, forwarding emails
or an attachment to a personal email account, and exceeds the scope of
Employee's authority relating to the use of Company's computer network
and electronic communications.
(Employment Agreement at § 5(b).) Company Property is defined as including,
but not being limited to, "all files, papers, memoranda, letters, emails and
attachments, instant messages, handbooks and manuals, facsimile or other
communications that were written, authorized, signed, received or transmitted
during Employee's employment." (Id.)
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 9 of 17
e-mail correspondence with Brian Kingman shared confidential
information and/or trade secrets pertaining to a business
opportunity to place insurance on behalf of a client with
respect to a forthcoming film.
(Plaintiff's Order to Show
Cause, Exh. C.)
Immediately upon resigning, Mr. Eisenberg joined Gallagher
on May 6, 2013 as Area Executive Vice President, where he is
responsible for producing business from his clients and
servicing that business. (Eisenberg Aff. ~ 26.) Mr. Eisenberg's
Employment Agreement does not prohibit him from competing with
DeWitt in this new role so long as he is not using confidential
information obtained during his employment at DeWitt, or
attempting to divert clients he serviced while at DeWitt.
I. Preliminary Injunction
In order to obtain a preliminary injunction,
a party must demonstrate (1) that he or she will suffer
irreparable harm absent injunctive relief, and (2) either
(a) that he or she is likely to succeed on the merits, or
(b) that there are sufficiently serious questions going to
the merits to make them a fair ground for litigation, and
that the balance of hardships tips decidedly in favor of
the moving party.
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 10 of 17
Moore v. Consolo Edison Co. of N.Y., Inc., 409 F.3d 506, 510 (2d
r.2005) (internal quotation marks and citation omitt
Pursuant to Fed. R. Civ. P. 52(a), in granting or re
liminary injunction, the court shall set
findings of fact and conclusions of law" whi
grounds of its action. The Second Ci
s stated that
"[t]hese findings are not conclusive, and may
altered after a
trial on the merits." Visual Sciences, Inc. V. Integrated
Communications Inc., 660 F.2d 56, 58
ing Hamilton Watch Co.
v. Benrus Watch Co., 206 F.2d 738, 740 (2d Cir.1953).
I. Plaintiff Has Demonstrated Irreparable Harm
Irreparable injury exists where a monetary award does not
provide adequate compensation.
See Jackson Dairy, Inc. v. H.P.
Hood & Sons, Inc., 596 F.2d 70, 72 (2d
harm to an employer res
s through both the loss of client
relationships and customer goodwill from a breach of a non
compete clause, and where "an employee has misappropriated trade
secrets or confident 1 customer information, including pricing
methods, customer lists and customer preferences."
Controls, Inc. v. A.P.T.
tical Sys., 323 F. Supp. 2d 525,
532-33 (S.D.N.Y. 2004); see also Ticor Title Ins. Co. v. Cohen,
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 11 of 17
173 F.3d 63, 69 (2d Cir. 1999) (recognizing that" would be
difficult to calculate monetary damages that would
successfully redress the loss of a relationship with a client
that would produce an
erminate amount of bus
ss in years
to come. U
) . For
stance, in Arthur J. Gallagher Servo Co. v.
Egan, 2013 U.S. App. LEXIS 5875 (11th Cir. Fla. March. 25,
2013), the court found
"the factors of irreparable harm and
balance of harms weighed in
of issuing a preliminary
if Defendant] continued to solicit his
former clients, the companies stood to lose accounts in which
they had invested significant resources, revenues from t
renewal of those accounts, and goodwill cultivat with those
. at *11. The court therefore determined that
"the loss of longstanding clients and goodwill [was] an
irreparable injury." Here, DeWitt
already received notice
of three clients, previously under Mr.
senberg at DeWitt, that
(See Johnson Decl. ~~ 10 11.)
Additionally, Mr. Eisenbe
has sent confidential Company
property, as defined in the
oyment Agreement, from his
DeWitt e-mail address both to a Gallagher employee and his
sonal e-mail account. Mr. Eisenbe
does not deny that these
clients have moved to Gall
or not that he has sent such e-
mails from his work address. Given the potential future
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 12 of 17
s and confidential information, DeWitt has shown that they
r irreparable harm if the Employment Agreement is not
II. Plaintiff Has Demonstrated a Likelihood of Success on the
The likelihood of success on the merits is
, the Employment Agreement at issue is
respect to both the non-compete and confident
rst, a covenant not to compete will be
extent that it is reasonable in time and area, necessary to
protect an employer's legitimate interests, not harmful to the
general public and not unreasonably burdensome to the employee."
BDO Seidman v. Hirshberg, 93 N.Y.2d 382, 289 (N.Y. 1999). "New
York courts addressing
month restrictions on
solicitation of former clients
fond them to be reasonable." USI Ins. Servs. LLC v. Miner, 801
F. Supp. 2d 175, 188 (S.D.N.Y. 2011). Such agreements are not
found overbroad even if
Y "would prohibit [the employee] from
accepting business from
ients who voluntarily and
without any soli
e to continue to do business with
[the employee]. fI Id.
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 13 of 17
Here, the Employment Agreement narrowly tailors the two
r non-compete provision to
t Mr. Eisenberg only from
"using the Company's Confident
1 Information and/or Trade
. to solicit, accept, divert, or take away, in whole
part, directly or indirectly,N any clients or prospect of
DeWitt "who were solicit
ced by Employee or by anyone
directly or indirectly under [Mr. Eisenberg's] supervision, or
with whom Employee had any business relationship.N (See Biging
Decl.) This does not
Mr. Eisenberg from soli
clients retained through
existingN relationships or through
his "own independent efforts, unassisted by the firm.N
Barbagallo v. Marcum LLP, -- F. Supp. 2d --, 2013 WL 132711, at
*18 (E.D.N.Y. Jan. 10, 2013).
Second, New York courts have expressly recogniz
secrets and other conf
1 information of the nature DeWitt
specified in the Employment Agreement.
See~ e.g., John Hancock
Mut. Life Ins. Co. v. Austin, 916 F. Supp. 158, 165 (N.D.N.Y.
"papers and records in question were not mere
In addition to customer names,
contained information involving customer coverage, premium
amounts, cash values and loans against existing policies,N and
formation "rises to the level of 'confidential
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 14 of 17
customer information.'''); USI Ins. Servs. LLC v. Miner, 801 F.
Supp. 2d 175, 189 (S.D.N.Y. 2011) (finding that where employee
sent e-mail from former employer's business e-mail account to
personal e-mail containing names of companies and their
financial information, the document might contain trade secrets
or confidential information). Here, Mr. Eisenberg agreed not to
"use or disclose, directly or indirectly, and  keep strictly
secret and confidential all Confidential Information and Trade
Secrets" or ret n copies of Company Property during or for two
years a er
s employment. Such covenants are reasonable and
enforceable under New York law, and as such Mr. Eisenberg should
by the provisions he signed.
In any event, the
ance of hardsh
tips in favor of
DeWitt. Dewitt has established irreparable harm if Mr.
Eisenbe were to breach, or continue to
ch, the Employment
In contrast, Mr. Eisenberg can continue earning
livelihood at Gallagher or elsewhere; he is merely restrict
from using DeWitt's protected information as outlined in t
Employment Agreement to solicit clients.
Indeed, the Employment
Agreement at issue neither prohibits Mr.
competing with DeWitt nor precludes h
from soliciting clients
the entertainment insurance industry.
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 15 of 17
restrictions Mr. Eisenberg voluntarily
reasonably be said to disrupt his 1
lihood or cause him undue
rm. See Arthur J. Gallagher Servo Co, 2013 U.S. App. LEXIS
5875, at *11 (finding that factors weighed
liminarily enjoining employee from
ing his restrictive
covenant where employee retained
to compete for new
accounts, but employee's lost abil
y to solicit clients for two
years with whom the companies had an ongoing relationship).
III. DeWitt is not Required to Post a Bond
"The language of Rule 65(c) confers broad discretion on the
trial judge to set the amount of the bond, even to dispense
the bond requirement al
Inflight Newspapers v.
Magazines In-Flight, L.L.C., 990 F. Supp. 119, 140 (E.D.N.Y.
1997). Mr. Eisenberg
iled to establish that he is likely
to suffer any harm
posting of a bond and as such t
bond requirement is unnecessary.
See Doctor's Associates, Inc.
v. Stuart, 85 F.3d 975, 985 (2d Cir. 1996).
r is explicitly modeled by the terms of
. Mr. Eisenberg is hereby
enjoyed from vio
ing the Employment Agreement, including:
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 16 of 17
ing, misusing and/or otherwise
I information and/or trade secrets in
ion of Paragraph 5(a) of the
ing Paragraph 5(b) of the Employment Agreement
requiring Defendant to return any and all Company property
(including but not limited to hard copies of documents, e-
mails, electronic data and attachments) he may
olating Paragraph 5(c) of the
oyment Agreement which
prohibits Defendant, for the two (2) year pe od
llowing termination of employment (to be
extended by a
od of time
spent in violation of Paragraph 5(c)),
from using DeWitt's confidential information and/or trade
secrets to solicit, accept,
vert, or take away, in whole
or in part,
rectly or indirectly, any cl
s or prospect
of DeWitt who were solicited or serviced by Defendant or by
anyone directly or indirectly under Defendant's
supervision, or with whom Defendant had any business
, within the two (2) year period immediately
prior to Defendant's termination of employment; and
Case 1:13-cv-03060-RWS Document 12 Filed 06/04/13 Page 17 of 17
4. Violating Paragraph 5(d) of the Employment Agreement
prohibiting Defendant, for the two (2) year period
immediately following termination of employment, from
directly or indirectly (i) making known to any person,
business entity, firm or corporation the names or contact
details of any current employees of DeWitt, or any other
information pertaining to them, or (ii) attempting to
recruit of soli
, or a
solicitation of any employees of DeWitt.
It is so ordered.
New York, NY