This assignment will consist of an APA format paper. Case Analysis Paper: Case Osborne Assocs. v. Cangemi page 47

• Your responses should be well-rounded and analytical and should not just provide a conclusion or an opinion without explaining the reason for the choice. For full credit, you must use the material from the textbook by using APA citations with page numbers when responding to the questions.
• Utilize the case format below.

Read and understand the case. Show your analysis and reasoning and make it clear you understand the material. Be sure to incorporate the concepts of the chapter we are studying to show your reasoning. For each of the cases, you select, dedicate one subheading to each of the following outline topics.

• Case: (Identify the name of the case and page number in the textbook.)
• Parties: (Identify the plaintiff and the defendant.)
• Facts: (Summarize only those facts critical to the outcome of the case.)
• Issue: (Note the central question or questions on which the case turns.)
• Applicable Law(s): (Identify the applicable laws.) Use the textbook here by using citations. The law should come from the same chapter as the case. Be sure to use citations from the textbook including page numbers.
• Holding: (How did the court resolve the issue(s)? Who won?)
• Reasoning: (Explain the logic that supported the court's decision.)
• Case Questions: (Explain the logic that supported the court's decision.) Dedicate one subheading to each of the case questions immediately following the case. First, fully state the question from the book and then fully answer.
• Conclusion: (This should summarize the key aspects of the decision and also your recommendations on the court's ruling.)
• Include citations and a reference page with your sources for all of the cases. Use APA-style citations with page numbers and references.

Osborne Assocs. v. Cangemi, 2017 WL 5443146 (M.D. Fla. 2017)

Plaintiff is a salon and spa treatment company that serviced residents of senior living facilities. Defendants were former employees of the company and had signed non-compete agreements. They began working for a competitor of the plaintiff. The court ruled the plaintiff had protectable interests in its customer relationships as well as the confidential business information it developed to further those relationships and enforced the non-competes against the defendants. Howard, D. J.

II. Background Over the last 25 years, Generations Salon has provided professional salon and spa services to residents in senior living facilities, personal care and assisted living communities, as well as health care and nursing centers. Generations Salon has over 300 on-site salons nationwide and services over 30,000 residents each month. . . . Generations Salon hired Defendant Sheryl Cangemi (Cangemi) on March 2, 2016, to be its Director of Business Development. . . . Cangemi was responsible for high level contacts with decision makers, seeking out, maintaining, and developing business relationships with senior living communities, stylists, and cosmetologists in at least the state of Florida.

Generations Salon hired Defendant Julie Calianno (Calianno) in March of 2016 as a Regional Operations Manager. Calianno oversaw operations in the Pennsylvania region. By virtue of their respective positions, both women had access to information relating to Generations Salons customers, stylists, key personnel, the terms of its contracts with senior living communities, pricing, suppliers, marketing strategies and prospective customer pipeline, among other types of information.

As a condition of employment with Generations Salon, both women signed NonCompete agreements which restricted each from:

working in a competitive capacity for a period of one year following termination of employment; soliciting any client, customer, officer, staff, or employee of Generations Salon for her own benefit or for the benefit of a third-party that is engaged in a similar business to Generations Salon; and using or disclosing Generations Salons confidential and proprietary information.

Cangemi left her employment with Generations Salon on January 26, 2017, and Calianno followed shortly after that. Prior to leaving Generations Salon, and unbeknownst to their employer, the women formed Silver Salons in November 2016. Neither informed Generations Salon of where she actually intended to work following her resignation, or that the two had formed Silver Salons. However, at the time they formed Silver Salons in November 2016, both Cangemi and Calianno had the intention of entering into the senior salon services industry.

By February 1, 2017, Silver Salons had already signed contracts with two communities, Bay View and Anthem Lakes. Silver Salons solicited and is now serving at least one other former client of Generations Salon that is Rose Tree Place in Pennsylvania and is in direct competition with Generations Salon in the senior salon services industry. [. . .] On October 10, 2017, Generations Salon filed suit against Cangemi, Calianno, and Silver Salons.

Generations Salon accuses Cangemi and Calianno of breaching the terms of their non-compete agreements, breaching their fiduciary duties . . . In particular, Generations Salon asserts that what differentiates it from its competitors is the information Generations Salon has developed about its customers and prospective customers, the stylists who contract with Generations Salon to perform services at the communities where Generations Salon provides services, customer pricing and discounting strategies, marketing strategies, supplier information, specific considerations relating to the resident populations at Generations Salons customers and their respective buying habits, and a host of additional page 48information that is unknown and not readily ascertainable by Generations Salons competitors, all of whom could benefit from the disclosure or use of this information.

Generations Salon considers this information to constitute its trade secrets, much of which is kept and maintained in its proprietary database (the Stanglware database named after its creator, Fred Stangl). One means by which Generations Salon protects its information is by requiring employees who have access to it, like Cangemi and Calianno, to sign non-compete agreements[. . .]

Generations Salon asserts that it is necessary to enforce the non-compete agreements both women signed in order to protect Generations Salons legitimate business interests. Specifically, Generations Salon seeks to protect its customers and prospective customers, the stylists who contract with Generations Salon to perform services at the communities where Generations Salon provides services, customer pricing and discounting strategies, marketing strategies, supplier information, specific considerations relating to the resident populations at Generations Salons customers and their respective buying habits.

Likewise, Generations Salon asserts that it will suffer irreparable injury if the Defendants are not enjoined. In particular, the company claims that [t]he injury here is not speculative, it is already occurring [. . . .] [Cangemi and Calianno] are competing in Generations Salons markets, in a direct capacity, in a specialized industry, and are armed with Generations Salons confidential and trade secret information. Upon information and belief, Cangemi and Calianno have already diverted customers and independent contractors from Generations Salon, using their knowledge gained by being entrusted employees at Generations Salon. In response, Defendants claim that their actions have not caused irreparable harm to Generations Salon. They argue that [p]laintiff has failed to identify a single customer that Defendants have solicited or a single customer that Plaintiff has lost or stands to lose by virtue of Defendants actions. They further assert that they have not solicited and do not intend to solicit Plaintiffs customers.

IV. Applicable Law b. Non-compete agreements i. Florida law (applicable to Cangemis agreement) Under Florida law, a restrictive covenant in the employment setting is valid if the employer can prove (1) the existence of one or more legitimate business interests justifying the restrictive covenant; and (2) that the contractually specified restraint is reasonably necessary to protect the established interests of the employer. AutoNation, Inc. v. OBrien, 347 F. Supp. 2d 1299, 1304 (S.D. Fla. 2004). Florida statute section 543.335 further provides that a legitimate business interest includes, but is not limited to: [t]rade secrets, as defined . . . [by state statute]; [v]aluable confidential business or professional information that otherwise does not qualify as trade secrets; [s]ubstantial relationships with specific prospective or existing customers, patients, or clients; [c]ustomer, patient, or client goodwill associated with: [a]n ongoing business or professional practice, by way of trade name, trademark, service mark, or trade dress; [a] specific geographic location; or [a] specific marketing or trade area; [and] [e]xtraordinary or specialized training.

V. Discussion The threshold inquiry for the Court is whether Generations Salon has shown a likelihood of success on the merits of its claims against Cangemi and Calianno based upon the restrictive covenants. In this regard, the Court must determine whether the restrictive covenants seek to protect Generations Salons legitimate business interests. Should the Court determine that the covenants do protect legitimate business interests, thereby permitting a presumption of irreparable harm, the Court must then page 49consider whether Cangemi and Calianno successfully rebut that presumption. Likewise, the Court must consider the balance of harms, and whether the public interest is served by entering a preliminary injunction. [. . .] a. Substantial likelihood of success in the enforcement of the non-compete agreements.

As relevant to this action, in Florida, a valid covenant-not-to-compete must be supported by a one or more legitimate business interests. FLA. STAT. 542.335(1)(b). Similarly, Pennsylvania requires that any such restrictions imposed by the covenant are reasonably necessary for the protection of the employer. Both states take the general approach that trade secrets, confidential information, good will, customer lists, and relationships with clients, all constitute legitimate interests which can be protected by covenants-not-to-compete.

Here, Generations Salon asserts that Defendants have disclosed and used and will inevitably disclose and use [. . . ] the following types of trade secret information which they learned by virtue of their respective employment with Generations Salon: (i) high level contacts with decision makers; (ii) potential customers Generations Salon has targeted and plans to target; (iii) market growth opportunities; (iv) Generations Salons strengths and weaknesses with its customers; (v) specific products, vendors, and arrangements with third parties that may increase profitability; (vi) other information which, collectively, will result in Silver Salons being able to shortcut what it has taken Generations Salon years of labor and expense to build.

Similarly, Generations Salon asserts the non-compete agreements both women signed are necessary to protect Generations Salons legitimate business interests in terms of its customers and prospective customers, the stylists who contract with Generations Salon to perform services at the communities where Generations Salon provides services, customer pricing and discounting strategies, marketing strategies, supplier information, specific considerations relating to the resident populations at Generations Salons customers and their respective buying habits. . . .

For the purposes of resolving the Motion, the Court will focus on Generations Salons contention that it possesses legitimate business interests in its relationships with current and past customers, its confidential client lists and other confidential business information, and its goodwill. On the current record, Generations Salons allegations of needing to protect its trade secrets, stylist lists, and supplier information, find far less support.

Cangemi and Calianno do not contest that Generations Salon has a legitimate business interest in its customer goodwill. While they assert that the identities of Generations Salon customers are not confidential, they do not dispute that Generations Salon has substantial relationships with its current and prospective customers. Florida courts have held that a substantial relationship is more likely to exist where there is active, on-going business being conducted; exclusivity; a customer who cannot be easily identified by other competitors in the industry; and an expectation of continued business. IDMWORKS, LLC v. Pophaly, 192 F. Supp. 3d 1335, 1340-41 (S.D. Fla. 2016). Here, it is undisputed that Generations Salon enters into exclusive contractual relationships with its customers. It is also undisputed that Generations Salon has active ongoing relationships with its customers. Thus Generations Salon has established a legitimate business interest in its substantial relationships with its customers. . . .

Generations Salon asserts that its Stanglware data is unique in that it was compiled and created by the industry of Generations Salon, and that this data also contains non-publicly available information such as the identities of key decision makers and what pitches to make. Although Defendants contend that Generations Salons alleged confidential information is generally available, the evidence before the Court does not support such a finding. While the identities of senior communities and their corporate owners is certainly information that is readily available, the identity of specific decision makers and their contact information does not appear to be so available. Indeed, an e-mail from Cangemi to Lee Weinstein shows that she could not find the phone number for a key contact for a potential customer community because the company only list[ed] an 877# online. [. . .] Thus, the evidence before the Court at this time would support a conclusion that Generations Salon possesses confidential business information that it has compiled, is not otherwise readily available to its competitors and derives value from being confidential.

While protection of an employer from ordinary competition is not a legitimate business interest, Evans, 178 So. 3d at 116, the evidence presented by Generations Salon suggests more than just mere competition. On this record, Generations Salon has shown a substantial likelihood of establishing that it has confidential business page 50information entitled to protection pursuant to Florida Statute section 542.335 and Pennsylvania law.