Osborne Assocs., Inc. v. Sheryl Cangemi, Julie Calianno, & Silver Salons & Spas, LLC, Case No. 3:17-cv-1135-J-34MCR
| Decision Date | 14 November 2017 |
| Docket Number | Case No. 3:17-cv-1135-J-34MCR |
| Parties | OSBORNE ASSOCIATES, INC., d/b/a Generations Salon Services, Plaintiff, v. SHERYL CANGEMI, JULIE CALIANNO, and SILVER SALONS & SPAS, LLC Defendants. |
| Court | U.S. District Court — Middle District of Florida |
THIS CAUSE is before the Court on Plaintiff's Verified Complaint and Demand for Jury Trial (Doc. 1; Complaint), filed on October 10, 2017, and Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction and Incorporated Memorandum of Law (Doc. 3; Motion) filed on October 11, 2017. Defendants filed a response in opposition to the Motion on October 26, 2017, see Defendants' Response in Opposition to Plaintiff's Motion for Preliminary Injunction (Doc. 21; Response), and in accordance with the Court's Order (Doc. 16; Briefing Order), Plaintiff filed a reply on October 31, 2017, see Plaintiff's Reply to Defendants' Response in Opposition to Plaintiff's Motion for Preliminary Injunction (Doc. 24; Reply). The Court held a hearing on November 2, 2017, during which the Court heard testimony from two witnesses and oral argument from counsel.1
After filing the Complaint, Plaintiff Osborne Associates, Inc., d/b/a Generations Salon Services (Generations Salon or Plaintiff) filed a Motion to Expedite Discovery (Doc. 4; Motion to Expedite) on October 11, 2017. Prior to receiving leave of court to expedite discovery, Generations Salon proceeded to serve a subpoena on a current client of Defendant Silver Salons & Spas, LLC (Silver Salons). See Sheryl Cangemi, Julie Calianno and Silver Salons & Spas, LLC's Response in Opposition to Plaintiff's Motion for Expedited Discovery and Request for Sanctions, ¶¶ 11-13 (Doc. 22; Defendants' Response and Request for Sanctions), filed October 26, 2017. Generations Salon's service of that subpoena prompted Defendants to file a motion for sanctions. On October 30, 2017, the assigned magistrate judge denied Plaintiff's Motion to Expedite and took Defendants' request for sanctions under advisement. See Order Denying Motion to Expedite and Taking Under Advisement Motion for Sanctions (Doc. 23; Order Denying Motion to Expedite).2 The following day, Generations Salon filed its Reply. With the Reply, Generations Salon included as exhibits some of the documents and information it obtained as a result of the subpoena. See Reply, Attach. 1, Exs. B - D. In response, on November 1, 2017, Defendants filed a Motion to Treat Documents as Non-Trade Secrets and a Second Request for Sanctions Against Plaintiff (Doc. 25; Motion to Treat Documents as Non-Trade Secrets). There, Defendants contended that many of the documents Generations Salon included in its Reply contained un-redacted information Generations Salon was otherwise claiming as trade secrets in this action. Id. at ¶¶ 6-7.Additionally, Defendants reasserted their request that sanctions be imposed on Generations Salon for the premature issuance of the subpoenas. Id. at ¶ 8.3
At the Preliminary Injunction Hearing, without determining the ultimate propriety of the issuance of the subpoenas, the Court ruled that the documents obtained by Generations Salon by virtue of the subpoena would not be considered by the Court for the purposes of resolving the Motion. Specifically, those documents included exhibits B - D, which were part of Attachment 1 of Plaintiff's Reply. Reply, Attach. 1, Exs. B - D. However, the Court declined to treat all the information contained in Generations Salon's Reply as non-trade secrets, or to impose sanctions on Generations Salon, noting that the question of sanctions was already before the assigned magistrate judge.4 In light of the fact that the Court will not consider the information contained in the Plaintiff's Reply, Attachment 1, Exhibits B - D, the Court will also not consider any arguments of the parties that stem from those documents.
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. Complaint at ¶ 1, ¶¶ 21-22. Generations Salon has over 300 on-site salons nationwide and services over 30,000residents each month. Id. at ¶ 2. It operates salons in Florida, Pennsylvania, New York, New Jersey, Delaware, Maryland, Virginia and Texas. Id. at ¶ 4.
Generations Salon hired Defendant Sheryl Cangemi ("Cangemi") on March 2, 2016, id., Exhibit A at 5, to be its Director of Business Development. Id. at ¶ 3. In her position, 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. Id. at ¶ 4.6 Generations Salon hired Defendant Julie Calianno ("Calianno") in March of 2016 as a Regional Operations Manager. Id. at ¶ 5; id. at Exhibit B at 1.7 Calianno oversaw operations in the Pennsylvania region. Id. at ¶ 5, 31-32. By virtue of their respective positions, both women had access to information relating to Generations Salon's "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." Id. at ¶ 3.8
Before working for Generations Salon, Cangemi had at least 14 years' experience in the senior salon services industry. Response, Attach. 1, Cangemi Decl. ¶ 3 (Cangemi Decl.). Immediately prior to her employment with Generations Salon, she was an independent contractor performing salon services at Bay View Healthcare (Bay View). Redacted Transcript of Preliminary Injunction Hearing held on November 2, 2017 at 4-5,9-10 (Doc. 30; Tr.), filed on November 6, 2017. At Bay View, Cangemi was the sole stylist and was working as an individual, not as an owner of a company. Id. at 4, 9-10. Indeed, she had not set up a company. Id. at 9. Prior to that, Cangemi had worked for at least one other senior salon service provider in the industry, Salon PS. Cangemi Decl. ¶ 8, 10. Calianno had also worked for Salon PS, and prior to joining Generations Salon, she had worked for Salon PS for approximately three years. Calianno Decl. ¶¶ 3, 9.9 Neither Cangemi nor Calianno presented evidence that either had experience in marketing or negotiating contracts for the operation of on-site salons within senior or assisted living communities, or management of such salons before joining Generations Salon.
As a condition of employment with Generations Salon, both women signed Non-Compete 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 Salon's confidential and proprietary information.
Complaint at ¶ 6; id. at Exhibit A & B.10 However, given the relationship Cangemi already had with Bay View, Generations Salon and Bay View altered the standard language in the contract between Bay View and Generations Salon which stated:
[d]uring the term of this agreement [Bay View] agrees to use the exclusive services of [Generations Salon] for all of its hair grooming requirements. [Bay View] agrees not to approach [Generations Salon's] agents for the purpose of engaging their services directly or indirectly during the term of this agreement and for a twelve-month period after the termination of this agreement.
Reply, Attach. 2, Ex. B at ¶ F. Next to this language, both the party negotiating on behalf of Bay View, and Marvin Weinstein, President of Generations Salon, initialed a notation that stated "This would not apply to Sheryl Cangemi." Id. Thus, the agreement between Bay View and Generations Salon provided that Cangemi "could go work for Bayview, notwithstanding the fact that language in [Generations Salon's] contract with [Bayview]" would prevent Bay View from hiring any Generations Salon employees. Id., Attach. 2 at ¶ 8. Cangemi construes the Bay View agreement to suggest that should Cangemi leave Generations Salon, the contract between Bay View and Generations Salon would end, and "Bayview would come with [her.]" Cangemi Decl. at ¶ 10. However, the record before the Court does not support Cangemi's interpretation of the Bay View and Generations Salon agreement. Nor does the copy of Cangemi's fully executed covenant-not-to-compete support such an interpretation. Complaint, Attach 1.11
Cangemi left her employment with Generations Salon on January 26, 2017, and Calianno followed shortly after that. Tr. at 11; Calianno Dec. at ¶ 4. 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. Complaint at¶ 46.12 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. Tr. at 11.
By February 1, 2017, Silver Salons had already signed contracts with two communities, Bay View and Anthem Lakes. Tr. at 12-13. 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. Complaint at ¶ 52; Reply, Attach. 3 at ¶¶ 13-14 (Allyson DeNardo Decl.). As of the date of the Cangemi and Calianno declarations, Silver Salons was providing senior salon services to ten customer communities, nine in Florida and one (Rose Tree Place) in Pennsylvania. Cangemi Decl. at ¶ 11.13 In their declarations, Cangemi and Calianno...
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