United States District Court, D. Kansas
MEMORANDUM AND ORDER
CARLOS MURGUIA, District Judge.
This matter comes before the court on Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction (Doc. 4). The court held an evidentiary hearing on plaintiffs' motion, and the parties filed post-hearing briefs. For the reasons below, the court grants plaintiffs' motion for preliminary injunction.
Plaintiffs filed this suit against defendants Interim Healthcare of Wichita, Inc. ("Interim") and Lisa Stearns, alleging a breach of contract against Stearns, tortious interference with contract against Interim, and civil conspiracy against both. Interim directly competes with plaintiffs in a few areas and offers similar services in other areas. Plaintiffs also filed the present motion, seeking to enforce the non-compete provision in its Employment Agreement with Stearns. Stearns is a former account representative with plaintiffs and a current account representative at Interim.
II. Legal Standard
A preliminary injunction is an extraordinary remedy that should be granted only when the moving party clearly and unequivocally demonstrates its necessity. Hill's Pet Nutrition, Inc. v. Nutro Prods., Inc., 258 F.Supp.2d 1197, 1204 (D. Kan. 2003) (citation omitted). Plaintiffs must show: "(1) a likelihood of success on the merits; (2) a likelihood that the movant will suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in the movant's favor; and (4) that the injunction is in the public's interest. Crowe & Dunlevy, P.C. v. Stidham, 640 F.3d 1140, 1157 (10th Cir. 2011) (citing Chamber of Commerce v. Edmondson, 594 F.3d 742, 764 (10th Cir. 2010) (internal quotation marks omitted); Fed.R.Civ.P. 65). These must be proven by clear and unequivocal proof. O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 976 (10th Cir. 2004) (en banc). Where the movant has prevailed on the other factors, the Tenth Circuit generally uses a liberal standard for the "likelihood of success on the merits" factor, meaning the movant need only raise "questions going to the merits so serious, substantial, difficult and doubtful as to make them a fair ground for litigation and thus for more deliberate investigation." Lundgrin v. Claytor, 619 F.2d 61, 63 (10th Cir. 1980) (internal quotations omitted).
The following three types of injunctions are subject to a heightened burden: (1) preliminary injunctions that alter the status quo, (2) mandatory preliminary injunctions; and (3) preliminary injunctions that afford the movant all the relief it could recover at the conclusion of a full trial on the merits. O Centro, 389 F.3d at 975. If the injunction is one of those three types, the Tenth Circuit's modified-likelihood-of-success-on-the-merits standard is unavailable. Id. at 975-76.
III. The Agreement
On December 14, 2012, plaintiffs and Stearns entered into an Employment Agreement ("Agreement"). (Hearing Pl. Ex. 5.) The Agreement provides in relevant part as follows:
Employee covenants and agrees that during his/her employment, and for a period of one (1) year after Employee's employment with the Company is terminated or ends for any reason (the "Non-Competition Period"), Employee will not, as an employee, consultant, independent contractor, officer, shareholder, director, partner, owner, or in any other capacity, provide, manage or supervise services within the "Restricted Area"... that are the same as or similar in purpose or function to those services [Stearns] has provided to the company... if such services are being provided for the benefit of any business, firm, proprietorship corporation, partnership, association, entity or venture engaged in any part of the Business...
During Employee's employment, and for a period of one (1) year after Employee ceases to be employed by the Company for any reason, Employee will not knowingly contact, solicit, or communicate with a client, customer, patient or Referral Source to cease or reduce doing business with the Company or to divert Business-related opportunities (home health or hospice care) to some person or entity engaged in any part of the Business (other than the Company), nor will Employee aid or assist any other person, business, or legal entity to do any of the aforesaid prohibited acts. The restriction created by this paragraph (the "Non-Solicitation Restriction) is limited to clients, customers, patients and Referral Sources that Employee had material contact or business dealings with...
In the event Employee breaches a time-limited restriction contained in this Agreement, Employee hereby agrees that the applicable period of restriction shall be extended by one day for each day the Employee is to have been in violation of such restriction up to, but not to exceed, a length of time that is equal in length to the period of restriction that would have applied absent the violation.
(Id. at 5-6, ¶¶ 3a, ...