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Catalyst Outdoor Advertising, LLC v. Douglas

United States District Court, E.D. Pennsylvania

May 24, 2018

CATALYST OUTDOOR ADVERTISING, LLC
v.
JENNIFER DOUGLAS

          MEMORANDUM OPINION

          Savage, J.

          Catalyst Outdoor Advertising, LLC (Catalyst) moves for a preliminary injunction enjoining its former employee, Jennifer Douglas, from continuing her employment with an alleged competitor. It seeks to enforce the non-compete and non-solicitation provisions in her employment agreement.[1] Central to the dispute is the agreement's failure to define the geographic area where Douglas may not compete and solicit. The dispositive issue is whether she works for a company that actually competes in the same market with Catalyst.

         Douglas, who now sells advertising space in New York City, argues that the absence of a geographic limitation on the non-competition bar renders the agreement unreasonably broad. She contends that even if the non-compete agreement were enforceable, Catalyst and her new employer, City Outdoor, LLC (City Outdoor), do not compete in the same market.[2] She maintains that City Outdoor operates exclusively in Manhattan and the Bronx, and Catalyst does not.

         After reviewing the parties' submissions and after a hearing, we shall deny the motion for a preliminary injunction. City Outdoor operates exclusively in New York City. Catalyst, on the other hand, operates billboards in Southeastern Pennsylvania and one in New Jersey. It has limited plans to develop in New York and no plans to develop in New York City. Because we find the two companies do not compete in the same market, we shall not enjoin Douglas from working for City Outdoor in New York.

         Factual Background

         When Catalyst, an outdoor advertising company that acquires and rents billboard space, hired Douglas in February 2016 to grow its business nationally, she signed an employment agreement containing non-competition and non-solicitation clauses.[3] Both provisions have a time limit of two years. Neither has a geographic limitation. The noncompetition provides in part:

[F]or the period of two (2) years following the voluntary or involuntary termination of Employee's [Douglas'] employment with Employer [Catalyst], the Employee [Douglas] agrees and covenants not to engage in Prohibited Activity within the out of home media industry.[4]

         Prohibited Activity is defined as:

[A]ctivity in which the Employee [Douglas] contributes her knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, partner, director, stockholder, officer, volunteer, intern or any other similar capacity to an entity engaged in the same or similar business as the Employer [Catalyst].[5]

         Douglas is prohibited from working for anyone engaged “in the same or similar business” as Catalyst, except three of the largest advertising companies, Clear Channel Outdoor, Lamar, and Outfront.[6] The non-solicitation clause bars Douglas from “directly or indirectly” soliciting, contacting, and attempting to contact or meet with Catalyst's current or prospective customers.[7] Douglas is allowed to contact present or former Catalyst customers if employed by either of the three excepted companies. However, the exception does not extend to trade secrets, customer lists, or proprietary or confidential information. She cannot share that information with anyone.[8]

         Douglas was terminated from Catalyst in November 2017.[9] One month later, she began working for City Outdoor, another outdoor advertising company.[10] City Outdoor does not sell any advertising space in Pennsylvania or New Jersey.[11] Nor does it have plans to develop advertising space in those states through 2019.[12]

         Seeking to enforce the non-compete and non-solicitation provisions, Catalyst filed a motion for a preliminary injunction to enjoin Douglas from working at City Outdoor. It contends that, because City Outdoor also sells billboard space within the same Designated Market Area (DMA)[13] as Catalyst, Douglas is prohibited from working there.

         Catalyst does not contend Douglas has any confidential documents or has disclosed trade secrets. Rather, it maintains that she possesses knowledge of Catalyst's business and its development plans that could be used by City Outdoor.

         Discussion

         In determining whether preliminary injunctive relief is available, we consider four factors: (1) the likelihood that Catalyst will succeed on the merits; (2) the threat of irreparable harm to Catalyst if an injunction is not granted; (3) whether granting an injunction will result in greater harm to Douglas than Catalyst; and (4) whether injunctive relief will be in the public interest. Reilly v. City of Harrisburg, 858 F.3d 173, 176 (3d Cir. 2017); N.J. Retail Merchants Ass'n v. Sidamon-Eristoff, 669 F.3d 374, 385-86 (3d Cir. 2012).

         If the moving party demonstrates that it can succeed on the merits and it will more than likely suffer harm if preliminary relief is not granted, then we consider and balance the remaining factors to determine if equitable relief is warranted. Mazurek v. Armstrong,520 U.S. ...


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