United States District Court, D. Connecticut
RULING AND ORDER ON THE MOTION FOR A PRELIMINARY
A. BOLDEN UNITED STATES DISTRICT JUDGE.
30, 2018, A Royal Flush, Inc. (“Plaintiff” or
“A Royal Flush”) moved for a preliminary
injunction against Anir Arias (“Defendant” or
“Mr. Arias”) to enforce written agreements
allegedly barring him from working for A Royal Flush
competitors in general for one year after leaving the company
and, for one competitor, United Site Services, Inc.
(“United Site Services”), for two years after
leaving the company.
reasons discussed below, the Motion for Preliminary
Injunction is GRANTED IN PART AND DENIED IN
December 28, 2017 Restrictive Covenants Agreement shall be
enforceable against Mr. Arias and, until July 13, 2019, Mr.
Arias is enjoined from disclosing any confidential customer
information related to A Royal Flush clients, proprietary
business information related to A Royal Flush, or working in
any capacity where his services would be used for direct
competition with A Royal Flush in the States of Connecticut,
New York, New Jersey, Massachusetts, and Pennsylvania.
July 11, 2018 Employment Agreement, however, cannot provide a
basis for a preliminary injunction and the request for such
relief under this agreement therefore is denied.
FACTUAL AND PROCEDURAL HISTORY
Factual Findings 
days, September 6, 2018 and September 12, 2018, the Court
heard evidence on A Royal Flush's motion for a
preliminary injunction. Twenty-five exhibits were entered
into evidence and five witnesses testified: (1) Timothy F.
Butler, majority shareholder and Chairman of the Board of
Directors of A Royal Flush; (2) Thomas A. Butler, Jr., Chief
Executive Officer of A Royal Flush; (3) Alexandra Townsend, a
Vice-President of A Royal Flush; (4) Anir Arias, A Royal
Flush's former New York Regional Manager and currently an
employee for United Site Services; and (5) Ron Carapezzi, the
President and Chief Executive Officer of United Site
Services. As a result of the evidence presented at the
two-day hearing and the parties' written submissions, the
Court finds the following:
more than two decades ago by five friends, A Royal Flush
provides portable toilets and trailers for specialty events,
municipalities, and construction sites. Memorandum of Law in
Support of Plaintiff's Motion for Preliminary Injunction,
ECF No. 11. A Royal Flush's principal office is in
Bridgeport, Connecticut. Aff. of Timothy F. Butler, Mot. For
Preliminary Injunction, ECF No. 13 (“TFB Aff.”).
There are additional A Royal Flush offices in Holyoke,
Massachusetts; Newark, New Jersey; Philadelphia,
Pennsylvania; and the Bronx; New York. Id. A Royal
Flush does business throughout the State of Connecticut the
five boroughs of New York City and the New York State
counties of Westchester, Rockland, Orange, Nassau and Putnam,
and Philadelphia, Pennsylvania and the surrounding counties,
as well as southeastern and western Massachusetts.
Id. According to Timothy Butler, A Royal Flush also
does business in Rhode Island and Delaware.
Site Services is a major competitor of A Royal Flush and has
a significant national presence, with offices in well over
twenty states. United Site Services' national presence
has grown through acquisitions of other smaller companies,
including a prior attempt to purchase A Royal Flush.
April of 2017, William A. Malone, A Royal Flush's then
president and majority shareholder, committed suicide. Since
then, there have been organizational changes as well as
employee departures, including Mr. Arias as well as Chris
Ploof, A Royal Flush's former event and restrooms trailer
specialist, and Anthony Yetskofsky, A Royal Flush's
former Fleet Manager. Id. Mr. Arias left A Royal
Flush to work for United Site Services in July 2018.
Arias began working for A Royal Flush of New York II, Inc.
(“A Royal Flush of New York II”), a New York
Affiliate of A Royal Flush, in January of 2014. Memorandum in
Opposition to Plaintiff's Motion for Preliminary
Injunction, ECF No. 33. He rose in the company to become New
York/New Jersey Regional Manager, with responsibility for
managing A Royal Flush's distribution throughout New York
and New Jersey; he ran operations, managed delivery routes,
oversaw personnel, coordinated with mechanics, supervised set
up and breakdown for special events, and dealt with customer
case centers around three alleged agreements between and
among Mr. Arias, A Royal Flush, and A Royal Flush NY: (1) an
August 4, 2017 Confidentiality Agreement; (2) a December 28,
2017 Restrictive Covenants Agreement; and (3) a July, 11,
2018 Employment Agreement.
August 4, 2017 Confidentiality Agreement with A Royal
August of 2017, A Royal Flush instituted a company-wide
policy of requiring the signing of an employee
confidentiality and non-disclosure agreement as part of
continued employment with A Royal Flush.
this confidentiality agreement, Mr. Arias, then a Senior
Dispatcher for the New York Area, agreed that he “will
not disclose, use, lecture upon or publish any of the
Company's Confidential and Proprietary
Information.” Plaintiff's Ex. 2. This prohibition
included marketing strategies, customer information, vender
information, and service routes. Mr. Arias also agreed that A
Royal Flush “shall have the right to enforce this
agreement and any of its provisions by injunction.”
December 28, 2017 Restrictive Covenants Agreement with A
December 2017, in exchange for accepting a raise, a promotion
to regional manager, and a bonus, Mr. Arias signed another
agreement: a Restrictive Covenants Agreement that contained
non-competition, non-solicitation, and non-disclosure
covenants. Plaintiff's Ex. 3. (“Ex. 3”). Four
sections of the Restrictive Covenants Agreement are relevant
to this case.
Section 2 of the Restrictive Covenants Agreement establishes
that “for a period of 12 months from the date of
termination, ” Mr. Arias “shall not engage in any
business or activity, or legally, equitably, or beneficially,
directly or indirectly, in any capacity . . . in the type of
business the company is engaged in, and with any business
which is in competition with the Company.” Ex. 3.
Section 7 of the Restrictive Covenants Agreement states that
during Mr. Arias' employment, and for a period of twelve
months thereafter, he shall not solicit any business from
current or prospective customers of the company within the
“States of Connecticut and New York, Counties of
Westchester and Rockland, the entire state of New Jersey,
southeastern Massachusetts and Philadelphia, PA . . .”
Ex. 3. Section 7 also contains a non-competition agreement
that prohibits Mr. Arias from soliciting “employment or
engagement” with a competitor for a period of twelve
Section 9 of the Restrictive Covenants Agreement acknowledges
that “the Company shall be entitled to temporary and
permanent injunctive relief . . .[and] attorney's fees
and costs incurred in connection with enforcing its rights,
” among other remedies.
Section 10 of the Restrictive Covenants Agreement fixes the
terms to interpretation and enforcement “according to
the laws of the State of New York without giving effect to
the principles of conflicts of law thereof.” This
section later states that the Restrictive Covenants Agreement
shall be binding upon “successors and assigns and may
be transferred by the Company or to any successor (whether by
merger, consolidation, sale of assets or otherwise) or
assigns.” Ex. 3. Finally, this Section permits a court
to reform and construe the Restrictive Covenants Agreement
“to provide the protected party the maximum protection
permissible by law.” Id.
signing the Restrictive Covenants Agreement, Mr. Arias took a
promotion and advanced role with A Royal Flush. According to
Mr. Arias' testimony, he was in charge of dispatch
operations for the New York and New Jersey regions. This new
role involved supervising dispatch operators, scheduling
deliveries, managing truck routes, coordinating with
mechanics, addressing customer service issues, and overseeing
on-site setup, attendance, and breakdown of portable toilets.
A Royal Flush Absorbs A Royal Flush of New York II
to hearing testimony from Timothy and Thomas Butler, A Royal
Flush merged with A Royal Flush of New York II, which
resulted in A Royal Flush controlling A Royal Flush of New
York II's assets and Thomas Butler becoming the majority
shareholder of A Royal Flush. Mr. Arias then began receiving
his salary from A Royal Flush and became its employee.
Mr. Arias Signs June 2018 Employment Agreement with United
18, 2018, Mr. Arias entered an employment agreement with
United Site Services. During the course of negotiations,
United Site Services sent Mr. Arias his offer for employment
as a Premier Trailer Solutions Manager based in Westborough,
Massachusetts on June 15, 2018. Plaintiff's Ex. 10
(“Ex. 10”). The agreement notes the existence of
the Restrictive Covenants Agreement with A Royal Flush. The
offer letter states that Mr. Arias' new role “shall
strictly preclude [his] participation in any activities that
may be deemed in violation of the provisions of the
Restrictive Covenants Agreement.” Id.
18, 2018, Mr. Arias accepted the terms and signed this offer
letter. Id. As a condition of his employment, Mr.
Arias signed employment and confidentiality agreements with
United Site Services, effective July 9, 2018. Plaintiff's
Mr. Arias Continues Employment Negotiations with A Royal
Flush during the end of June and early July of 2018
Mr. Arias officially began working for United Site Services
on July 9, 2018, he continued to work at A Royal Flush until
July 13, 2018. TFB Aff. In fact, during this time period, he
engaged in ongoing employment negotiations with A Royal Flush
until his departure. Around June 22, 2018, Mr. Arias advised
A Royal Flush that he had been approached by United Site
Services and intended to leave A Royal Flush. A Royal Flush
officers and Mr. Arias engaged in back-and-forth negotiation
with the goal of keeping Mr. Arias with A Royal Flush.
Plaintiff's Exs. 4-6, 8.
before these negotiations, according to the testimony of
Timothy Butler, A Royal Flush earlier had agreed to a salary
increase, a bonus opportunity, and a new four-door pickup
truck for Mr. Arias' personal and professional use. TFB
Aff. The negotiations in June of 2018 discussed an additional
salary increase, a bonus opportunity, an ownership interest
and other benefits. In exchange, Mr. Arias would agree to a
new employment agreement, which contained a non-compete
provision that prohibited employment with a competitor in any
state where A Royal Flush had “offices, facilities or
customers” without A Royal Flush consent for a period
of one year and a restricted period of two years for United
Site Services. Plaintiff's Exs. 5, 6, 7.
27, 2018, Timothy Butler sent Mr. Arias an e-mail, stating
that the Plaintiff's management had agreed to the offer
terms Mr. Butler and Mr. Arias discussed. Plaintiff's Ex.
4. Mr. Arias stated that he would review the agreement, when
he received it. Id.
10, 2018, Thomas Butler, Plaintiff's Chief Executive
Officer, sent Mr. Arias by e-mail an employment agreement for
the position of Regional Manager of A Royal Flush's New
York Region. Plaintiff's Ex. 5. This agreement included a
salary increase, a guaranteed bonus, use of an employer
vehicle, tuition reimbursement, and eligibility to
participate in the employer's stock option plan.
8 of the Employment Agreement outlined new restrictive
covenants that would prohibit Mr. Arias from working for a
competitor in any state for which the Plaintiff had
“office, facilities, or customers, or any state,
province, or similar subdivision of any other country in the
world in which the [A Royal Flush had] offices, facilities,
or customers, without the prior written consent of [A Royal
Flush].” Id. The provision further defines a
competitor as “any business that Employee knows the
Employer conducts or proposes to conduct . . . rental,
delivery, installation, maintenance, and removal of portable
toilets and restrooms . . .” An additional provision
was added for United Site Services, which increased the
restricted period to two years. Id. ...