James Turnell v. Centimark Corporation ( 2015 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-2758
JAMES TURNELL,
Plaintiff-Appellant,
v.
CENTIMARK CORPORATION,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 13 C 2660 — Virginia M. Kendall, Judge.
____________________
ARGUED JANUARY 23, 2015 — DECIDED JULY 29, 2015
____________________
Before WOOD, Chief Judge, and KANNE and TINDER, Circuit
Judges.
KANNE, Circuit Judge. After losing his job at CentiMark
Corporation, Appellant James Turnell went to work for one
of its competitors. That created a problem, as Turnell’s em-
ployment contract contained restrictive covenants barring
him from competing with CentiMark or soliciting its cus-
tomers for two years after termination. The district court is-
sued a preliminary injunction partially enforcing the restric-
2 No. 14-2758
tive covenants, but only to the extent the court deemed nec-
essary to protect CentiMark’s legitimate interests. Turnell
challenges the preliminary injunction on appeal. We affirm.
I. BACKGROUND
CentiMark is a large, nationwide roofing company that
primarily sells and installs flat, single-ply roofing for com-
mercial and industrial customers. CentiMark hired Turnell
as a laborer in its Chicago office in 1978, when he was eight-
een years old. Over the course of thirty-five years with the
company, Turnell worked his way up the ranks. In 1988
CentiMark promoted him to Chicago District Operations
Manager and increased his salary from $45,000 to $50,000
per year. In return, CentiMark required him to sign an em-
ployment agreement (the “Agreement”).
Turnell’s new role would give him access to CentiMark’s
proprietary information and trade secrets, including sales
methods and materials, customer accounts, and pricing data.
So, in return for his promotion and salary increase, Turnell
agreed to a non-disclosure provision (§ 4.01 of the Agree-
ment) requiring him to maintain the confidentiality of
CentiMark’s information.
He also agreed to two restrictive covenants that Centi-
Mark regularly requires its management-level employees to
execute. The first is a non-compete clause (§ 4.05) prohibiting
Turnell from “engag[ing] … in any Competing Business”
during the period of his employment and for two years af-
terward in any of the “regions and/or divisions and/or terri-
tories” in which he “operated” as a CentiMark employee.
“Competing Business” includes any company that “sells or
No. 14-2758 3
attempts to sell any products or services” that are “the same
as, or similar to,” CentiMark’s.
The second restrictive covenant is a non-solicitation pro-
vision (§ 4.06) providing that Turnell “shall not … solicit the
trade of, or trade with,” any of CentiMark’s “customers or
suppliers, or prospective customers or suppliers” during his
employment and for two years afterward. “Prospective cus-
tomer” is defined broadly to include anyone “contacted by
[CentiMark] during the restrictive periods mentioned in this
Agreement.” But the Agreement does not prohibit all contact
with customers or prospective customers—only those that
“would constitute [Turnell’s] engaging in a competitive
business, as described in [the non-compete clause].”
After his promotion in 1988, Turnell’s ascent within the
company continued. He rose from operations manager to
branch manager to regional manager and, finally, to Senior
Vice President and Regional Manager for the Midwest Re-
gion, which encompasses western Michigan, northwest Indi-
ana, central and northern Illinois, Wisconsin, Minnesota, and
North and South Dakota. This region is one of CentiMark’s
largest and most productive, generating over $25 million in
annual revenue. Turnell was responsible for all regional sales
(including pricing, marketing, and customer relationships)
and operations (including staffing, personnel, and financial
performance). He had regular contact with customers, re-
viewed all major proposals, and had access to a password-
protected intranet portal containing information on pro-
posals, leads, quotes, financial performance, and other data.
He also participated in monthly conference calls with senior
executives on company-wide financial projections and strat-
egy. As regional manager, Turnell earned over $250,000 per
4 No. 14-2758
year in base salary and bonuses; in addition, CentiMark
compensated him with shares in the company worth more
than $3 million.
The relationship between Turnell and CentiMark came to
an end when the company fired him on January 8, 2013. The
reason, according to CentiMark, is that Turnell had misap-
propriated company resources and covered up fraudulent
billing by Vacuum Resources, a subcontracting company
owned by his wife. According to Turnell, this was a pretext;
the real reason for his termination had to do with his age, his
health (he has diabetes and high blood pressure), and his
high level of compensation.
Within a week after being fired, Turnell interviewed with
Windward Roofing and Construction, Inc., a smaller, more
local roofing company in Chicago. Commercial roofing ac-
counts for about half of Windward’s business and makes it a
competitor of CentiMark. But Windward also does other
work that CentiMark does not, such as shingled residential
roofing and masonry. CentiMark caught wind of Turnell’s
discussions with Windward and demanded that he cut them
off. Turnell testified that he was aware of his contractual ob-
ligations but did not care whether he was competing with
CentiMark because he “needed a job.” Turnell made little
effort to find a job outside commercial roofing.
Instead, he accepted an offer from Windward and began
selling commercial roofing for his new employer on or about
March 1, 2013. He was hired not to service existing accounts
but to develop new business. To that end, Turnell contacted
numerous customers or former customers of CentiMark,
some of whom he had personally worked with during his
tenure there. He sold services to at least one of those cus-
No. 14-2758 5
tomers. And he submitted two bids in head-to-head compe-
tition with CentiMark, winning one of those jobs for Wind-
ward.
CentiMark demanded that Turnell stop working for its
competitor. After an unfruitful exchange of letters, the par-
ties took their dispute to court. Turnell and Windward sued
first, on March 11, 2013, seeking a declaration from the Cir-
cuit Court of Cook County, Illinois that the Agreement’s re-
strictive covenants were unenforceable. CentiMark removed
that lawsuit to the federal district court for the Northern Dis-
trict of Illinois on April 9. The following day, CentiMark filed
its own separate action in the Northern District of Illinois
against Turnell, Windward, and Vacuum Resources to en-
force the restrictive covenants and to obtain other relief. The
district court consolidated the two actions.
CentiMark moved for a preliminary injunction against
Turnell under Fed. R. Civ. P. 65. After expedited discovery
and an evidentiary hearing, the district court granted
CentiMark’s motion on July 10, 2014. But the court found
Turnell’s restrictive covenants too broad, so it enforced them
only to the extent it judged “reasonably necessary for the
protection of CentiMark.” The preliminary injunction reads:
James Turnell shall not sell, attempt to sell, or help
sell any products or services, or any combination
thereof, related to commercial roofing to any per-
son or entity who was a customer of Centimark
Corporation as of January 8, 2013 and who is locat-
ed in Illinois, Indiana, Michigan, Minnesota, North
Dakota, South Dakota, or Wisconsin.
The court provided that “[t]his injunction shall remain in ef-
fect until the earlier of a decision on the merits … or two
6 No. 14-2758
years from the date of this order.” The court counted from
the date of the order rather than the date of Turnell’s termi-
nation because Turnell’s breach tolled the running of the re-
strictive periods under the Agreement. Finally, the court re-
quired CentiMark to post a $250,000 bond.
The preliminary injunction is narrower than the contrac-
tual covenants in three respects. First, whereas Turnell’s non-
compete clause bans all competing business (i.e., sales of
products or services similar to CentiMark’s), the injunction
does not. It allows Turnell to remain in commercial roofing,
subject to restrictions on his ability to sell to CentiMark’s
customers.
Second, the injunction only forbids commercial roofing
sales to actual customers of CentiMark as of Turnell’s termi-
nation date. Unlike the non-solicitation provision, the injunc-
tion does not extend to prospective CentiMark customers or to
persons who were customers in the past.
Third, the injunction is geographically narrower. There is
no geographical limitation in the non-solicitation provision,
and the non-compete covers any region where Turnell “op-
erated” as a CentiMark employee. But the district court lim-
ited the injunction’s reach to the Midwest—the region where
Turnell primarily worked throughout his career and which
he managed at the time of his departure.
The district court rejected CentiMark’s request to enjoin
Turnell from working at Windward altogether. So long as he
abided by the terms of the preliminary injunction, he was
free to remain in his new job. The court also rejected Centi-
Mark’s separate claim that Turnell had violated the non-
disclosure provision, as there was no evidence of breach.
No. 14-2758 7
Nevertheless, Turnell took exception to the court’s order and
filed a timely notice of appeal.
We have subject matter jurisdiction based on diversity of
citizenship under 28 U.S.C. §§ 1441(a)-(b) and 1332. And alt-
hough this is an interlocutory appeal, we have authority to
decide it under 28 U.S.C. § 1292(a)(1).
II. ANALYSIS
Federal courts sitting in diversity “apply state substan-
tive law and federal procedural law” under the eponymous
Erie doctrine. Hanna v. Plumer, 380 U.S. 460, 465 (1965) (citing
Erie R.R. v. Tompkins, 304 U.S. 64 (1938)). The district court
here applied Pennsylvania law, pursuant to a choice-of-law
clause in the parties’ Agreement, to determine the enforcea-
bility of the restrictive covenants; and it looked to federal
law for the standard governing the availability of a prelimi-
nary injunction. Both parties agree with the first decision,
and neither party contests the second. (They simply do not
address the Erie issue). Choice-of-law arguments are normal-
ly waivable, see Vukadinovich v. McCarthy, 59 F.3d 58, 62 (7th
Cir. 1995), so we need not analyze these issues here; we will
instead follow the same course as the district court.
A preliminary injunction is an extraordinary equitable
remedy that is available only when the movant shows clear
need. Goodman v. Ill. Dep’t of Fin. and Prof’l Regulation, 430
F.3d 432, 437 (7th Cir. 2005). In our circuit, a district court
engages in a two-step analysis to decide whether such relief
is warranted. Girl Scouts of Manitou Council, Inc. v. Girl Scouts
of USA, Inc., 549 F.3d 1079, 1085-86 (7th Cir. 2008). In the first
phase, the party seeking a preliminary injunction must make
a threshold showing that: (1) absent preliminary injunctive
8 No. 14-2758
relief, he will suffer irreparable harm in the interim prior to a
final resolution; (2) there is no adequate remedy at law; and
(3) he has a reasonable likelihood of success on the merits. Id.
at 1086; see also Cooper v. Salazar, 196 F.3d 809, 813 (7th Cir.
1999).
If the movant makes the required threshold showing,
then the court proceeds to the second phase, in which it con-
siders: (4) the irreparable harm the moving party will endure
if the preliminary injunction is wrongfully denied versus the
irreparable harm to the nonmoving party if it is wrongfully
granted; and (5) the effects, if any, that the grant or denial of
the preliminary injunction would have on nonparties (the
“public interest”). Girl Scouts, 549 F.3d at 1086; Cooper, 196
F.3d at 813; Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d
380, 386-88 (7th Cir. 1984). The court weighs the balance of
potential harms on a “sliding scale” against the movant’s
likelihood of success: the more likely he is to win, the less
the balance of harms must weigh in his favor; the less likely
he is to win, the more it must weigh in his favor. Girl Scouts,
549 F.3d at 1086; Roland, 749 F.2d at 387-88.
On appeal, we review the issuance of a preliminary in-
junction for abuse of discretion. Cooper, 196 F.3d at 813.
“[B]ecause preliminary injunctions are an unusual remedy
requiring the application of a definite set of standards, we
subject them to ‘effective, and not merely perfunctory, appel-
late review.’” Id. (quoting Roland, 749 F.2d at 389). A district
court may abuse its discretion by making a clear factual er-
ror or a mistake of law. Id. But we give substantial deference
to the court’s weighing of evidence and balancing of the var-
ious equitable factors. Id.; Girl Scouts, 549 F.3d at 1086.
No. 14-2758 9
Only two of the preliminary injunction factors are at is-
sue in this appeal: CentiMark’s likelihood of prevailing in its
effort to enforce the restrictive covenants (factor 3), and the
balance of potential harms to the parties (factor 4).
A. CentiMark’s Likelihood of Success on the Merits
The district court concluded that CentiMark would likely
prevail in its action to enforce Turnell‘s non-compete and
non-solicitation covenants, but only to the extent reasonably
necessary for CentiMark’s protection. Pennsylvania law dis-
favors restrictive covenants because it views them as re-
straints on trade and impediments to an employee’s ability
to earn a living. Hess v. Gebhard & Co., 808 A.2d 912, 917 (Pa.
2002). But Pennsylvania also recognizes restrictive covenants
as “important business tools.” See id. at 917-18; cf. Outsource
Int’l, Inc. v. Barton, 192 F.3d 662, 669-70 (7th Cir. 1999) (Pos-
ner, J., dissenting) (discussing the economic benefits of cove-
nants not to compete). Pennsylvania courts will therefore en-
force a restrictive covenant so long as it is “incident to an
employment relationship between the parties; the re-
strictions imposed by the covenant are reasonably necessary
for the protection of the employer; and the restrictions im-
posed are reasonably limited in duration and geographic ex-
tent.” Hess, 808 A.2d at 917.
If the covenant’s restrictions are too broad, “a court of
equity may grant enforcement limited to those portions of
the restrictions that are reasonably necessary for the protec-
tion of the employer.” Id. at 920. Partial enforcement in these
circumstances is sometimes called “blue penciling” (appar-
ently a throwback to the days when lawyers edited written
work with a blue pencil). The Supreme Court of Pennsylva-
nia has “repeatedly held” that courts have discretion to use
10 No. 14-2758
the blue pencil. Id. “The reason for this policy is a refusal to
allow the employee to profit, at the expense of his former
employer, from his wrongful and inequitable conduct.” Sidco
Paper Co. v. Aaron, 351 A.2d 250, 255 (Pa. 1976).
There is a limit, however, to Pennsylvania courts’ will-
ingness to reform a restrictive covenant. If the restrictions are
so “gratuitous[ly]” overbroad that they “indicate[] an intent
to oppress the employee and/or to foster a monopoly,” a
court of equity may refuse to enforce the covenant at all. Id.
at 257. The leading case is Reading Aviation Service, Inc. v. Ber-
tolet, 311 A.2d 628 (Pa. 1973). Bertolet left his job at Reading
Aviation and went to work for a competitor located 600 feet
away from his former employer. He was subject to a non-
compete agreement lacking both a temporal limitation and a
geographical one—even though Reading Aviation operated
entirely within Pennsylvania. Id. at 629. The lower court re-
fused to enforce the non-compete even in part. Id. at 630. The
Pennsylvania Supreme Court affirmed because it found the
“open-ended restrictions” to be “far greater than … reasona-
bly necessary” and “unconscionable.” Id.
The court in Reading was concerned about the “possible
adverse consequences” of partially enforcing an oppressive
covenant: such enforcement tends to encourage employers
with superior bargaining power to overreach. Id. at 630-31.
That is a valid concern. If such a practice became wide-
spread, it would chill lawful activity. Although judges could
pare down the restrictions in the cases that make it to court,
in the many cases that never go to court, or where the em-
ployee is deterred from even trying to leave, the employer
would unfairly benefit from “the in terrorem effects of the
oppressive and overly broad covenants.” Tradesman Int’l, Inc.
No. 14-2758 11
v. Black, 724 F.3d 1004, 1018 (7th Cir. 2013) (Hamilton, J., con-
curring).
Not every overbroad covenant is oppressive, though. In
many cases, overbreadth has a more benign cause (such as
poor drafting), and to some extent overbreadth is unavoida-
ble given the imprecision of our language. Thus, “absent bad
faith, Pennsylvania courts do attempt to blue pencil cove-
nants before refusing enforcement altogether.” Victaulic Co. v.
Tieman, 499 F.3d 227, 238 n.7 (3d Cir. 2007); see also Sidco, 351
A.2d at 260 (Pomeroy, J., concurring) (characterizing “strik-
ing down such covenants in their entirety” as an “extraordi-
nary sanction”).
In the case before us, the district court wielded the blue
pencil. In our view, the court could have narrowed Turnell’s
restrictive covenants even further than it did. The prelimi-
nary injunction’s prohibition on certain sales of “commercial
roofing” is too broad, as CentiMark sells a more specific of-
fering—commercial, flat, single-ply roofing. And the injunc-
tion need not cover all of Michigan, Indiana, and Illinois be-
cause only portions of those states were within the region
that Turnell managed at CentiMark. 1
But Turnell does not challenge the scope of the
preliminary injunction on appeal. Instead, he argues that the
district court should not have enforced the restrictive cove-
1 The district court should take these issues into account when and if it
issues a permanent injunction following a final determination on the
merits, and the court may also wish to modify the preliminary injunction
in the interim. CentiMark’s counsel stated at oral argument that his client
has no objection to appropriately modifying the types of roofing and the
geographic area covered by the injunction.
12 No. 14-2758
nants at all—even in blue-penciled form—because, like the
covenants in Reading, they are overbroad and oppressive.
We disagree. The covenants are incident to an employ-
ment relationship, and two years post-employment is a rea-
sonable duration. See CentiMark Corp. v. Vitek, No. 08 C 7323,
2010 WL 5490662, at *7 (N.D. Ill. Dec. 29, 2010). The cove-
nants further CentiMark’s legitimate interest in preventing a
former regional manager from using its customer relation-
ships and proprietary business information, including its
pricing models, for a competitor’s benefit. See Sidco, 351 A.2d
at 254, 257 (holding that “Sidco clearly has a protectible in-
terest in customer goodwill” and “properly used a restrictive
covenant to protect its customer relationships”); see also Bim-
bo Bakeries USA, Inc. v. Botticella, 613 F.3d 102, 112-14 (3d Cir.
2010) (noting that Pennsylvania law protects non-technical
trade secrets); CertainTeed Corp. v. Williams, 481 F.3d 528, 530
(7th Cir. 2007) (recognizing that under Pennsylvania law
employers have a legitimate interest in “[k]eeping a business
executive with a wealth of information from taking an
equivalent position at a rival”). And while the district court
found the scope of prohibited activity and the geographic
reach of the restrictions broader than necessary, the cove-
nants are not gratuitously or oppressively overbroad.
1. The Non-Compete Covenant
Turnell’s non-compete clause prohibits him from engag-
ing in competing business, defined as selling products or
services the same as or “similar” to CentiMark’s. This lan-
guage might benefit from more precision (what counts as
similar?) or a narrower focus (similar products do not neces-
sarily compete, see, e.g., Am. Med. Sys., Inc. v. Med. Eng’g
Corp., 794 F. Supp. 1370, 1388-90 (E.D. Wisc. 1992) (finding
No. 14-2758 13
that two different medical devices for treating impotence
were not serious competitors), rev’d in part on other grounds, 6
F.3d 1523 (Fed. Cir. 1993)). But that is beside the point. The
provision reflects a good-faith attempt to tie the scope of the
prohibitions to CentiMark’s protectable interests.
Pennsylvania courts and others applying Pennsylvania
law have enforced comparable restrictions, sometimes in
their entirety, e.g., CertainTeed, 481 F.3d at 529 (involving re-
striction on developing products “competitive with or simi-
lar to” the employer’s products); Vitek, 2010 WL 5490662, at
*2 (enforcing covenants almost identical to Turnell’s), and
sometimes with recourse to the blue pencil, e.g., CertainTeed
Ceilings Corp. v. Aiken, No. 14-cv-3925, 2014 U.S. Dist. LEXIS
152446, at *8 (E.D. Pa. Oct. 27, 2014) (involving restriction on
products “competitive with or similar to” the employer’s).
Nor does the non-compete cross the line with respect to
its geographic reach. It applies only in the regions where
Turnell “operated” as a CentiMark employee. This language
is vague, at least at the margins: if Turnell placed a telephone
call from Chicago to a customer in California, for example,
does that mean he “operated” in California? What if he trav-
eled there a few times on business? The answer is unclear.
Turnell claims he “worked in” twenty-four different states
during his thirty-five years at the company, but CentiMark
agrees only that he operated in the seven states covered by
the injunction. Their dispute illustrates the vagueness of the
term “operate.” Perhaps the parties should have defined it
more precisely. But they could not have foreseen in 1988
what positions Turnell would later hold or where he would
work. To some extent, the geographic language had to be
14 No. 14-2758
open-ended given the national scope of CentiMark’s busi-
ness.
None of this suggests deliberate or oppressive overreach-
ing. Where the employer’s business was sufficiently wide-
spread, courts have enforced restrictive covenants with even
greater geographic reach than Turnell’s. Sometimes they
have done so without even modifying the covenants, see, e.g.,
Mohr v. Bank of NY Mellon Corp., 393 F. App’x 639, 644-45
(11th Cir. 2010) (per curiam) (applying Georgia law); Quaker
Chem. Corp. v. Varga, 509 F. Supp. 2d 469, 476-77 (E.D. Pa.
2007); other times they have blue penciled first, see, e.g., Cer-
tainTeed Ceilings, 2014 U.S. Dist. LEXIS 152446, at *31-36 (re-
stricting enforcement to the employee’s former sales territo-
ry).
Turnell invokes Reading, but the employer in that case
was a one-state company trying to enforce a restrictive cove-
nant with no geographic limit. 311 A.2d at 629. There is no
similar mismatch here. The other case on which Turnell re-
lies, Fres-Co System USA, Inc. v. Bodell, is distinguishable on
similar grounds. No. Civ.A. 05-3349, 2005 WL 3071755 (E.D.
Pa. Nov. 15, 2005) (applying Pennsylvania law). The employ-
ee in Fres-Co sold coffee packaging in the southeastern Unit-
ed States and the Caribbean, but his non-compete forbade
him from selling packaging material in at least four indus-
tries having little to do with coffee, and on at least three con-
tinents. Id. at *4, 7. There were also other indicia of oppres-
sive intent in Fres-Co, including a lack of consideration for
the restrictive covenant, and a requirement that all employ-
ees, no matter how junior, agree to the same restrictions. Id.
at *5. Turnell’s non-compete, by contrast, reflects an attempt
to tailor his restrictions to the products and services he sold
No. 14-2758 15
(commercial roofing) and the areas where he sold them,
leaving him free to work in other product and geographical
markets.
2. The Non-Solicitation Covenant
Turnell’s non-solicitation provision presents a closer call.
It prohibits marketing not only to CentiMark’s actual cus-
tomers but also to any “prospective customers” it has “con-
tacted” during the restrictive periods. This language is too
vague (what kinds of contact count?), too broad (what rela-
tionship can CentiMark legitimately seek to safeguard with a
prospect it merely called a few years ago?), and impractica-
ble (Turnell cannot know everyone his former employer con-
tacted)—which is why the district court excised it.
The non-solicitation provision also contains no geograph-
ic limitation. It applies wherever CentiMark’s customers or
prospective customers happen to be located. That reaches
too widely. Although Turnell was a management-level em-
ployee with access to customer data, proposals, and custom-
ers themselves, he did not have relationships with all cus-
tomers across the country. While the parties could not easily
have predicted in 1988 where Turnell would operate, they
still could have written a narrower restriction—for example,
by limiting it to customers contacted by Turnell himself. Cf.
Mohr, 393 F. App’x at 642.
But there is no reason to suspect any more sinister cause
of these shortcomings than poor drafting. It is reasonable for
an employer to seek protection for budding customer rela-
tionships as well as established ones. And it is difficult to de-
fine in advance which relationships will warrant protection.
(You cannot simply list the customers, for example, because
16 No. 14-2758
the list will change over time.) CentiMark invested time, ex-
pertise, and money in developing its customers and poten-
tial customers. Turnell was directly involved in those efforts;
for instance, he reviewed significant proposals before they
went out the door. That is reason enough for the restrictions
on solicitation here. There is no evidence that CentiMark was
actually trying to oppress Turnell or to somehow foster a
monopoly. Cf. Outsource Int’l, 192 F.2d at 670 (Posner, J., dis-
senting) (noting that a non-compete in in an employment
contract is unlikely to impair the vitality of competition).
Other courts have enforced similar agreements barring
solicitation of prospective customers. See, e.g., Mohr, 393 F.
App’x at 642, 645-46 (reversing district court’s denial of pre-
liminary injunction and enforcing covenant under Georgia
law); Diodato v. Wells Fargo Ins. Servs., USA, Inc., 44 F. Supp.
3d 541, 549, 570 (M.D. Pa. 2014) (blue penciling under Penn-
sylvania law); Pulse Techs., Inc. v. Dodrill, No. CV-07-65-ST,
2007 U.S. Dist. LEXIS 18520, at *6-7, 20-23 (D. Or. Mar. 14,
2007) (same).
We conclude that Turnell’s restrictive covenants are over-
broad but not oppressively so. The district court therefore
properly exercised its equitable discretion under Pennsylva-
nia law to blue pencil the restrictions. And the court proper-
ly concluded that CentiMark has a strong chance of enforc-
ing them, as narrowed, in a final resolution of this action.
B. The Balance of Harms
The district court found that “an injunction would weigh
more heavily on Turnell than the status quo would [on] Cen-
timark.” Nevertheless, using the sliding scale approach, see
Girl Scouts, 549 F.3d at 1086, the court concluded that Centi-
No. 14-2758 17
Mark’s strong likelihood of success outweighed the harm to
Turnell.
We agree. Both parties claim that they will suffer mone-
tary harm: lost income in Turnell’s case, and lost customer
relationships and proprietary information in CentiMark’s.
Neither party has quantified those harms. But in neither case
do they seem likely to be crippling. Even under the prelimi-
nary injunction, Turnell is still able to work: he can remain at
Windward and sell commercial roofing, just not to Centi-
Mark customers in seven states; or he can sell other types of
roofing without restriction. As a successful salesperson, he
may also be able to work in another field. In short, the in-
junction does not prevent him from earning a living. On the
other hand, CentiMark has no proof that it has lost custom-
ers or suffered any economic loss because of Turnell’s
breaches. The harms are pretty evenly balanced, perhaps
tipping in Turnell’s favor, as the district court thought.
But that is not the end of the analysis. The kind of harm
we are concerned about when deciding whether to issue a
preliminary injunction is not harm tout court but rather irrep-
arable harm. See Roland, 749 F.3d at 387. Turnell’s harm seems
largely reparable. If he prevails in a trial on the merits, it
should be possible to quantify his losses and compensate
him fully with damages. Moreover, the bond posted by
CentiMark ensures that any damages would be recoverable
(at least up to $250,000). See FED. R. CIV. P. 65(c). Turnell has
not explained why these remedies would be insufficient.
There is no reason to think the preliminary injunction will
consign him to poverty or bankrupt him: he earned a high
salary at CentiMark, has at least $3 million in assets, and has
income from his wife’s company, in addition to what he can
18 No. 14-2758
earn on his own. Cf. Roland, 749 F.3d at 386 (discussing vari-
ous scenarios when damages after-the-fact would be inade-
quate).
The potential damage to CentiMark, on the other hand, is
a canonical form of irreparable harm. The injuries that flow
from the violation of a non-compete are difficult to prove
and quantify. See CertainTeed, 481 F.3d at 529 (“[I]t may be
very difficult to show that the ex-employee has used confi-
dential information.”); John G. Bryant Co. v. Sling Testing and
Repair, Inc., 369 A.2d 1164, 1167 (Pa. 1977) (characterizing
such damage as “incalculable”). That is what makes restric-
tive covenants prime candidates for injunctive relief. Tur-
nell’s breaches, if left unchecked, might cause little harm to
CentiMark, or they might cause great harm. But either way,
the magnitude and even the existence of the injury will be
difficult to discern. Injunctive relief is therefore the best, and
probably the only, adequate remedy.
On the whole, then, we think the balance of harms favors
Turnell, if at all, only slightly. It is not enough to overcome
CentiMark’s likelihood of success on the merits.
III. CONCLUSION
The district court’s order granting a preliminary injunc-
tion in CentiMark’s favor is AFFIRMED.