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Hair Club For Men, LLC v. Ehson

United States District Court, E.D. Virginia, Alexandria Division

May 6, 2016

Hair Club for Men, LLC, Plaintiff,
Lailuma Ehson and Illusion Day Spa, LLC, Defendants.


Liam O'Grady United States District Judge

This matter comes before the Court on Plaintiff Hair Club for Men's ("Hair Club") Motion for Preliminary Injunction. Dkt. No. 3. Plaintiff asks this Court generally to prevent Defendants from engaging in the business of hair replacement in any capacity within a radius of twenty miles of any Hair Club center, soliciting or dealing with Hair Club customers, and disclosing or distributing any Hair Club trade secrets. For the reasons outlined below, the Court finds good cause to DENY the Motion.

I. Background

Hair Club is in the business of hair replacement and hair therapies. Hair Club employed Defendant Lailuma Ehson in its Tysons Corner location from 2011 until July 24, 2015, when Ehson voluntarily resigned. Hair Club asserts that during her time at Hair Club, Ehson learned detailed and unique hair replacement methods that were developed by Hair Club. In addition, Ehson had access to Hair Club's customer lists, customer information, and pricing strategies.

When Ehson was hired, she signed a "confidentiality, non-solicitation and non-compete agreement." Through this agreement, Ehson agreed that she would not compete with Hair Club by engaging in the hair replacement business in any capacity within a radius of twenty miles from any Hair Club center for a period of two years from the termination of her employment, "whether by discharge, resignation or for any other reason." Ehson also agreed not to solicit any hair replacement business from Hair Club customers for two years after the termination of her employment. Ehson further agreed not to use or disclose, during or after her employment, any of Hair Club's confidential information including customer lists, price lists, lists of employees, and customer information. Finally, Ehson agreed that after leaving the employ of Hair Club she would not publicize, or allow any business she is associated with, to publicize the fact that she is a former Hair Club employee.

In October of 2014, while still working at Hair Club in Tysons Corner, Ehson organized and opened Defendant Illusion Day Spa ("Illusion"), which is located approximately 15.5 miles from Hair Club's Tysons Corner location. Hair Club alleges Ehson began advertising and performing hair replacement services at Illusion in November of 2014. Hair Club also alleges that Ehson solicited its customers for her new business while she was still employed at Hair Club.

Based on these facts, Hair Club filed the Complaint and the Motion for Preliminary Injunction in this Court on March 7, 2016. Hair Club brings five causes of action against the Defendants:

• Count I: breach of contract (against Ehson);
• Count II: misappropriation of trade secrets and confidential information (against Ehson and Illusion);
• Count III: wrongful interference with contract and prospective business advantage (against Ehson and Illusion);
• Count IV: tortious interference with contractual relations (against Illusion); and
• Count V: unjust enrichment (against Ehson and Illusion).

II. Legal Standard

In order to succeed on a request for preliminary injunction, the movant "must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest." Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20 (2008); see also Centro Tepeyac v. Montgomery Cnty., 722 F.3d 184, 188 (4th Cir. 2013). A preliminary injunction is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter, 555 U.S. at 22. "The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." United States v. South Carolina, 720 F.3d 518, 524 (4th Cir. 2013) (quoting Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981)) (internal quotation marks omitted).

III. Discussion

A. Likelihood of Success on the Merits

Hair Club must first establish that it is likely to succeed on the merits of its claims. This Court will address the likelihood of success for each of the five Counts Hair Club has asserted in turn.

1. Count I: Breach of Contract

Hair Club first asserts that Ehson violated the non-competition and non-solicitation clauses of her contract. The elements of a breach of contract action under Virginia law are: "(1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant's violation or breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation." Filak v. George, 267 Va. 612, 619, 594 S.E.2d 610, 614 (2004). Defendants challenge the first element-whether the contract at ...

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