United States District Court, W.D. Michigan, Southern Division
ORDER GRANTING TEMPORARY RESTRAINING ORDER
L. Maloney United States District Judge
Two Men and a Truck (TMT) filed a verified complaint and an
ex parte motion for a temporary restraining order against a
former franchisee. TMT requests the Court issue a temporary
restraining order to enjoin Defendants from violating a
non-compete agreement contained within the franchise
agreement. Having reviewed the complaint, motion and
exhibits, the Court GRANTS the motion for a
temporary restraining order (ECF No. 4) against Defendants
Gerstner Investments and Donald Gerstner.
granting or denying a motion for a temporary restraining
order fall within the discretion of a district court. See
Ohio Republican Party v. Brunner, 543 F.3d 357, 361 (6th
Cir. 2008) (quoting Northeast Ohio Coalitionfor
HomelessandService EmployeesInt=l Union, Local 1199 v.
Blackwell, 467 F.3d 999, 1009 (6th Cir. 2006)). Under
Rule 65, a court may issue a temporary restraining order,
without notice to the adverse party, only if two conditions
are met. Fed.R.Civ.P. 65(b)(1). First, the moving party must
establish specific facts through an affidavit or a verified
complaint showing that an immediate and irreparable injury
will result to the moving party before the adverse party can
be heard in opposition to the motion. Fed.R.Civ.P.
65(b)(1)(A). Second, the counsel for the moving party must
certify in writing any efforts made to give notice and the
reasons why notice should not be required. Fed.R.Civ.P.
65(b)(1)(B). In addition, the court must consider each of
four factors: (1) whether the moving party demonstrates a
strong likelihood of success on the merits; (2) whether the
moving party would suffer irreparable injury without the
order; (3) whether the order would cause substantial harm to
others; and (4) whether the public interest would be served
by the order. Ohio Republican Party, 543 F.3d at 361
(quoting Northeast Ohio Coalition). The four factors
are not prerequisites that must be met, but are interrelated
concerns that must be balanced together. See Northeast
Ohio Coalition, 467 F.3d at 1009.
Donald Gerstner and Defendant Gerstner Investments (GI) have
entered into two franchise agreements with TMT. The Kansas
Franchise was purchased in December 2012 by Gerstner
Investments. (ECF No. 1-2 Page ID.61-62.) Donald Gerstner
signed the agreement as president of GI and also in his own
capacity. (Id. Page ID.62.) The Missouri Franchise
was purchased in December 2016 by GI. (ECF No. 1-3 Page
ID.154-55.) Donald Gerstner signed the agreement as president
of GI and also in his own capacity. (Id. Page
ID.155.) On January 23, 2018, TMT sent a Notice of
Termination letter concerning the Kansas Franchise to all
three defendants. (ECF No. 1-5.) Defendants had to cure
various breaches of the agreement by February 2, 2018, or
both franchises would be terminated. On February 5, 2018, in
a letter to all three defendants, TMT invoked its right to
terminate both franchises. (ECF No. 1-8.)
relies on several provisions in the franchise agreements.
Section VIII of the agreements is the Confidentiality and
Non-Competition portion and imposes certain requirements on
the franchisee after termination of the agreement.
Specifically, TMT retains the ownership of all confidential
information and the franchisee agrees not to use the
confidential information in any other business or capacity.
(ECF No. 1-2 PageID.49; ECF No. 1-3 PageID.141.) The
franchisee also agrees to keep the information confidential.
(ECF No. 1-2 Page ID.49; ECF No. 1-2 PageID.141.) The
agreement for the Kansas Franchise also contains a provision
prohibiting competition for a two-year term after the
agreement expires. (ECF No. 1-2 PageID.50-51.) The agreement
for the Missouri Franchise contains a three-year term. ECF
No. 1-3 PageID.142.) The prohibition extends to the
franchisees and its principals, officers, shareholders,
members, agents, spouses of any of them, and their
affiliates. (ECF No. 1-2 PageID.51; ECF No. 1-3 Page ID.142.)
alleges that Gerstner and Gerstner Investments have violated
the terms of the franchise agreements. One or more of the
Defendants have started a new company called Moving Day
Moving. Someone with Defendants has contacted customers to
inform them of the name change, assured the customers that
the same services would be provided, and that the scheduled
move would still occur. (ECF No. 1-9 Woodland Affidavit.) TMT
has also submitted screenshots of Moving Day Moving's
website. (ECF No. 1-10.) Finally, TMT alleges one or more
Defendants has been using TMT's "system to book and
divert moves for customers." (ECF No. 5 Compl. ¶ 20
entitled to a temporary restraining order against Donald
Gerstner and Gerstner Investments. First, TMT has complied
with the requirements outlined in Rule 65. TMT filed a
verified complaint. TMT has been in contact with Defendants
in December 2017 and in January and February 2018 about
termination of the franchise agreements, which included
reminders about relevant post-termination obligations.
Because Defendants are currently competing with TMT,
Defendants are in violation of the agreements. And, both
agreement contain a clause that entitle TMT to an injunction
under these circumstances. (ECF No. 1-2 PageID.52-53; ECF No.
four factors weigh in favor of granting a temporary
restraining order. TMT has established a relationship between
its former franchisee and Moving Day Movers. The connection
constitutes a violation of the terms of franchise agreements.
The non-compete provisions are likely enforceable under
Michigan law. Therefore, TMT has demonstrated a likelihood of
success on the merits. By signing the agreements, the
franchisee agreed that violating the post-termination
prohibition on competition would constitute irreparable harm.
TMT has also established that there exists a likelihood that
its former franchisee is using the confidential information
provided by TMT, among other things.
other two factors do not weigh heavily in favor of either
party. Shutting down Moving Day Movers would harm that
company, but allowing it to continue operating harms TMT as a
competitor. The individuals most affected by an injunction
are those customers who have contracted for moving services
with the former franchisee or with Moving Day Movers. The
public has an interest in fair competition and in having
businesses uphold their contractual obligations.
the Court issues a Temporary Restraining Order on Friday,
February 09, 2018.
Defendant Gerstner and Defendant Gerstner Investments, their
principals, officers, shareholders, members, agents, spouses