Opinion
21-CV-487 (JMF)
2021-07-22
WILLIS RE INC., et al., Plaintiffs, v. Paul HERRIOTT, Defendant.
George Charles Morrison, White and Williams LLP, New York, NY, Scott H. Casher, White and Williams LLP, Pleasantville, NY, for Plaintiffs. Christine A. Amalfe, Kevin William Weber, Genna Autumn Conti, Gibbons P.C., Newark, NJ, Mark Stephen Sullivan, Joshua Nicholas Colangelo-Bryan, Dorsey & Whitney LLP, New York, NY, Bryant D. Tchida, John P. Boyle, Megan Renslow, Moss & Barnett, P.A., Payton E. George, Dorsey & Whitney LLP, Minneapolis, MN, for Defendant.
George Charles Morrison, White and Williams LLP, New York, NY, Scott H. Casher, White and Williams LLP, Pleasantville, NY, for Plaintiffs.
Christine A. Amalfe, Kevin William Weber, Genna Autumn Conti, Gibbons P.C., Newark, NJ, Mark Stephen Sullivan, Joshua Nicholas Colangelo-Bryan, Dorsey & Whitney LLP, New York, NY, Bryant D. Tchida, John P. Boyle, Megan Renslow, Moss & Barnett, P.A., Payton E. George, Dorsey & Whitney LLP, Minneapolis, MN, for Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
JESSE M. FURMAN, United States District Judge: In January 2021, Defendant Paul Herriott, a reinsurance broker, left his position at Willis Re Inc. ("Willis Re") for a competitor, TigerRisk Partners ("TigerRisk"). Soon thereafter, he began soliciting Willis Re clients. Perhaps not surprisingly, litigation followed, first in the form of this lawsuit, brought by Willis Re and Willis Towers Watson Public Limited Company ("WTW"), Willis Re's parent company, against Herriott and then, two days later, in the form of a lawsuit brought by Herriott and TigerRisk against Willis Re in California. On February 9, 2021, the Court entered a temporary restraining order ("TRO") enjoining Herriott from pursuing the California lawsuit and soliciting or servicing "Relevant Clients" on the ground that these actions violated agreements he had entered with Willis Re. Thereafter, the Court held two evidentiary hearings, one with respect to a motion to hold Herriott in contempt for violating the TRO and one with respect to a motion for a preliminary injunction. For the reasons that follow, the Court concludes, based on the record developed at these hearings, that Plaintiffs Willis Re and WTW are entitled to preliminary injunctive relief relating to both the California action and the solicitation or servicing of "Relevant Clients." Significantly, however, the Court concludes that the term "Relevant Clients" is substantially narrower than Plaintiffs assert.
FINDINGS OF FACT
Pursuant to Rule 52(a)(2) of the Federal Rules of Civil Procedure, the Court makes the following findings of fact based on the testimony and exhibits at the hearing.
A. Background
Willis Re — an indirect subsidiary of WTW, see ECF No. 64 ("Bradshaw Contempt Aff."), ¶ 1 n.1 — is a reinsurance broker that, among other things, secures treaty casualty reinsurance for its clients. Treaty casualty reinsurance "is coverage purchased by primary casualty insurers to cover a block of risks held in the primary casualty insurer's book of business. The insurance company pays an annual premium, and Willis Re, as the broker, receives a percentage of that premium." Id. ¶ 3. Willis Re currently has approximately 150 individual reinsurance brokers. ECF No. 125, ex. A ("Stip."), ¶ 79. Herriott was employed as a reinsurance broker by Willis Re from May 2, 2003, to January 21, 2021, during which time he was based in the company's San Francisco office. Id. ¶ 1.
At all relevant times, Herriott's title was Executive Vice President and National Sales Director. Id. ¶ 3. He was also a member of Willis Re's North American Executive Committee, which establishes and "implements sales and client management strategies across North America." Id. ¶ 4. As Sales Director for Willis Re in North America, Herriott "managed Willis Re's sales software rollout and usage across North American branches of the online client relationship management tool that Willis Re uses for client development and ongoing care and management of clients"; managed Willis Re's sales support staffing and products accessed by all North American branches across Willis Re; managed Willis Re's sales conferences; and tracked and reported on Willis Re's sales pipeline across all branch offices in North America to the Willis Re Executive Committee. Id. ¶¶ 6-8. His duties also included "reinsurance brokerage services for Willis Re clients in its healthcare and professional liability segments, which includes, among other things, placing reinsurance requested by insurance clients with reinsurance companies on the best terms available, advising clients on how to structure their reinsurance coverage, marketing clients’ reinsurance programs to reinsurers, managing clients’ reinsurance programs, and helping clients process reinsurance claims." Id. ¶ 5.
Herriott was also a member of Willis Re's "[h]ealthcare [s]egment," which "serve[s] as [a] clearinghouse[ ] of ideas and insight for brokers whose clients or divisions of clients’ line(s) of business fit within" the healthcare space. ECF No. 77 ("Strenge Contempt Aff."), ¶ 4. Notably, however, any Willis Re broker can participate in any segment of the business; neither the healthcare segment nor any other segment has formal membership structures. Id. The healthcare segment held regular internal meetings "focused on market developments and to brainstorm how certain challenges might be addressed," id. ¶ 6, which, after the COVID-19 pandemic started in March 2020, typically took the form of weekly calls, see Apr. 15, 2021 Tr. 94-95 (testimony of Herriott). Scott Strenge, then the leader of the healthcare segment, typically led the meetings, but he would ask others to lead when he was unable to attend; on a handful of occasions in 2020, he tapped Herriott to do so. Id. ¶¶ 2, 6; Apr. 15, 2021 Tr. 94-95 (testimony of Herriott). Over the course of 2020, all or nearly all of the health care segment clients were discussed at some point. Apr. 15, 2021 Tr. 34 (testimony of Herriott); id. at 119-22 (testimony of Scott Strenge) ("It is fair to say that the majority of the clients would have come up during discussions."). Total annual revenue in 2020 for the healthcare segment exceeded $15 million. Stip. ¶ 15.
"Apr. 15, 2021 Tr." and "Apr. 19, 2021 Tr." refer to the transcripts of the contempt hearing conducted on April 15 and 19, 2021, filed at ECF Nos. 130 and 132, respectively; "Tr." refers to the transcript of the preliminary injunction hearing conducted on May 19 and 20, 2021, filed at ECF Nos. 138 and 140; "PX_" refers to a Plaintiffs’ Exhibit; and "DX_" refers to a Defendant's Exhibit.
The individual broker who is responsible for a client account will, among other things, negotiate the terms and conditions of the client's reinsurance coverage with the reinsurers operating in the broker market. ECF No. 76 ("First Herriott Contempt Aff."), ¶ 4. After placing the client's reinsurance, the broker acts as a conduit for communications relating to the reinsurance contracts between the ceding company and the reinsurer, including in connection with premiums and loss payments. Id. At Willis Re, the broker with primary responsibility for a given account was often described as the "client advocate." See Apr. 15, 2021 Tr. 171 (testimony of Neil Morrell). During the final year of his employment at Willis Re, Herriott served as client advocate for the following Willis Re clients: Minnesota Lawyers Mutual ("MLM"), Cooperative of American Physicians/Mutual Protection Trust ("CAP"), California Health Insurance Company ("CHI"), NORCAL, Berkley Design Professional ("Berkley Design"), Berkley Healthcare, and Hawaii Association of Physicians for Indemnification ("HAPI"). Stip. ¶¶ 26, 34, 41, 63, 70, 74; Tr. 105 (testimony of Jim Bradshaw).
Berkley Design and Berkley Healthcare are both subsidiaries of W.R. Berkley. See Tr. 31 (testimony of Paul Herriott).
B. The Parties’ Agreements
The present dispute implicates several agreements between Herriott and Willis Re (or WTW). These include an agreement Herriott signed upon commencing his employment with Willis Re in 2003; stock incentive awards and attached restrictive covenant agreements entered into in 2018, 2019, and 2020; and additional incentive agreements entered into in July and December of 2020. The Court will summarize the salient provisions of each in turn.
First, on May 2, 2003, when Herriott began working at Willis Re in May 2003, he and Willis Re entered into an Employment Agreement. ECF No. 31 ("Herriott TRO Decl."), ¶ 8; ECF No. 31-1 ("Employment Agreement"). To the extent relevant here, the Employment Agreement provided that Willis Re "wishe[d] to employ" Herriott "at its San Francisco, California location." Employment Agreement 1. It further provided that it was "the entire agreement" between Willis Re and Herriott; that it could be "modified only by a written instrument signed by both parties"; and that it was to "be governed by California law without giving effect to its conflicts of law principles." Employment Agreement § 8.
Next, in April 2018, Herriott and WTW entered into a Phantom Stock Unit Agreement ("PSUA") — "an award of extraordinary compensation offered only to select employees." Bradshaw Aff. ¶ 17; Herriott Aff. ¶ 8; ECF No. 31-2 (DX2) ("2018 PSUA"). Herriott executed another PSUA in April 2019, Bradshaw Aff. ¶ 18; Herriott Aff. ¶ 8; ECF No. 31-3 (DX3) ("2019 PSUA"), and a similar Performance-Based Restricted Share Unit Agreement ("PRSU") in April 2020, Bradshaw Aff. ¶ 19; Herriott Aff. ¶ 8; ECF No. 31-4 (DX4) ("PRSU"). These stock awards (which the Court will refer to collectively as the "Stock Agreements"), together have a current value of approximately $450,000, which — had Herriott remained employed with Willis Re — would have vested in April 2021, April 2022, and April 2023. Bradshaw Aff. ¶ 20. Because Herriott left Willis Re in January 2021, however, he has "never received any compensation as a result of executing the [Stock Agreements]." Herriott Aff. ¶ 8.
The three agreements are substantially identical in all material respects. For convenience, the Court will therefore cite to the 2020 PRSU throughout.
In their preambles, the Stock Agreements explained that WTW had "determined that it would be to the advantage and best interest of [WTW] ... to grant an award of [certain shares] to [Herriott] as an incentive for increased efforts during [Herriott's] employment with" Willis Re. PRSU 1. The Stock Agreements specified that they "will not be interpreted to form an employment agreement or service contract with [WTW or any subsidiary] and the terms of any separate employment agreement to which [Herriott] is a party shall remain in effect and will control to the extent that there are any inconsistencies with th[ese] [Stock] Agreement[s]." Id. § 2.3. In addition, each Stock Agreement included, a Restrictive Covenant Agreement ("RCA"), attached as a "Schedule" to the Stock Agreement. See ECF No. 8-1 (PX1) ("2018 RCA"); ECF No. 8-2 (PX2) ("2019 RCA"); ECF No. 8-3 (PX3) ("RCA"). The Stock Agreements provided that, "[i]n consideration of the grant of [shares], [Herriott] shall enter into the" RCAs. PRSU § 6.1. Indeed, Herriott "agree[d] that the grant of [shares] pursuant to" each Stock Agreement was "sufficient consideration for [Herriott] entering into" the corresponding RCA. Id. § 2.1. The Stock Agreements further provided that they were to be "governed by, and construed in accordance with the laws of Ireland without regard to its conflicts of law provisions," except that the RCAs "shall be governed by and construed in accordance with the laws specified in th[ose] agreement[s] without regard to conflicts of law provisions." Id. § 7.8.
Like the Stock Agreements, the three RCAs are substantially identical in all material respects. Thus, the Court will cite the 2020 RCA for convenience throughout.
Under the terms of the Stock Agreements, WTW retained significant discretion to decide whether, or to what extent, Herriott actually received compensation. Among other provisions, the Stock Agreements explained that: WTW "may cancel all or part of the [shares] or require payment by [Herriott] to [WTW] of all or part of any amount or Shares acquired by [Herriott] upon vesting and settlement of the [shares] pursuant to [WTW's] Clawback Policy," id. § 2.7; "the Shares subject to the [Stock Agreements] ... shall become eligible to vest ... to the extent [WTW] determines (and based on the level of attainment) that" certain performance objectives are met, id. § 3.1; WTW "reserves the right to impose other requirements on the [shares] acquired upon vesting ... to the extent [WTW] determines it is necessary or advisable for legal or administrative reasons, and to require [Herriott] to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing," id. § 7.14; see also ECF No. 118 ("Def.’s Supp. Opp'n"), at 4-5 (collecting similar provisions).
Herriott executed the 2018, 2019, and 2020 RCAs in May 2018, 2019, and 2020, respectively. Stip. ¶ 16. The RCAs contain the contractual provisions that Plaintiffs argue Herriott has violated. Most significantly, Section 3.3 of the RCAs state that Herriott shall not, for the Relevant Period, directly or indirectly for a Competitor or otherwise:
within the Relevant Area, solicit any Relevant Client or Relevant Prospect for the purposes of any Business which competes or will compete or seeks to compete with [WTW and its subsidiaries];
within the Relevant Area, accept, perform services for, or deal with any Relevant Client or Relevant Prospect for the purposes of any Business which competes or will compete or seeks to compete with [WTW and its subsidiaries];
solicit for employment or entice away from [WTW and its subsidiaries] any Key Personnel; or
employ or engage or endeavour to employ or engage any Key Personnel.
RCA § 3.3. The RCAs also provide that Herriott "shall not directly or indirectly, at any time during or after [his] employment with [Willis Re], disclose any Confidential Information and shall use [his] best efforts to prevent the taking or disclosure of any Confidential Information to a Competitor." Id. § 3.2.
Section 2 of the RCAs defines the capitalized terms in these provisions as follows:
• "Relevant Period" is defined as "the period of twenty four (24) months following the date on which [Herriott] ceases to be employed by [Willis Re]." Id. § 2.13.
• "Relevant Area" is defined as areas "within and outside of the United States of America, in which [WTW or its subsidiaries] has carried on Business in which [Herriott] has been involved or concerned or working on at any time during the period of twelve (12) months prior to the date on which [Herriott] ceases to be employed by [Willis Re]." Id. § 2.11.
• "Relevant Client" is defined as "any person, firm or company who or which at any time during the period of twelve (12) months prior to the date on which [Herriott] ceases to be employed by [Willis Re] is or was a client or customer of [Willis Re], [WTW] or any of its Subsidiaries or was in the habit and/or practice of dealing under contract with [Willis
Re], [WTW] or any of its Subsidiaries and with whom or which [Herriott] had dealings related to the Business) or for whose relationship with [Willis Re], [WTW] or any of its Subsidiaries [Herriott] had responsibility at any time during the said period." Id. § 2.12.
• "Relevant Prospect" is defined as "any person, firm or company who or which at any time during the period of six (6) months prior to the date on which [Herriott] ceases to be employed by [Willis Re] was an active prospective client of [WTW or its subsidiaries] with whom or with which [Herriott] had dealings related to the Business (other than in a minimal and non-material way)." Id. § 2.14.
• "Business" is defined as "insurance brokerage, reinsurance brokerage, surety brokerage, bond brokerage, insurance agency, underwriting agency, managing general agency, risk management, claims administration, self-insurance, risk management consulting or other business performed by" WTW and its subsidiaries. Id. § 2.2.
• "Key Personnel" is defined as "any person who is at the date [Herriott] ceases to be an employee [of Willis Re] or was (i) at any time during the period of twelve (12) months prior to that date employed by [WTW or its subsidiaries], (ii) an employee with whom [Herriott] had dealings, and (iii) employed by or engaged in the Business in a managerial capacity, or was an employee with insurance, reinsurance or other technical expertise." Id. § 2.9.
• "Confidential Information" is defined as "all trade secrets and non-public information concerning the financial data, strategic business plans, and other non-public, proprietary, and confidential information of" WTW and its subsidiaries." Id. § 2.5.
Complicating matters, whereas the Stock Agreements contained Irish choice-of-law provisions (and Herriott's Employment Agreement contained a California choice-of-law provision), the RCAs state that they "shall be governed by and construed in accordance with the laws of the state of New York, without regard to its conflicts of law principles." Id. § 4.1. The RCAs also contain exclusive forum-selection provisions, stating that "[a]ny suit, action or proceeding arising out of or relating to th[e] RCA[s] shall only be brought in the State and Federal Courts located in the County of New York, State of New York and the Parties hereto irrevocably and unconditionally submit accordingly to the exclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding." Id. § 4.2.
Finally, to the extent relevant here, several provisions memorialize the parties’ views of the RCAs themselves. Section 6.1 of each RCA provides that "[t]his RCA, and the provisions hereof, may not be modified, amended, terminated, or limited in any fashion except by written agreement signed by both parties hereto, which specifically states that it is modifying, amending or terminating this RCA." Id. § 6.1. Section 6.8 states that "[a]ny provisions which by their nature survive termination of this RCA, including the obligations set forth in Section 3 and Section 4, shall survive termination of this RCA." Id. § 6.8. In Section 6.4, Herriott "acknowledges that the" shares he received via the Stock Agreements "constitute[ ] adequate consideration to support the covenants and promises made by [him] within this RCA regardless of whether such [shares are] ultimately beneficial to [him]." Id. § 6.4. In Section 3.7, he "acknowledges that" the restrictive covenants "are fair reasonable and necessary to protect the goodwill and interests of" WTW and its subsidiaries. Id. § 3.7. And Section 3.6 of the RCA provides that Herriott "recognizes and agrees that the payment of damages will not be an adequate remedy for any breach by [Herriott] of" the restrictive covenants, "that irreparable injury will result to [WTW] and/or its Subsidiaries in the event of any such breach," and, thus, "that [WTW] may, in addition to recovering damages, proceed in equity to enjoin [Herriott] from violating any such covenant." Id. § 3.6.
As if that were not enough, it turns out that the Stock Agreements and their corresponding RCAs were not the last agreements between Herriott and Willis Re. Herriott and Willis Re entered two Confidential Retention Agreements ("CRAs"), dated July 31, 2020, and December 18, 2020. Stip. ¶ 17; see ECF No. 121 (DX4) ("July CRA"); ECF No. 121-1 (DX5) ("CRA"). The December 18, 2020 CRA, which superseded the July 31, 2020 CRA, see CRA 3, explains that its purpose "is to compensate and reward [Herriott] for continued employment with [WTW] during the transition period up to and following the completion of" an announced merger between WTW and Aon plc. CRA 3. Under the CRA, Herriott would receive retention payments if he remained with Willis Re for approximately eighteen months beyond the closing of the anticipated merger. Id. §§ 1-3. The CRA further provided that its retention payments were "in addition to any other discretionary incentive compensation or bonus payment ... which [Herriott] might be eligible to receive under any [WTW] discretionary incentive compensation or bonus program in which [Herriott] may be a participant," id. § 4; that "[a]ll other terms of [Herriott's] employment shall remain in full force and effect," id. § 8; and that the CRA "shall be in addition to, and not in place of, and does not supersede any agreement, including but not limited to, Employment Agreement, Confidentiality Agreement, Retention Agreement, Equity Agreement, or LTIP Agreement, that [Herriott] may have previously entered into with [WTW or its subsidiaries]," id. § 8. Attached to the CRA is a cover letter "outlin[ing] the [incentive] awards [Herriott] will receive or be recommended for during this transition period," which lists the "Aon Combination Retention Award" — "[s]ubject to the terms of the attached" CRA — as well as two other incentive plans. CRA 1-2. The letter states that "[t]hese incentive arrangements replace and supersede all other contractual incentive arrangements notified to you by" WTW or its subsidiaries. Id. at 2.
The CRAs were filed and remain under seal.
The CRA contains a California choice-of-law provision. CRA § 9.
C. Herriott's Final Year at Willis Re
In March 2020, just before the COVID-19 pandemic led to lockdowns throughout the United States, Herriott attended an annual conference organized by the Medical Professional Liability Association (the "MPLA Conference") in Scottsdale, Arizona, during which Willis Re hosted a dinner. Stip ¶ 65; Apr. 15, 2021 Tr. 163 (testimony of Morrell). Representatives from several Willis Re clients were present as well, including Medical Mutual Liability Insurance Society of Maryland ("MMLIM"), ProAssurance, Constellation/MMIC, CAP, and perhaps Kansas Medical Mutual Insurance Company ("KAMMCO"). See Stip. ¶¶ 65-67; Apr. 15, 2021 Tr. 38-39 (testimony of Herriott); Tr. 11-13, 38-40, 44, 50-51 (testimony of Herriott); Bradshaw Aff. ¶¶ 49, 66; PX197. Willis Re paid for the dinner. Tr. 52-53 (testimony of Herriott). So too it paid for Herriott's travel and lodging expenses at the conference. Id.
Gloria Everett, CEO of the Mutual, appeared on an RSVP list for the Willis Re dinner, see PX197, and, on that basis, Herriott initially testified at the contempt hearing that he believed she had been in attendance, see Apr. 15, 2021 Tr. 38-39, 52, 100-01 (testimony of Herriott). But she testified unequivocally that she did not attend, id. at 142 (testimony of Gloria Everett), and the Court credited her testimony, see Apr. 19, 2021 Tr. 55. The RSVP list includes two other employees of the Mutual, see PX197, but neither of the witnesses who attended the MPLA Conference and testified at the preliminary injunction hearing could recall whether the employees were at the dinner or not, see Tr. 12-13 (testimony of Herriott); id. at 97 (testimony of Anjanette Benning). In any event, to the extent there is a dispute on this point, it is immaterial, as the Court will explain in its discussion of Relevant Clients below.
In early September 2020, Herriott contacted Gloria Everett, CEO of the Mutual, to arrange a get-together. First Herriott Contempt Aff. ¶ 15. Everett and Herriott are longtime personal friends. Id. ¶ 12; ECF No. 99 ("Everett Contempt Aff."), ¶¶ 2-4. In October 2020, they ultimately met for drinks at Everett's club, during which they discussed family, her home, and personal issues, as well as industry-related issues, for approximately 45 minutes. See First Herriott Contempt Aff. ¶ 15; Apr. 15, 2021 Tr. 147-49 (testimony of Everett). Herriott testified that he "mentioned that [he] had arranged for [his] clients to record video presentations for reinsurers, describing the prior year's developments. These videos were sent to reinsurers before virtual renewal meetings so that the reinsurers could absorb the information in advance of the meetings. [Everett] thought that was an interesting practice and said she would speak to her brokers [at Willis Re], [Joel] Wendland and [Joe] Reitzel, about doing the same." First Herriott Contempt Aff. ¶ 15; see also Apr. 15, 2021 Tr. 145-46 (testimony of Everett). Herriott paid for Everett's drinks and, in turn, was reimbursed by Willis Re. See Apr. 15, 2021 Tr. 54 (testimony of Herriott); id. at 149 (testimony of Everett); Bradshaw Aff. ¶ 64. Everett later followed up with an email to Herriott, noting: "I appreciate your giving me a heads up on the advance video presentations for reinsurance meetings. I will follow up with [Wendland] and [Reitzel]." PX180; Apr. 15, 2021 Tr. 144-45 (testimony of Everett). Shortly thereafter, Herriott sent Wendland a calendar invitation titled "The Mutual Catch-Up," which was accepted. PX181, PX182. Herriott, however, could not recall the specifics of any discussion with Wendland. See Apr. 15, 2021 Tr. 55 (testimony of Herriott).
Herriott is also longtime personal friends with Neil Morrell, the CEO of MagMutual, another Willis Re client, who himself was formerly employed by Willis Re. See ECF No. 100 ("Morrell Contempt Aff.") ¶¶ 1-3; First Herriott Contempt Aff. ¶ 7. In September 2020, Morrell, Herriott, and three other Willis Re brokers — Wendland, Tim Metke, and Sean Whelan — held a virtual cocktail hour over Zoom. Morrell Contempt Aff. ¶ 6. Both Herriott and Morrell credibly testified that the event was purely social and did not involve any discussion of the reinsurance business. First Herriott Contempt Aff. ¶ 11 n.2; Morrell Contempt Aff. ¶ 6. In November 2020, Morrell proposed that he, Herriott, Wendland, Metke, and Whelan get together for a dinner in Miami. Morell Contempt Aff. ¶ 7. Bradshaw, Herriott's supervisor, approved the trip, which was to occur in December 2020, meaning that Willis Re would have covered the expenses of Herriott and the other Willis Re attendees. See Bradshaw Contempt Aff. ¶ 27; Apr. 15, 2021 Tr. 41 (testimony of Herriott); id. at 208 (testimony of Bradshaw). But the dinner, along with the related trip to Miami, was ultimately canceled and never occurred. See Morrell Contempt Aff. ¶ 7; First Herriott Contempt Aff. ¶ 11; Apr. 15, 2021 Tr. 41-44 (testimony of Herriott).
D. Herriott's Departure from Willis Re
Notwithstanding the incentive arrangements described above, Herriott began to think about leaving Willis Re at some point in 2020. As relevant here, in August 2020, he started having discussions with TigerRisk, a direct competitor of Willis Re, about joining TigerRisk. See Apr. 15, 2021 Tr. 14 (testimony of Herriott); Stip. ¶ 13. He did not make the decision to leave, however, until the end of December 2020. See Tr. 13 (testimony of Herriott). Shortly thereafter, Herriott and nine other Willis Re employees who were members of the same healthcare segment group all resigned from Willis Re and joined TigerRisk. Stip. ¶ 13. Herriott notified Willis Re of his resignation on January 6, 2021, Bradshaw Aff. ¶ 27; PX215, a move that was publicly announced two days later, Bradshaw Aff. ¶ 29; PX216. Herriott's last day at Willis Re was January 21, 2021, following the expiration of a fifteen-day notice period. Bradshaw Aff. ¶ 27. Herriott began working at TigerRisk the very next day. Stip. ¶ 14.
Between January 22, 2021, when Herriott joined TigerRisk, and February 9, 2021, when the Court issued the TRO, described in more detail below, Herriott solicited, or performed services for, a number of then-Willis Re clients, including MLM, CAP, CHI, the Mutual, and MagMutual, Stip. ¶¶ 23, 51, 55; Apr. 15, 2021 Tr. 45-46 (testimony of Herriott); id. at 146-47 (testimony of Everett). On January 26, 2021, CHI gave Herriott a broker-of-record letter ("BOR") — a letter "provided to the reinsurers with whom the [brokers’ insurance company clients] do business so that those reinsurers know the identity of the individual reinsurance broker to contact if the reinsurers need to inquire about reinsurance claims, underlying insurance losses, or any other information," Bradshaw Contempt Aff. ¶ 24 — appointing TigerRisk as its new reinsurance broker. Stip. ¶ 44; PX7. On February 5 and 9, 2021, MLM, the Mutual, and MagMutual followed suit. Stip. ¶¶ 29, 52, 56; PX11; PX13, PX16. Since learning of the TRO later on the evening of February 9, 2021, however, Herriott has had no interaction with MLM, CHI, or CAP (with the exception of brief phone calls in which he informed those entities that he could no longer engage with them), since he understood them to be Relevant Clients covered by the TRO. Herriott Aff. ¶ 4. (By contrast, there is no dispute that he has continued to deal with the Mutual and MagMutual. See Apr. 15, 2021 Tr. 98-99 (testimony of Herriott).) On February 12, 2021, MLM issued a second BOR naming TigerRisk, this time addressed to Strenge, one of the brokers who left Willis Re for TigerRisk at the same time as Herriott. Stip. ¶ 30; PX14. CAP issued a BOR naming Anjanette Benning, another former Willis Re broker now at TigerRisk, on February 18, 2021. PX6. On March 17, 2021, CHI followed suit and issued a second BOR to TigerRisk, this time naming Benning, rather than Herriott. Stip. ¶ 46; PX8.
Additional former Willis Re clients issued BORs naming TigerRisk as their new broker during this period, including Hills Insurance Company Inc. ("Hills"), Lawyers Mutual Liability Insurance Company of North Carolina ("Lawyers Mutual NC"), Wisconsin Lawyers Mutual Insurance Company ("Wisconsin Lawyers"), and the Bar Plan Mutual Insurance Company ("Bar Plan"). See Bradshaw Aff. ¶¶ 108-11.
The defection of these clients from Willis Re to TigerRisk did not necessarily have a direct and immediate impact on Willis Re's bottom line because of the nature of the reinsurance business. Brokers like Willis Re typically earn all of the fees with respect to a particular client for a given year upfront when the client's reinsurance program is placed at the start of each annual renewal period. That is, for purposes of the fees earned by Willis Re in 2021, "[i]t wouldn't matter if the [client] left on December 28th of 2020 when the renewal was finished or whether they left on December 28th of 2021 because "the brokerage is earned when the program is placed." Tr. 143 (testimony of Bradshaw); see id. at 134-36. Willis Re earned renewal fees from CHI and CAP based on January 1, 2021, renewals and has received or will receive those fees as they become payable, Stip. ¶ 47; Willis earned fees on a July 1, 2020, renewal for MLM for the period of July 1, 2020, to July 1, 2021, id. ¶ 31. The revenue Willis Re earned in 2020 for CHI, CAP, and MLM is likely close to what Willis Re will earn in 2021. Id. ¶ 80.
E. Procedural History
Willis Re commenced this action on January 20, 2021. See ECF No. 1. Two days later, Herriott and TigerRisk filed a complaint in the Superior Court of California seeking declaratory and injunctive relief invalidating, and preventing the enforcement of, the restrictive covenants in the RCAs (the "California Action"). Stip. ¶ 19; see Compl., Herriott v. Willis Re Inc. , No. CGC-21-589171 (Super. Ct. Cal. Jan. 22, 2021), Dkt. No. 1. On January 25, 2021, Willis Re and WTW removed the California Action to federal court in the Northern District of California. Notice of Removal, Herriott v. Willis Re Inc. , No. 4:21-CV-588 (JST) (N.D. Cal. Jan. 25, 2021), ECF No. 1.
On January 28, 2021, Willis Re filed the operative First Amended Complaint ("the Complaint"), ECF No. 8 ("Compl."), adding WTW as a Plaintiff, and moved for entry of a TRO and preliminary injunction, ECF No. 10. Plaintiffs sought to enjoin Herriott, and those acting in concert with him, from (1) continuing to prosecute the California Action; (2) soliciting, performing services for, or dealing with any Relevant Client or Relevant Prospect for the purposes of any Business in competition with Plaintiffs; (3) soliciting for employment, enticing away, or endeavoring to employ or engage any Key Personnel; (4) using, disclosing, or transmitting for any purpose information contained in Willis Re records or using or disclosing Willis Re's trade secrets and/or Confidential Information; and (5) destroying or erasing Willis Re records in Herriott's possession. Id. The next day, the Court directed Herriott to file an opposition and scheduled a telephone conference for February 2, 2021. ECF No. 22. At the conference, the Court reserved judgment on Plaintiffs’ TRO application, ECF No. 93 ("Feb. 2, 2021 Tr."), at 38, and subsequently directed the parties to file supplemental briefs addressing certain choice-of-law issues raised by Plaintiffs’ motion, ECF No. 32. On February 9, 2021, at 5:25 p.m. Eastern time, following receipt of the parties’ supplemental submissions, the Court granted in part and denied in part Plaintiffs’ request for a TRO. See ECF No. 41 ("TRO"). To the extent relevant here, the TRO:
• enjoined "Herriott, directly or indirectly, whether alone or in concert with others, and anyone acting in concert with him ... from continued prosecution of the California Action" and ordered Herriott to "take all steps to promptly secure termination of his claims in the California Action" and refrain from "commenc[ing] or maintain[ing] any further action in violation of the RCA's Forum Selection Clause," id. at 2;
• enjoined "Herriott, directly or indirectly, whether alone or in concert with others, including any owner,
member, partner, shareholder, officer, agent, employee and/or representative of TigerRisk Partners, LLC, and anyone acting in concert with them" from
• "soliciting ... accepting, performing services for, or dealing with any Relevant Client or Relevant Prospect for the purposes of any Business which competes or will compete or seeks to compete with" WTW and its subsidiaries, id. ;
• "performing or supervising the performance of services or provisions of products of the type sold or provided by him while employed by Willis Re on behalf of any Relevant Clients or Relevant Prospects," id. at 3;
• "using, disclosing, or transmitting for any purpose, including the solicitation of business, the information contained in the records of Willis, ... or using, disclosing or transmitting for any purposes, including the solicitation of business, any Confidential Information[,] ... [or] disclosing or using for his own purpose, or for the purpose of any other person or entity, any of Willis’ trade secrets or other Confidential Information," id. ;
• "destroying, erasing, or otherwise making unavailable for further proceedings in this matter, or in any arbitration proceeding between the parties, any records or documents ... in Herriott's possession or control which were obtained from or contain information derived from any of Willis’ records, which pertain to Willis, Willis Re's employees, clients, or prospective clients, or which relate to any of the events alleged in this action," id. at 3-4;
• ordered Herriott to "return to Willis’ counsel any and all records or information pertaining to Willis, Willis’ Confidential Information or trade secrets ... and purge such information from [his] possession, custody, or control, within 24 hours of the Court's Order provided, however, that any information so purged shall be ... saved ... prior to purging and be returned to Willis," id. at 4; and
• ordered Herriott to "fully and completely comply and conform with any and all of his other contractual obligations under the RCA," id.
In an accompanying Memorandum Opinion and Order, the Court explained that it had concluded that New York law governed Plaintiffs’ claims and that entry of the TRO was therefore appropriate "subject to certain modifications." Willis Re Inc. v. Herriott , No. 21-CV-487 (JMF), 2021 U.S. Dist. LEXIS 25541, at *2 (S.D.N.Y. Feb. 9, 2021) (ECF No. 40). In particular, the Court explained that it would not enjoin TigerRisk itself "from prosecuting the related litigation in California as it is not a party to the agreements at issue" and that, because "Plaintiffs ha[d] provided no evidence, other than a conclusory allegation, upon information and belief, that Herriott ha[d] taken any action to improperly solicit [Willis Re] employees," it would "not grant that portion of the requested injunctive relief." Id. at *2-3 (cleaned up) (citing JTH Tax, Inc. v. Sawhney , No. 19-CV-4035 (AJN), 2019 WL 3051760, at *4 (S.D.N.Y. July 11, 2019) ; W. Publ'g Corp. v. Coiteux , No. 16-CV-6825 (JSR), 2017 WL 4339486, at *3 (S.D.N.Y. Aug. 28, 2017) ). The Court "reserve[d] judgment on whether to grant a preliminary injunction — and, if so, whether it should be narrower than the terms of the temporary restraining order — pending further briefing [on] issues that ha[d] not been adequately addressed in the parties’ briefs to date given their focus on the choice-of-law issue." Id. at *3. The Court directed the parties to file supplemental briefs addressing two specific questions "along with anything else they wish to address." Id. at *4.
The Court's two questions were: "(1) Whether and to what extent the RCAs are enforceable under New York law (particularly in light of case law suggesting that New York courts may refuse to enforce unreasonable portions of restrictive covenants, including those preventing solicitation of prospective clients), including whether and to what extent the Court should ‘blue pencil’ the agreements"; and "(2) Whether Plaintiffs have made an adequate evidentiary showing to satisfy the irreparable harm requirement for the purposes of entering a preliminary injunction, both in terms of establishing that the alleged harms are concrete and imminent and that they cannot be adequately redressed by money damages." Id.
On February 12, 2021, the Court conducted another telephone conference. At the conference, Plaintiffs raised their concern that Herriott "ha[d] not taken any steps to promptly secure termination of his claims in the California [A]ction and, in violation of the [TRO], he ha[d] maintained his claims in violation of the RCA forum section clause." ECF No. 51 ("Feb. 12, 2021 Tr."), at 6. Herriott's counsel argued that "[f]orcing Mr. Herriott to dismiss claims in California seems to be ... a very extreme remedy," id. at 10; that it presented an appealable issue "because it goes beyond maintaining the status quo," id. at 14; and that "the [TRO] said [‘]promptly dismiss[’] and if we are having this conference with you today, I don't believe we are outside the time limits for seeking reconsideration of that portion of [the TRO], or frankly, considering an appeal," id. The Court observed that it did not "think that [Herriott] ha[d] complied with the provision of the [TRO] that required [him] to take reasonable steps to secure termination [of the California Action]. That would seem to require him to file a notice of voluntary dismissal and therefore he is out of the case." Id. The Court added that "the TRO is quite clear and it [says] [‘]take all steps to promptly secure termination[’].... If [Herriott] compl[ies] now, perhaps that will satisfy the prompt requirement." Id. at 15. In addition, the Court authorized expedited discovery, scheduled a hearing on Plaintiffs’ request for a preliminary injunction, and extended the TRO on Herriott's consent through the date of the hearing. See id. at 16-21. Later that day, Herriott voluntarily dismissed his claims in the California Action without prejudice. See Stip. ¶ 21; ECF No. 44; Notice of Dismissal Without Prejudice, Herriott , No. 4:21-CV-588 (JST) (N.D. Cal. Feb. 12, 2021), ECF No. 42.
Thereafter, the TRO was extended through the date of this Opinion. See Tr. 219.
On March 10, 2021, Herriott filed a notice of appeal "from the portion of the [TRO] ... that enjoined [him] from the continued prosecution of his claims and required him to take all steps to promptly secure termination of his claims in the [California Action] and ordered that he shall not commence or maintain any further action in violation of the Restrictive Covenant Agreement's Forum Selection Clause." ECF No. 56. That appeal remains pending.
On March 12, 2021, Plaintiffs filed an emergency motion seeking to hold Herriott in contempt for violations of the TRO. ECF No. 62. Specifically, Plaintiffs alleged that Herriott had violated the TRO by (1) accepting or performing services for five Relevant Clients that had moved their business to TigerRisk and (2) failing to promptly dismiss his claims in the California Action. ECF No. 63, at 9-12. In their reply papers, Plaintiffs added the solicitation of a sixth Relevant Client and the fact that Herriott had failed to return Willis Re's Confidential Information in his possession until March 11, 2021, a month after the deadline directed by the TRO. See ECF No. 84, at 2-8. At a telephone conference on March 25, 2021, Herriott's counsel represented that Herriott had turned over or destroyed any materials that were subject to being returned under the terms of the TRO. ECF No. 96 ("Mar. 25, 2021 Tr."), at 12. In light of that, and the absence of any material factual disputes pertaining to Herriott's dismissal of his claims in the California Action, the Court scheduled a hearing on the portion of Plaintiffs’ contempt motion relating to Herriott's alleged solicitation and servicing of Relevant Clients, given the "pretty clear factual disputes ... with respect to Mr. Herriott's role and whether and to what extent he was involved in dealing with any of the clients such that they would ... fall within the scope of the restrictive covenant and the TRO." Id. at 3; see ECF No. 92.
Pursuant to Rule 43(a) of the Federal Rules of Civil Procedure and the Standing Orders in the Southern District of New York concerning the COVID-19 pandemic, the contempt hearing was conducted remotely using a Zoom-based video platform on a finding of good cause and the consent of the parties. ECF No. 105. Following the hearing, conducted on April 15 and 19, 2021, the Court denied Plaintiffs’ contempt motion in full. At the outset, the Court denied the motion with respect to (1) Herriott's alleged failure to promptly dismiss his claims in the California Action based on the fact that he did ultimately dismiss his claims immediately after the Court's clarifying comments at the February 12th conference, which itself took place only days after the TRO, Apr. 15, 2021 Tr. 4-6; and (2) Herriott's failure to turn over certain documents within twenty-four hours of the TRO, having determined that Plaintiffs had waived the argument by failing to raise it in their initial papers, id. at 6-7 (citing Farmer v. United States , No. 15-CV-6287 (AJN), 2017 WL 3448014, at *3 (S.D.N.Y. Aug. 10, 2017) ). After hearing testimony from witnesses on both sides and noting Plaintiffs’ heavy burden on a contempt motion, Apr. 19, 2021 Tr. 44 (citing Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc. , 369 F.3d 645, 655 (2d Cir. 2004) ), the Court found that Plaintiffs had failed to establish violations of the TRO based on Herriott's solicitation or servicing of Relevant Clients by clear and convincing evidence — "[i]n short, because there ‘[wa]s a fair ground of doubt as to the wrongfulness of [Mr. Herriott's] conduct’ a finding of contempt [wa]s ‘inappropriate,’ " id. at 55 (quoting Latino Officers Ass'n City of N.Y., Inc. v. City of New York , 558 F.3d 159, 164 (2d Cir. 2009) ). On the very same day, the Northern District of California ordered the California Action remanded back to state court for lack of complete diversity. See Order, Herriott , No. 4:21-CV-588 (JST) (N.D. Cal. April 19, 2021), ECF No. 52.
Much of the testimony and evidence developed at the contempt hearing is relevant to the issues currently before the Court, and both parties agreed that the Court could consider the record developed at the contempt hearing in deciding the present motion. See Tr. 3-5.
On a similar finding of good cause and the consent of the parties, the hearing on Plaintiffs’ motion for a preliminary injunction was conducted remotely using the same Zoom-based platform on May 19 and 20, 2021. ECF No. 113.
CONCLUSIONS OF LAW
"A preliminary injunction is an extraordinary remedy never awarded as of right." Winter v. Nat. Res. Def. Council, Inc. , 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ; see also Hanson Tr. PLC v. SCM Corp. , 774 F.2d 47, 60 (2d Cir. 1985) (describing a preliminary injunction as "one of the most drastic tools in the arsenal of judicial remedies"). To obtain relief, the party seeking a preliminary injunction "must ordinarily establish (1) irreparable harm; (2) either (a) a likelihood of success on the merits, or (b) sufficiently serious questions going to the merits of its claims to make them fair ground for litigation, plus a balance of the hardships tipping decidedly in favor of the moving party; and (3) that a preliminary injunction is in the public interest." New York ex rel. Schneiderman v. Actavis PLC , 787 F.3d 638, 650 (2d Cir. 2015) (internal quotation marks omitted). "A showing of irreparable harm is the single most important prerequisite for the issuance of a preliminary injunction." Faiveley Transp. Malmo AB v. Wabtec Corp. , 559 F.3d 110, 118 (2d Cir. 2009) (internal quotation marks omitted). Thus, if a party fails to show irreparable harm, a court need not even address the remaining elements. See, e.g. , Roberts v. Atl. Recording Corp. , 892 F. Supp. 83, 88 (S.D.N.Y. 1995). By the same token, if the moving party fails to demonstrate a likelihood of success on the merits or sufficiently serious questions and a balance of hardships tipping "decidedly" in its favor, the Court may deny relief without addressing the question of harm. See, e.g. , Daily Harvest, Inc. v. Imperial Frozen Foods Op Co. LLC , No. 18-CV-5838 (ALC), 2018 WL 3642633, at *7-8 (S.D.N.Y. Aug. 1, 2018) (internal quotation marks omitted).
Applying these standards here, the Court concludes that Plaintiffs are entitled to a preliminary injunction, albeit a somewhat narrower one than they seek. The Court will explain why, but begins by addressing two eleventh-hour arguments raised by Herriott with respect to the enforceability of the RCAs and then turning to the choice of what jurisdiction's law applies, an issue that bears heavily on Plaintiffs’ motion and this action as a whole.
The Court has subject-matter jurisdiction pursuant to 28 U.S.C § 1332(a)(1). See FAC ¶¶ 2-5; ECF No. 112 ("Answer"), ¶ 5. Herriott disputes that there is personal jurisdiction, see Answer ¶ 8, and moved to dismiss on that basis, see ECF No. 106, but he conceded that the exercise of personal jurisdiction would be proper if, as the Court had held (and reaffirms here), the RCAs were enforceable because they include clauses providing for adjudication in New York, ECF No. 107, at 1, 2 n.2; see BMW of N. Am. LLC v. M/V Courage , 254 F. Supp. 3d 591, 597 (S.D.N.Y. 2017) ("Parties can consent to personal jurisdiction through forum-selection clauses in contractual agreements ... [and] if a forum selection clause is both valid and applicable, it is not necessary to analyze jurisdiction under New York's long-arm statute or federal constitutional requirements of due process[.]" (internal quotation marks omitted)); see also ECF No. 109 (denying Herriott's motion to dismiss).
A. The Enforceability of RCAs
At the outset, the Court considers two arguments that Herriott raises for the first time in his supplemental submission: (1) that the RCAs are unenforceable for lack of consideration because the promises made by WTW in the accompanying Stock Purchase Agreements are illusory, see Def.’s Supp. Opp'n 3-5; and (2) that the RCAs were abrogated by the CRAs, id. at 5-6. Neither argument provides a basis to deny Plaintiffs preliminary injunctive relief.
For starters, Plaintiffs make a forceful argument that Herriott "forfeited any arguments with respect to the[se] [issues] by failing to make them in [his] initial memorandum of law." Grytsyk v. Morales , 527 F. Supp. 3d 639, 656 No. 19-CV-3470 (JMF) (S.D.N.Y. Mar. 22, 2021) (citing Farmer , 2017 WL 3448014, at *3 ); see ECF No. 129 ("Pls.’ Supp. Reply"), at 1. Herriott's new arguments are predicated on the language of the RCAs and the CRAs — agreements to which Herriott himself was a party — and, thus, he "could have and should have" raised them in his "original motion papers." Res. Mine, Inc. v. Gravity Microsystem LLC , No. 09-CV-573 (DRH) (SIL), 2015 WL 8665444, at *3 n.3 (E.D.N.Y. Dec. 11, 2015). It is no excuse to say that Herriott's original motion papers were filed on a short deadline in response to an emergency application for a TRO. To the extent he needed it, Herriott could have requested more time and, despite the little time he had, he was able to file a detailed, twenty-four-page brief. See Tr. 192-93. At a minimum, he could have included in his brief a reservation of the right to raise the arguments that he now attempts to raise. Having failed to do so, Herriott forfeited the arguments for purposes of this stage of the litigation.
The fact that the Court invited supplemental briefing from the parties on "anything else they wish to address" does not alter its conclusion. Willis Re , 2021 U.S. Dist. LEXIS 25541, at *4. The Court did so in the context of requesting "further briefing" on issues that were not adequately addressed in the parties’ briefs "given their focus on the choice-of-law issue." Id. at *3 (emphasis added). It was not an invitation to raise new arguments altogether.
In any event, Herriott's arguments fall short on their own terms. With respect to Herriott's first argument — that the RCAs are unenforceable for lack of consideration — the law is clear "that courts will rarely, if ever, investigate the adequacy of the consideration exchange." Dan-Bunkering (Am.), Inc. v. Tecnologias Relacionadas con Energia y Servicios Especializados, S.A. de C.V. , No. 17-CV-9873 (KPF), 2020 WL 3893281, at *7 (S.D.N.Y. July 10, 2020) (quoting MM Ariz. Holdings LLC v. Bonanno , 658 F. Supp. 2d 589, 593 (S.D.N.Y. 2009) ). Indeed, the New York Court of Appeals has explained that, "[a]bsent a claim of fraud or unconscionability, the adequacy of consideration is not a proper subject for judicial scrutiny." Spaulding v. Benenati , 57 N.Y.2d 418, 423, 456 N.Y.S.2d 733, 442 N.E.2d 1244 (1982). "It is enough that something of ‘real value in the eye of the law’ was exchanged," Apfel v. Prudential-Bache Sec. Inc. , 81 N.Y.2d 470, 476, 600 N.Y.S.2d 433, 616 N.E.2d 1095 (1993), "even if the consideration exchanged is grossly unequal or of dubious value," id. at 475, 600 N.Y.S.2d 433, 616 N.E.2d 1095. "Moreover, it is well-settled that New York courts will not adopt an interpretation that renders a contract illusory when it is clear that the parties intended to be bound thereby." Faust Harrison Pianos Corp. v. Allegro Pianos, LLC , No. 09-CV-6707 (ER), 2013 WL 2292050, at *11 (S.D.N.Y. May 24, 2013) (cleaned up) (collecting cases). Nor, for that matter, is a contract illusory "merely because its terms give discretion to one party to the contract, as every contract encompasses the implied duty of good faith and fair dealing. New York courts consider whether a defendant's behavior is reasonable before finding a contract illusory." Lebowitz v. Dow Jones & Co. , 508 F. App'x 83, 84-85 (2d Cir. 2013) (summary order) (citations omitted).
It is far from clear that New York law governs whether the RCAs are unenforceable. As noted, the RCAs themselves contain New York choice-of-law provisions. See RCA § 4.1. But the RCAs define the consideration given to Herriott as the shares awarded pursuant to the corresponding Stock Agreements, see RCA 1, and Herriott's argument is actually based on the terms of the Stock Agreements, see Def.’s Supp. Opp'n 4-5. They, of course, contain Irish choice-of-law provisions. See PRSU § 7.8. Thankfully, the Court need not resolve this particular choice-of-law conundrum because both sides rely on New York law, see Tr. 194-95; Pls.’ Supp. Reply 9-10, and agree that there is no material difference between New York and Irish law on the issue, see Tr. 182-84, 194-95; see also, e.g. , AIG Eur. (Neth.), N.V. v. UPS Supply Chain Sols., Inc. , 765 F. Supp. 2d 472, 479 (S.D.N.Y. 2011) ("[N]either [party] contends that there is an actual conflict between the applicable rules of the relevant jurisdictions. Moreover, the parties cite to New York law and assume that New York law controls as to this issue. Accordingly, this Court will apply New York law ...." (cleaned up)).
In light of these principles, there is no merit to Herriott's argument about the enforceability of the RCAs. It is plain that "the parties intended to be bound" by the RCAs. Faust Harrison Pianos Corp. , 2013 WL 2292050, at *11. Indeed, Herriott does not even attempt to argue otherwise. And while the Stock Agreements certainly granted WTW considerable discretion to modify the awards that Herriott would receive, see Def.’s Opp'n 4-5, Herriott makes no allegation that Plaintiffs exercised that discretion in an unreasonable manner. Nor does he allege any fraud or unconscionability. Herriott may not have been wise to agree to the terms of the RCA, but agree to them he did, and he is now bound by that agreement.
Herriott's second argument — that the CRAs abrogated the RCAs — is a closer call, but it is ultimately not supported by the current record. The argument relies on language in the cover letters attached to the CRAs, which provides that "[t]hese incentive arrangements replace and supersede all other contractual incentive arrangements notified to you by [WTW and its subsidiaries]." CRA 2. Noting that the Stock Agreements were, by their terms, "contractual incentive arrangements," see PRSU 1 ("[WTW] has determined that it would be to the advantage and best interest of [WTW] and its shareholders to grant an award of [shares] ... to [Herriott] as an incentive for increased efforts during [Herriott's] employment with [WTW] ...." (emphasis added)) — a point that Plaintiffs’ counsel conceded, see Tr. 190-91 — Herriott contends that the CRAs therefore abrogated the Stock Agreements. And because the Stock Agreements were superseded, so too were the attached RCAs. Def.’s Supp. Opp'n 5-6.
Complicating matters, though, the CRAs contain language very different from the cover letters. Each provides that "[t]his Agreement shall be in addition to, and not in place of, and does not supersede any agreement, including but not limited to, Employment Agreement, Confidentiality Agreement, Retention Agreement, Equity Agreement, or LTIP Agreement, that [Herriott] may have previously entered into with [WTW and its affiliates]." CRA § 8 (emphases added). If the CRAs and their cover letters constitute a single agreement, these two clauses would appear to be in conflict and that conflict would presumably be construed against Willis Re, as the drafter of the documents. See HarperCollins Publishers LLC v. Open Rd. Integrated Media, LLP , 7 F. Supp. 3d 363, 374 (S.D.N.Y. 2014) ("New York follows the well established contra proferentem principle which requires that equivocal contract provisions are generally to be construed against the drafter." (quoting McCarthy v. Am. Int'l Grp., Inc. , 283 F.3d 121, 124 (2d Cir. 2002) )); Tr. 192 (Plaintiffs’ counsel stating "I think I would have to concede, your Honor, that the law in New York is clear that any ambiguity in a contract would be construed against the drafter"). But there are several reasons to conclude that the two are not a single agreement. Cf. People ex rel. State v. Tempur-Pedic Int'l, Inc. , 30 Misc.3d 986, 916 N.Y.S.2d 900, 909 (Sup. Ct. 2011) (rejecting a "claim that the [agreement] and the ‘cover letter’ should be considered one contract" as "flawed"), aff'd sub nom. People v. Tempur-Pedic Int'l, Inc. , 95 A.D.3d 539, 944 N.Y.S.2d 518 (1st Dep't 2012). For instance, the header "Confidential Revised Retention Agreement" appears after the cover letter, CRA 3; the first sentence then defines "[t]his Confidential Revised Retention Agreement" as the "Agreement," id. ; and the text makes no reference to the cover letter. Additionally, the letter references two other incentive programs having nothing to do with the CRA, neither of which is attached. Id. at 1-2. And whereas the "Confidential Revised Retention Agreement" is signed by John Haley on WTW's behalf, the cover letter is instead signed by James Kent. Compare id. at 5, with id. at 2. Finally, the text immediately above Herriott's signature reads, "I have read, understood and acknowledge the terms and conditions set out in this Confidential Agreement (‘Agreement’). By clicking the Confirm box below I agree to be bound by the terms and conditions of the Agreement." Id. at 5 (emphasis added). All of that might be beside the point, but there is no indication in the current record that Herriott even signed the cover letters. If they do not constitute a single agreement with the CRAs, that means that the letters — with the language on which Herriott relies — would not be binding.
On top of that, although not mentioned by either side, Section 6.1 of each RCA states that "[t]his RCA, and the provisions hereof, may not be modified, amended, terminated, or limited in any fashion except by written agreement signed by both parties hereto, which specifically states that it is modifying, amending or terminating this RCA. " RCA § 6.1 (emphasis added). The cover letters to the CRAs do not reference the RCAs, let alone "specifically state[ ]" that they are "modifying, amending or terminating" the RCAs. Id. Thus, assuming for the sake of argument that the cover letters are in fact binding on the parties, there is a strong argument that any purported termination of the RCAs would be invalid. Moreover, Section 6.8 of each RCA provides that "[a]ny provisions which by their nature survive termination of this RCA, including the obligations set forth in Section 3 and Section 4, shall survive termination of this RCA." Id. § 6.8 (emphasis added). Thus, assuming for the sake of argument that the cover letters did validly abrogate the RCAs, there is a strong argument that the latter's non-compete provisions (which are set forth in Section 3) and the forum-selection provisions (which are set forth in Section 4) would nevertheless remain in effect.
B. Choice of Law
With that, the Court turns to a threshold issue that looms large: choice of law. Plaintiffs argue, as they did at the TRO stage, that New York law applies. See ECF No. 11 ("Pls.’ Mem."), at 10-11; ECF No. 39 ("Pls.’ Choice of Law Mem."), at 1-10. By contrast, Herriott argues, as he did at the TRO stage, that California law applies. See ECF No. 30 ("Def.’s Opp'n"), at 13-21; ECF No. 38 ("Def.’s Choice of Law Opp'n"), at 1-10; Def.’s Supp. Opp'n 15. The issue is potentially outcome-determinative. See Feb. 2, 2021 Tr. 33 (Plaintiffs conceding that, if California law applies, they would almost certainly not be entitled to relief). For one thing, while New York law is generally friendly to non-compete provisions, California law is quite the opposite. Subject to certain limited statutory exceptions not applicable here, California law provides that "[e]very contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." Cal. Bus. & Prof. Code § 16600 ; see Edwards v. Arthur Andersen LLP , 44 Cal.4th 937, 81 Cal.Rptr.3d 282, 189 P.3d 285, 290-91 (2008) ; SG Cowen Sec. Corp. v. Messih , No. 00-CV-3228 (HB), 2000 WL 633434, at *4 (S.D.N.Y. May 17, 2000), aff'd , 224 F.3d 79 (2d Cir. 2000). For another, Section 925 of the California Labor Code provides in relevant part as follows:
(a) An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:
(1) Require the employee to adjudicate outside of California a claim arising in California.
(2) Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.
(b) Any provision of a contract that violates subdivision (a) is voidable by the employee, and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in California and California law shall govern the dispute.
Cal. Lab. Code § 925. If this provision applied, then the forum-selection and choice-of-law provisions in the RCAs would presumably be void and the parties’ dispute would almost certainly have to be adjudicated in California under California law.
Section 925 applies to any contract "entered into, modified, or extended on or after January 1, 2017," id. § 925(f), which includes each of the RCAs. Although there is an exception for "a contract with an employee who is in fact individually represented by legal counsel in negotiating the terms of [the] agreement," id. § 925(e), Herriott entered into the Stock Agreements without seeking legal advice from counsel, ECF No. 31 ("Herriott TRO Decl."), ¶¶ 17, 20, 22.
As he did at the TRO stage, Herriott makes three arguments for why California law governs: (1) that a plain reading of the Stock Agreements and RCAs, together with the Employment Agreement, indicates that the parties selected California law; (2) that the New York choice-of-law and forum-selection provisions of the RCAs are invalid in light of California Labor Law Section 925; and (3) that, even if New York law applies, New York's choice-of-law principles call for application of substantive California law. See Def.’s Opp'n 13-21. The Court remains unpersuaded but will address each of Herriott's arguments in turn.
As noted, when issuing the TRO, the Court briefly explained its conclusion that New York law governs. Willis Re , 2021 U.S. Dist. LEXIS 25541, at *1. What follows expands on the Court's earlier explanation.
1. Plain Reading of the Parties’ Contracts
First, although the parties’ various contracts, each of which contains a different choice-of-law provision, are somewhat dizzying, a plain reading of the contracts supports application of New York law. As discussed above, the Employment Agreement contains a California choice-of-law provision, Employment Agreement § 8; the Stock Agreements contain Irish choice-of-law provisions, PRSU § 7.8; and the RCAs contain New York choice-of-law provisions, RCA § 4.1. Herriott's argument relies on Section 2.3 of the Stock Agreements, which provides, in relevant part, that "the terms of any separate employment agreement to which [Herriott] is a party shall remain in effect and will control to the extent that there are any inconsistencies with this Agreement." PRSU § 2.3. Herriott asserts that the conflicting choice-of-law provisions in the parties’ agreements constitute an inconsistency and that, under Section 2.3 of the Stock Agreements, the Employment Agreement's California choice-of-law provision controls. See Def.’s Opp'n 14-17; Def.’s Choice of Law Opp'n 7-8.
The equivalent provision is numbered as Section 2.2 in the 2018 and 2019 Stock Agreements. 2018 PSUA § 2.2; 2019 PSUA § 2.2.
This argument does not withstand scrutiny for one simple reason: There is no inconsistency. For one thing, the Stock Agreements and the RCAs explicitly note that they are separate and apart from the Employment Agreement. See, e.g. , PRSU § 2.3 ("[T]he terms of any separate employment agreement to which [Herriott] is a party shall remain in effect ...."); RCA § 3.4 ("To the extent [Herriott] is a party to an Employment Agreement or other agreement with [WTW and its subsidiaries] that contains post-employment covenants and restrictions, those post-employment covenants and restrictions shall be separate and apart and independent from the covenants and restrictions set forth in Section 3.2 and Section 3.4 herein."); id. § 5.2 ("[Herriott] acknowledges that he ... remains bound by any Employment Agreement or any other agreement currently in effect by and between [him], on the one hand, and [WTW and its subsidiaries] on the other hand, including but not limited to any post-employment covenants and restrictions, and this RCA shall be in addition to, and not in place of any such agreements."). For another, the Stock Agreements explicitly acknowledged that, while they were to be governed by Irish law, the attached RCAs would be governed by their respective choice-of-law provisions. See PRSU § 7.8. In other words, although the RCAs reference the Employment Agreement, they make clear that they are separate agreements to be construed independently. As such, claims arising under the RCAs are governed by New York law, while claims arising under the Employment Agreement are governed by California law. Plaintiffs here allege violations of the RCAs; they do not allege any breach of the Employment Agreement. And while Section 2.3 of the Stock Agreements states that "the rights and obligations of [Herriott] under the terms of his office or employment with [WTW and its subsidiaries] shall not be affected by his participation in the Plan," that statement is qualified by the proviso "[s]ubject to the terms of the [RCA]." Id. § 2.3. In sum, there is no inconsistency and, under the plain terms of the contracts at issue, New York law governs Plaintiffs’ claims under the RCAs.
2. California Labor Code Section 925
Herriott's second argument — that Section 925 of the California Labor Code renders both the choice-of-law and forum-selection provisions in the RCAs void — requires little discussion. See Def.’s Opp'n 17-19; Def.’s Choice of Law Opp'n 5-7. Herriott contends that "[p]rior to any consideration of choice of law principles, ... the court should recognize that the illegal provision selecting New York law and forum has already been rendered void" by Section 925. Def.’s Choice of Law Opp'n 5-6. But this argument merely begs the question of whether California law, and thus Section 925, applies. And because this Court sits in New York and is exercising diversity jurisdiction, that question turns on an application of New York choice-of-law rules. See AEI Life LLC v. Lincoln Benefit Life Co. , 892 F.3d 126, 132 (2d Cir. 2018) ("At the outset of its analysis, a federal court sitting in diversity jurisdiction applies the choice of law rules of the forum state." (cleaned up)). If New York choice-of-law rules call for the Court to apply California law, then Section 925 would indeed apply and render the RCA's choice-of-law and forum-selection clauses void. But if New York choice-of-law rules call for the Court to apply New York law and the RCA clauses are enforceable under that law, then Section 925 would not come into the picture at all. See, e.g. , ABB Inc. v. Havtech, LLC ("ABB II "), 176 A.D.3d 580, 112 N.Y.S.3d 713, 714-15 (1st Dep't 2019) ("Non-New York statutes do not invalidate contracts that chose New York law and are valid and enforceable under New York law."); Gottwald v. Sebert ("Gottwald II "), 161 A.D.3d 679, 79 N.Y.S.3d 7, 8 (1st Dep't 2018) ("The court [below] properly denied Kesha leave to assert a counterclaim for declaratory relief terminating the agreements on the ground that they violate California Labor Code § 2855, as the unambiguous New York choice-of-law provisions contained in the agreements preclude the application of that California statute."). In that sense, Herriott's second and third argument are really one and the same.
3. New York Choice-of-Law Principles
Thus, the Court turns to Herriott's final argument: that New York choice-of-law rules call for application of substantive California law (including Section 925 ). "[A] complete application of New York choice of law principles," he contends, "dictates that California law should govern the PRSU, PSUAs and RCAs, as California has the most significant contacts with the matter in dispute, and because California has a materially greater interest in the litigation than New York. Moreover, the application of New York law will run contrary to the public policy of California." Def.’s Opp'n 19. But that argument is hard to square with the language of the RCAs, which provide that they are to be "governed by and construed in accordance with the laws of the state of New York, without regard to its conflicts of law principles ," RCA § 4.1 (emphasis added) — language that is all the more notable because "parties are not required to expressly exclude New York conflict-of-laws principles in their choice-of-law provision in order to avail themselves of New York substantive law," IRB-Brasil Resseguros, S.A. v. Inepar Invs., S.A. , 20 N.Y.3d 310, 316, 958 N.Y.S.2d 689, 982 N.E.2d 609 (2012). More significantly, it is based on an incorrect understanding of New York law as it exists today.
New York courts used to look to the kinds of considerations invoked by Herriott — significant contacts, interest in the litigation, and the public policy of the foreign jurisdiction — even when faced with a contract with a New York choice-of-law provision. See, e.g. , Beatie & Osborn LLP v. Patriot Sci. Corp. , 431 F. Supp. 2d 367, 378-82 (S.D.N.Y. 2006) ; Estee Lauder Cos. v. Batra , 430 F. Supp. 2d 158, 170-74 (S.D.N.Y. 2006) ; Prod. Res. Grp., L.L.C. v. Oberman , No. 03-CV-5366 (JGK), 2003 WL 22350939, at *8-11 (S.D.N.Y. Aug. 27, 2003). In 2012, however, the law took a turn when the New York Court of Appeals held that "the need for a conflict-of-laws analysis is obviated by the terms of the parties’ agreement" if "there is an express choice of New York law in [a] contract" meeting the requirements of General Obligations Law § 5-1401. IRB-Brasil Resseguros , 20 N.Y.3d at 312, 958 N.Y.S.2d 689, 982 N.E.2d 609. Three years later, the Court completed that turn, holding more broadly that "New York courts should not engage in any conflicts analysis where the parties include a choice-of-law provision in their contract, even if the contract is one that does not fall within General Obligations Law § 5-1401." Ministers & Missionaries Benefit Bd. v. Snow , 26 N.Y.3d 466, 474, 25 N.Y.S.3d 21, 45 N.E.3d 917 (2015). The Court reasoned that, "by including a choice-of-law provision in their contracts, the parties intended for only New York substantive law to apply." Id. at 475, 25 N.Y.S.3d 21, 45 N.E.3d 917. Thus, to apply New York's "conflict-of-laws principles, even if doing so results in the application of the substantive law of another state ... would contravene the primary purpose of including a choice-of-law provision in a contract — namely, to avoid a conflict-of-laws analysis and its associated time and expense. Such an interpretation would also interfere with, and ignore, the parties’ intent, contrary to the basic tenets of contract interpretation." Id. ; see also Deutsche Bank Nat'l Tr. Co. v. Barclays Bank PLC , 34 N.Y.3d 327, 340-41, 117 N.Y.S.3d 137, 140 N.E.3d 511 (2019) ("Choice-of-law provisions are intended to guarantee a uniform interpretation of contractual language.... Were we to ... apply[ ] California law (as plaintiff now urges us to do), we would contravene the parties’ clearly expressed intent that New York law govern the construction and interpretation of their agreements, an approach incompatible with our precedent.").
Lower federal and state courts have since observed that "[t]he language of Ministers is unequivocal and brooks no exceptions: ‘a New York choice-of-law clause in a contract ... demonstrates the parties’ intent that courts not conduct a conflict of laws analysis,’ and ‘obviates the application of both common-law conflict-of-laws principles and statutory choice-of-law directives ....’ " Mindspirit, LLC v. Evalueserve Ltd. , 346 F. Supp. 3d 552, 583 (S.D.N.Y. 2018) ; see, e.g. , Cotiviti, Inc. v. McDonald , No. 19-CV-6559 (VSB), 2021 WL 2784529, at *4 (S.D.N.Y. July 2, 2021) ; Capstone Logistics Holdings, Inc. v. Navarrete , No. 17-CV-4819 (GBD), 2018 WL 6786338, at *20-22 (S.D.N.Y. Oct. 25, 2018), aff'd and remanded in part on other grounds , 796 F. App'x 55 (2d Cir. 2020) (summary order); In re LIBOR-Based Fin. Instruments Antitrust Litig. , 299 F. Supp. 3d 430, 596 n.176 (S.D.N.Y. 2018) ; ABB II , 112 N.Y.S.3d at 714 ; 2138747 Ont., Inc. v. Samsung C & T Corp., 144 A.D.3d 122, 39 N.Y.S.3d 10, 15 (1st Dep't 2016), aff'd, 31 N.Y.3d 372, 78 N.Y.S.3d 703, 103 N.E.3d 774 (2018) ; Integra Optics, Inc. v. Messina , 41 N.Y.S.3d 719, 2016 WL 3917764, at *5 (Sup. Ct. 2016) (unpublished table decision), discussed in Mindspirit , 346 F. Supp. 3d at 583-84. Capstone is particularly instructive. Similar to this case, it involved a plaintiff employer seeking a preliminary injunction to enforce certain restrictive covenants against former employee defendants, who argued that California law should apply despite a contractual choice-of-law provision designating Delaware law. On remand to evaluate the impact of Ministers & Missionaries , the district court concluded that "New York courts no longer engage in any conflicts analysis where the parties have agreed to a valid choice of law provision." Capstone , 2018 WL 6786338, at *21. At most, the court observed, New York courts consider whether application of a contractual choice-of-law provision would violate the public policy of New York . "Since Ministers was handed down," the court continued, "the courts of New York have refused to consider the public policy of foreign states — including California — to overturn an otherwise valid contractual choice of law provision." Id. at *22 (emphasis omitted). "In other words, the question is not whether Delaware law would violate California’ s fundamental public policy, but rather whether it would violate New York's . This is particularly evident because a requirement that New York courts consider the fundamental public policy of a foreign law would swallow whole the Ministers holding that courts need not engage in conflicts analysis." Id. Noting that "there [wa]s no argument that application of Delaware law would violate New York's fundamental public policy," the court concluded that Delaware law governed. Id. Thus, Herriott's argument that California law should apply notwithstanding the New York choice-of-law provisions in the RCAs appears to be foreclosed by Ministers & Missionaries . Revealingly, Herriott's argument relies heavily on cases predating Ministers & Missionaries . See Def.’s Opp'n 19-21 (citing Oberman , 2003 WL 22350939, at *10 ; SG Cowen , 2000 WL 633434 ; Bus. Incentives Co. v. Sony Corp. of Am. , 397 F. Supp. 63, 67 (S.D.N.Y. 1975) ). These cases are no longer good law. To the extent Herriott cites more recent cases, he himself acknowledges that most of the courts involved failed to acknowledge the game-changing New York Court of Appeals decision and continued to rely on pre- Ministers & Missionaries authorities. See Def.’s Choice of Law Opp'n 3-4 (citing Medicrea USA, Inc. v. K2M Spine, Inc. , No. 17-CV-8677 (AT), 2018 WL 3407702, at *8-10 (S.D.N.Y. Feb. 7, 2018) ; Int'l Bus. Machs. Corp. v. Mueller , No. 14-CV-9221 (KMK), 2017 WL 4326114, at *4-7 (S.D.N.Y. Sept. 27, 2017) ; TGG Ultimate Holdings, Inc. v. Hollett , 224 F. Supp. 3d 275, 281-83 (S.D.N.Y. 2016) ; Canon U.S.A., Inc. v. Cavin's Bus. Sols., Inc. , 208 F. Supp. 3d 494, 504-05 (E.D.N.Y. 2016) ; Career Partners, Inc. v. Brady , No. 652451/2019, 2020 WL 149606, at *4-10 (N.Y. Sup. Ct. Jan. 13, 2020) ). The two lower state-court decisions on which Herriott relies that cite Ministers & Missionaries , see Def.’s Choice of Law Opp'n 3 (citing ABB, Inc. v. Havtech, LLC ("ABB I "), No. 650277/2018, 2019 WL 160415 (N.Y. Sup. Ct. Jan. 10, 2019), aff'd, 112 N.Y.S.3d 713, 176 A.D.3d 580, and Gottwald v. Sebert ("Gottwald I "), No. 653118/2014, 2017 WL 1062924 (N.Y. Sup. Ct. Mar. 20, 2017), aff'd, 161 A.D.3d 679, 79 N.Y.S.3d 7 ), do not, when their subsequent history is taken into account, even support Herriott's argument. Accordingly, the Court declines to rely on all of these decisions as well.
The district court subsequently granted permanent injunctive relief, Capstone Logistics Holdings, Inc. v. Navarrete , No. 17-CV-4819 (GBD) (BCM), 2020 WL 3429775 (S.D.N.Y. June 23, 2020), which the Second Circuit affirmed in relevant part in a summary order, albeit without discussion of the choice-of-law issues, Capstone Logistics Holdings, Inc. v. Navarrete , 838 F. App'x 588 (2d Cir. 2020) (summary order).
In Gottwald I , the trial court considered whether a New York choice-of-law clause could be enforced in light of an alleged conflict with California's public policy. The court upheld the choice-of-law provision after concluding there was no fundamental public policy of California implicated that was materially greater than New York's interest in enforcing the clause. See Gottwald I , 2017 WL 1062924, at *5-6. The Appellate Division affirmed, noting that "the unambiguous New York choice-of-law provisions contained in the agreements preclude the application of" California law and that "[t]here was no basis to invalidate the choice of law clauses." Gottwald II , 79 N.Y.S.3d at 8. Notably, for the latter point, the court cited Finucane v. Interior Construction Corp. , 264 A.D.2d 618, 695 N.Y.S.2d 322 (1st Dep't 1999), which considered only whether the public policy of New York would be violated by enforcement of the choice-of-law provision. See id. at 324-25 ("Where, as here, the parties have agreed on the law that will govern their contract, it is the policy of the courts of this State to enforce that choice of law, provided ... the law chosen does not violate a fundamental public policy of New York . " (emphasis added) (cleaned up)). Similarly, in ABB I , the trial court considered whether a New York choice-of-law clause could be enforced in the face of a contrary Maryland public policy, concluding that it could because the conflict did not rise to the level of an offense against public policy. See id. at *3-5. The Appellate Division affirmed, but its reasoning was conspicuously different. It noted that the trial court had "properly rejected the application of Maryland law" because the Court of Appeals has "ma[de] clear that no such choice of law analysis is proper in light of the clear choice of New York law." ABB II , 112 N.Y.S.3d at 714. Thus, it "reject[ed] defendant's argument that [it was] required to consider the public policy concerns of [Maryland] in determining this dispute," id. — precisely the argument that Herriott makes here.
Ironically, the best case for Herriott's position is one that neither he nor Willis Re cites: United States v. Moseley , 980 F.3d 9 (2d Cir. 2020). Moseley was a criminal case, in which the defendant had been convicted of operating an illegal payday-loan scheme. On appeal, he argued that the district court had erred in instructing the jury that New York usury laws applied to the loans he had made to borrowers in New York "because they gave no effect to the choice-of-law provisions set out in the loan agreements." Id. at 19. Applying New York choice-of-law rules, the Second Circuit rejected the argument on the ground that the choice-of-law provisions were unenforceable because they violated "a longstanding public policy in New York in favor of enforcing its usury laws to protect those of its residents who enter into consumer debt contracts." Id. at 22. Most notable for present purposes, the Court did not cite, let alone discuss, Ministers & Missionaries . Instead, it "described New York's general rule for assessing the effectiveness of contractual choice-of-law provisions as follows: ‘New York law is unambiguous in the area of express choice of law provisions in a contract. Absent fraud or violation of public policy, contractual selection of governing law is generally determinative so long as the State selected has sufficient contacts with the transaction.’ " Id. at 20 (quoting Int'l Minerals & Res., S.A. v. Pappas , 96 F.3d 586, 592 (2d Cir. 1996) ). The Circuit continued: "As to contracts that violate public policy, the New York Court of Appeals has accordingly explained that, ‘While parties are generally free to reach agreements on whatever terms they prefer, courts will not enforce [choice-of-law] agreements where the chosen law violates some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.’ " Id. (quoting Brown & Brown, Inc. v. Johnson , 25 N.Y.3d 364, 368, 12 N.Y.S.3d 606, 34 N.E.3d 357 (2015) ).
Moseley is difficult to square with Ministers & Missionaries given the New York Court of Appeals's emphasis on "the parties’ intent" and its unequivocal directive that "New York courts should not engage in any conflicts analysis where the parties include a choice-of-law provision in their contract." Ministers & Missionaries , 26 N.Y.3d at 474-75, 45 N.E.3d 917. Indeed, it is hard to avoid the conclusion that the Moseley Court simply overlooked Ministers & Missionaries and applied the wrong analysis under New York law. Nevertheless, this Court is technically bound to follow the Second Circuit's interpretation of New York law unless and until it is overruled by the Second Circuit itself or it is undermined by "a more recent decision regarding New York law from the New York Court of Appeals." Adebiyi v. Yankee Fiber Control, Inc. , 705 F. Supp. 2d 287, 291 n.4 (S.D.N.Y. 2010) (Sullivan, J.); accord Granite Enters. Ltd. v. Virgoz Oils & Fats Pte. Ltd. , No. 09-CV-4534 (RWS), 2010 WL 532310, at *1 (S.D.N.Y. Feb. 11, 2010) ; see Danaher Corp. v. Travelers Indem. Co. , 414 F. Supp. 3d 436, 457 (S.D.N.Y. 2019) (collecting cases). And neither the Second Circuit nor the New York Court of Appeals appears to have revisited the issue "more recent[ly]" than Moseley . Adebiyi , 705 F. Supp. 2d at 291 n.4. If applying the analysis in Moseley called for choosing California law in this case, therefore, the Court would be compelled to do so — even if Moseley was an incorrect interpretation of current New York law. Thankfully, however, Moseley also calls for application of New York law to the disputes in this case. Put differently, even if, notwithstanding Ministers & Missionaries , the Court were required to consider whether the choice-of-law provision is a "violation of public policy" or has "sufficient contacts with the transaction," Moseley , 980 F.3d at 20 (internal quotation marks omitted), these principles — properly understood — would call for applying New York substantive law.
Notably, the parties in Moseley did not cite Ministers & Missionaries in their briefs. See Reply Br. Def.-Appellant, Moseley , 980 F.3d 9, 2019 WL 3338046; Br. United States, Moseley , 980 F.3d 9, 2019 WL 2574385; Br. & Special App. Def.-Appellant, Moseley , 980 F.3d 9, 2019 WL 1385441.
First, even before Ministers & Missionaries , New York courts would "[g]enerally ... enforce a choice-of-law clause so long as the chosen law [bore] a reasonable relationship to the parties or the transaction." Welsbach Elec. Corp. v. MasTec N. Am., Inc. , 7 N.Y.3d 624, 629, 825 N.Y.S.2d 692, 859 N.E.2d 498 (2006) ; see TGG Ultimate Holdings, Inc. v. Hollett , No. 16-CV-6289 (VM), 2017 WL 1019506, at *4 (S.D.N.Y. Feb. 24, 2017) (explaining that the "reasonable relationship" and "substantial relationship" tests are "arguably indistinguishable"). Moreover, most courts "deemed one party's incorporation in the state of the parties’ chosen law sufficient for purposes of the ‘reasonable relationship’ test." EMA Fin., LLC v. NFusz, Inc. , 444 F. Supp. 3d 530, 540-41 (S.D.N.Y. 2020) (collecting cases). Here, Willis Re is a New York corporation with its principal place of business in New York. Compl. ¶ 3; Answer ¶ 3. Moreover, although Herriott is a California resident and worked in Willis Re's San Francisco office at all relevant times, he reported to Jim Bradshaw in New York from 2010 to 2021. Stip. ¶¶ 1-2. These contacts are enough to establish a reasonable basis for the parties’ choice of New York law. See, e.g. , Champion Auto Sales, LLC v. Polaris Sales Inc. , 943 F. Supp. 2d 346, 351 n.3 (E.D.N.Y. 2013) ("[A]s Polaris's principal place of business is in Minnesota, the state has sufficient contacts with the transaction." (citations omitted)); Beatie & Osborn , 431 F. Supp. 2d at 378 ("[T]he parties’ choice of New York law clearly has a reasonable basis: B & O is a New York limited liability partnership, is engaged in the practice of law in New York, and maintains its principal place of business in New York."); Cap Gemini Ernst & Young U.S. LLC v. Nackel , No. 02-CV-6872 (DLC), 2004 WL 569554, at *4 (S.D.N.Y. Mar. 23, 2004) ("Cap Gemini's headquarters and principal place of business are in New York. This fact alone is sufficient to establish a reasonable relationship between the law of New York and the Employment Agreement.").
Second, considerations of public policy would call for application of substantive New York law. Notably, in arguing otherwise, Herriott relies exclusively on the public policy of California . See Def.’s Opp'n 19-21; Def.’s Choice of Law Opp'n 1-5. He does not, and could not, argue that enforcing the RCAs’ choice-of-law provisions would violate New York public policy. See, e.g. , Mindspirit , 346 F. Supp. 3d at 583-84 ("[L]itigants cannot credibly claim that the application of New York law by a New York court would violate New York's public policy." (internal quotation marks omitted)). Under Moseley and New York Court of Appeals decisions before Ministers & Missionaries , however, the only public policy relevant to the analysis is the public policy "of this State " — that is, New York. Welsbach , 7 N.Y.3d at 632, 825 N.Y.S.2d 692, 859 N.E.2d 498 (emphasis added) (citing Cooney v. Osgood Mach., Inc. , 81 N.Y.2d 66, 80, 595 N.Y.S.2d 919, 612 N.E.2d 277 (1993) ); accord Moseley , 980 F.3d at 20 ; Brown & Brown , 25 N.Y.3d at 368-69, 12 N.Y.S.3d 606, 34 N.E.3d 357 ; Cap Gemini , 2004 WL 569554, at *5. And if that was likely the law before the New York Court of Appeals's groundbreaking decision in Ministers & Missionaries , it is certainly the law now because, as the court noted in Capstone , "a requirement that New York courts consider the fundamental public policy of a foreign law would swallow whole the Ministers holding that courts need not engage in conflicts analysis." Capstone , 2018 WL 6786338, at *22. To be sure, some courts, following the Restatement (Second) of Conflict of Laws , have stated that New York courts may refuse to enforce contractual choice-of-law provisions where "application of the chosen law would violate fundamental public policy of another jurisdiction with materially greater interests in the dispute. " Medicrea USA , 2018 WL 3407702, at *8 (emphasis added) (quoting Beatie & Osborn , 431 F. Supp. 2d at 378 ); see also TGG Ultimate Holdings , 224 F. Supp. 3d at 281-82 ; Oberman , 2003 WL 22350939, at *8. But these decisions largely predate Ministers & Missionaries . More recent New York court decisions that discuss a public policy exception have overwhelmingly invoked the approach in Welsbach and Brown & Brown — that only New York public policy is relevant — not that in the Restatement. See, e.g. , Askari v. McDermott, Will & Emery, LLP, 179 A.D.3d 127, 114 N.Y.S.3d 412, 428 (2d Dep't 2019) ; ABB II , 112 N.Y.S.3d at 714-15 ; Gottwald II , 79 N.Y.S.3d at 8 ; FIA Leveraged Fund Ltd. v. Grant Thornton LLP, 150 A.D.3d 492, 56 N.Y.S.3d 12, 18-19 (1st Dep't 2017) ; Van Wie Chevrolet, Inc. v. Gen. Motors, LLC, 145 A.D.3d 1, 38 N.Y.S.3d 662, 668-69 (4th Dep't 2016). This makes sense because relying on another state's public policy "to override the intent of the contracting parties," à la the Restatement , requires the court to consider "[f]irst," whether, "in the absence of the choice of law provision, [the other states’] law would apply"; "[s]econd," whether "the application of New York law would be contrary to a fundamental policy of [that other state]"; and "[t]hird," whether the other state "has a materially greater interest than New York in the determination of [the] dispute." Batra , 430 F. Supp. 2d at 170-71 ; see, e.g. , Beatie & Osborn , 431 F. Supp. 2d at 378-82. In other words, accepting Herriott's argument would require the Court to apply a traditional New York conflict-of-law analysis to determine whether California law would govern in the absence of the choice-of-law provision and, if so, to then consider whether California's fundamental public policy would be violated — exactly the type of analysis Ministers & Missionaries rejected. See Mindspirit , 346 F. Supp. 3d at 583.
Focus Financial Partners, LLC v. Holsopple , 241 A.3d 784, 802-22 (Del. Ch. 2020) — on which Herriott relies heavily because it applied Section 925 despite a Delaware choice-of-law contractual provision — is instructive. The court made clear that its consideration of Section 925 was part of its choice-of-law analysis under Delaware law, which "follows the Restatement (Second) of Conflict of Laws when determining what law governs a contract," id. at 803, and that it applied Section 925 to render the forum-selection clauses void only after determining that California law applied because enforcing the choice-of-law clause selecting Delaware law would violate California public policy, id. at 804 ("Here, the Delaware-Law Provisions in the Unit Agreements pass muster under Section 187(a) [of the Restatement ] but fail under Section 187(b). Focus Parent therefore cannot rely on the Delaware-Law Provisions to validate the Delaware-Forum Provisions. Under Section 925, the Delaware-Forum Provisions are voidable at Holsopple's request ...." (emphasis added)). Indeed, the twenty pages of thorough choice-of-law analysis undertaken by the Focus Financial court pursuant to the Restatement provides a vivid example of precisely what Ministers & Missionaries instructs New York courts not to do when confronted with a contractual choice-of-law provision.
In short, whether or not Ministers & Missionaries precludes consideration of public policy or the existence of a reasonable relationship, the result is the same: New York law applies to the parties’ disputes in this case.
C. A Preliminary Injunction with Respect to the California Action
For the foregoing reasons, New York law governs, so California law does not apply to void the RCAs’ exclusive forum-selection provisions; thus, any disputes arising from the RCAs must be heard by courts sitting in New York. As Herriott all but conceded, see Tr. 215-17, it follows that Plaintiffs are entitled to a preliminary injunction barring Herriott from prosecuting his claims in the California Action.
First, Plaintiffs are likely to succeed on the merits of their claim that, by filing the California Action, Herriott breached the forum-selection clauses of the RCAs, which unambiguously provide that "[a]ny suit, action or proceeding arising out of or relating to this RCA shall only be brought in the State and Federal Courts located in the County of New York, State of New York ...." RCA § 4.2 (emphasis added). Aside from pushing the argument that California law applies, Herriott properly raises only one other argument to the contrary: that the forum-selection clauses are unenforceable as a matter of federal law. See Tr. 215-17; see also Martinez v. Bloomberg LP , 740 F.3d 211, 217-18 (2d Cir. 2014) (explaining that, "[w]here a contract contains both a choice-of-law and a choice-of-forum clause," the enforceability of the forum-selection clause is governed by federal law, while the interpretation of the forum-selection clause is governed by the law chosen by the parties in the choice-of-law clause). Under federal law, however, there is "a strong presumption in favor of enforcement of freely negotiated contractual choice-of-forum provisions." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. , 473 U.S. 614, 631, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). That presumption is overcome only where "[a] contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought. " M/S Bremen v. Zapata Off-Shore Co. , 407 U.S. 1, 15, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972) (emphasis added). In other words, as with the public policy exception articulated in Brown & Brown and Welsbach , federal courts sitting in diversity in New York may refuse to enforce a contractual forum-selection provision if enforcing it would contravene New York's public policy; the public policy of California or any other state is irrelevant. See NuMSP, LLC v. St. Etienne , 462 F. Supp. 3d 330, 345 (S.D.N.Y. 2020) ("[I]n determining whether a forum selection provision is invalid, the Court focuses on the public policy of the forum state , not some other state."). As discussed above, the public policy of New York supports enforcement of the clauses here.
In his supplemental opposition brief, Herriott states — in a single sentence without any citation to legal authority — that "[t]he RCAs’ forum-selection clause is also unenforceable under federal law based on overreaching and because applying New York law in this forum deprives Herriott of any remedy." Def.’s Supp. Opp'n 15. To the extent these arguments are even independent from Herriott's others, they are too undeveloped to be considered. See, e.g. , Hancock v. Gen. Motors LLC (In re Gen. Motors LLC Ignition Switch Litig. ), Nos. 14-MD-2543 (JMF), 18-CV-1019 (JMF), 2021 WL 1415121, at *3 (S.D.N.Y. Apr. 14, 2021) ("Failure to adequately brief an argument constitutes waiver of that argument ...." (cleaned up)).
Second, Plaintiffs have established that they would suffer irreparable injury absent an injunction preventing Herriott from prosecuting the California Action. New York courts have repeatedly held "that a party's contractual right to resolve disputes in its bargained-for forum cannot be vindicated if the party is forced to litigate on two fronts with a risk of inconsistent rulings. Put differently, if litigation is permitted to proceed in a second forum, the benefit of a forum selection clause is irreparably lost." Sanford L.P. v. Esselte AB , No. 14-CV-7616 (VSB), 2015 U.S. Dist. LEXIS 193868, at *6-8 (S.D.N.Y. Sep. 16, 2015) (citations omitted). It follows that "dragging" Plaintiffs "into litigation in a court other than the court" for which they bargained "constitutes irreparable harm." Deutsche Mex. Holdings S.a.r.l. v. Accendo Banco, S.A. , No. 19-CV-8692 (AKH), 2019 WL 5257995, at *7 (S.D.N.Y. Oct. 17, 2019) ; accord Int'l Fashion Prod., B.V. v. Calvin Klein, Inc. , No. 95-CV-0982 (JFK), 1995 WL 92321, at *2 (S.D.N.Y. Mar. 7, 1995) (finding the defendant "would suffer irreparable harm by being forced to" litigate in another forum where "the agreement at issue clearly states that New York is the chosen forum for all disputes"). Notably, Herriott does not really argue otherwise. Instead, he seeks to distinguish the cases Plaintiffs cite on the grounds that they did not involve any analogue to Section 925 or California's public policy concerns. See Def.’s Opp'n 10-11. As noted, however, California law and public policy are irrelevant to the analysis.
Finally, the public interest and balance of equities favor enforcement of the forum-selection clause. As a matter of both federal law and New York law, there is a strong public policy of enforcing forum-selection clauses because they "have the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum and conserving judicial resources that otherwise would be devoted to deciding those motions. They also further vital interests of the justice system, including judicial economy and efficiency." Magi XXI, Inc. v. Stato della Citta del Vaticano , 714 F.3d 714, 722 (2d Cir. 2013) (cleaned up); see also, e.g. , Bank Leumi USA v. Ehrlich , No. 12-CV-4423 (AJN), 2015 WL 12591663, at *6 (S.D.N.Y. Sept. 23, 2015) ("New York has a well-established public policy of enforcing forum selection agreements." (internal quotation marks omitted)). Similarly, the balance of equities tips in favor of injunctive relief because Willis Re would be deprived of the contractually designated forum to which Herriott agreed. See, e.g. , Goldman, Sachs & Co. v. Golden Empire Sch. Fin. Auth. , 922 F. Supp. 2d 435, 444 (S.D.N.Y. 2013) (holding that the balance of hardship favored enjoining an arbitration proceeding in contravention of a forum-selection clause because the parties "contracted to settle their disputes in the Southern District, [so] denying an injunction would grant [the defendant] a windfall in the form of its preferred forum" (internal quotation marks omitted)), aff'd , 764 F.3d 210 (2d Cir. 2014) ; Madden Int'l, Ltd. v. Lew Footwear Holdings Pty Ltd. , 36 N.Y.S.3d 48, 2016 WL 237637, at *6 (Sup. Ct.) (unpublished table decision) (enforcing a forum-selection clause where the defendant had "freely agreed to be bound by New York law in its dealings with [the plaintiff], and to resolve any differences in the New York courts," but "rather than stand by this contractual commitment," had "purposefully flouted it"), aff'd, 143 A.D.3d 418, 38 N.Y.S.3d 178 (1st Dep't 2016).
In short, Plaintiffs are entitled to preliminary injunctive relief barring Herriott from prosecuting the California Action or otherwise violating the forum-selection clauses.
D. A Preliminary Injunction with Respect to Dealings with Relevant Clients
Plaintiffs are also entitled to a preliminary injunction enforcing the non-solicitation provisions of the RCAs with respect to Relevant Clients. Significantly, however, the definition of "Relevant Client" is not quite as broad as Plaintiffs contend.
1. Relevant Clients
The Court begins by addressing the meaning of "Relevant Client," as it arguably bears on the reasonableness — and thus enforceability — of the restrictive covenant and has been a major bone of contention between the parties. see Def.’s Supp. Opp'n 14-15 (opposing the injunction based in part on the ground that "Willis’ interpretation of the term ‘Relevant Client’ " is too expansive); Tr. 214 (defense counsel asserting that clarification of the term "Relevant Client" is "imperative"). Indeed, the parties’ differing views of which clients qualify as "Relevant" within the meaning of the RCAs have already spawned one contempt hearing.
As noted above, the RCAs define "Relevant Client" as
any person, firm or company who or which at any time during the period of twelve (12) months prior to the date on which [Herriott] ceases to be employed by [Willis Re] [1] is or was a client or customer of [WTW or its subsidiaries] or was in the habit and/or practice of dealing under contract with [WTW or its subsidiaries] and [2] [a] with whom or which [Herriott] had dealings related to the Business or [b] for whose relationship with [WTW and its subsidiaries Herriott] had responsibility at any time during the said period.
RCA § 2.12. Thus, there are two ways a Willis Re client can qualify as a Relevant Client with respect to Herriott: (1) if Herriott had "dealings related to the Business" with the client between January 21, 2020, and January 21, 2021 (with "Business" being defined to include the "reinsurance brokerage" business "performed by" WTW and its subsidiaries); or (2) if Herriott "had responsibility" for the "relationship" between WTW/Willis Re and the client "at any time" between January 21, 2020, and January 21, 2021. RCA § 2.12.
Plaintiffs maintain, as they did at the contempt hearing, that all of Willis Re's healthcare segment clients during the year before Herriott's departure qualify as Relevant Clients within the meaning of this definition by virtue of his general responsibilities, including his role as sales director, his participation in (and occasional leadership of) the weekly healthcare segment meetings, and his position on the executive committee. See, e.g. , Bradshaw Aff. ¶¶ 40, 48, 56, 67, 82, 104, 141; Apr. 19, 2021 Tr. 11-12. As the Court explained at the conclusion of the contempt hearing, however, Plaintiffs’ focus on Herriott's general responsibilities "misses the mark because the relevant question under the restrictive covenants is whether he had responsibility for the clients’ ‘relationship with Willis Re’ " or had "dealings related to the Business" with the client. Apr. 19, 2021 Tr. 50-51 (emphasis added). Witnesses at both the contempt hearing and the preliminary injunction hearing were consistent in testifying "to the difference between" Herriott's "internal facing responsibilities" as sales director and as a member of the executive committee and an employee's external "responsibility for the relationship with a client." Id. Given that distinction, "it would stretch the meaning of [the contractual] terms beyond the breaking point to hold that someone in Mr. Herriott's circumstances is responsible for the relationship with any particular client merely by virtue of his general responsibilities. Similarly, someone who did not have contacts with a particular client cannot be said to have had ‘dealings related to the business’ with them." Id. at 51. For these reasons, there is no basis to conclude that all of Willis Re's healthcare segment clients during the year before Herriott's departure qualify as Relevant Clients within the meaning of the RCAs. Plaintiffs stretch the definition of Relevant Client too far as well in arguing that it includes any client that had a representative in attendance at the dinner Willis Re hosted in March 2020 during the MPLA conference. See Tr. 218-19. They contend that mere attendance at the dinner with Herriott by itself rises to the level of "dealings related to the Business" within the meaning of the RCAs. But the Court is unpersuaded. With respect to the MMLIM representative in attendance, for example, Herriott testified credibly that he "might have said hello" and did not have any conversation related to MMLIM's business. See Tr. 38-39 (testimony of Herriott). With respect to the ProAssurance representative, he testified that they spoke about Herriott joining a wine club and that they "[a]bsolutely [did] not" discuss anything related to ProAssurance's business. Id. at 50-51 (testimony of Herriott). And Herriott could not recall having any interaction whatsoever with respect to the Constellation/MMIC representative, id. at 40 (testimony of Herriott), and could only "[v]aguely" recall whether a KAMMCO representative was even in attendance (and, if one was, they exchanged no more than introductions), id. at 44 (testimony of Herriott). This uncontroverted testimony establishes that the interactions at the March 2020 dinner — to the extent they even occurred — were social in nature and did not constitute "dealings related to the Business" within the meaning of the RCAs.
For the same reasons, there is no merit to Plaintiffs’ suggestion that clients merely mentioned in internal Willis Re email communications to which Herriott was a party are Relevant Clients. See Bradshaw Aff. ¶¶ 123, 128, 134; Tr. 123-30 (testimony of Bradshaw); PX137; PX178; PX191. Herriott did acknowledge having business dealings with two such entities, ProAssurance and Sompo/Endurance, but in his capacity as a reinsurance broker for another client — that is, he placed another entity's reinsurance with them. Tr. 25-26, 49. In these dealings, therefore, ProAssurance and Sompo/Endurance were not acting as "clients" of Willis Re at all. Accordingly, these dealings do not result in their qualifying as Relevant Clients. Notably, Plaintiffs themselves do not really argue otherwise.
In light of the foregoing, there is only a limited universe of Willis Re clients that could even arguably qualify as Relevant Clients for Herriott's purposes — and even fewer as to which there is an actual argument. For starters, the parties agree that MLM, CAP, CHI, Berkley Design, and HAPI are all Relevant Clients. Stip. ¶¶ 27, 35, 42, 71, 75. Additionally, there is no real (let alone reasonable) dispute that NORCAL and Berkley Healthcare qualify, as Herriott served as client advocate for both — and thus had responsibility for Willis Re's relationship with both — while at Willis Re in 2020. See Stip. ¶ 63; Tr. 9 (testimony of Herriott); id. at 105 (testimony of Bradshaw). That leaves only two clients in dispute: MagMutual and the Mutual. Plaintiffs contend that Herriott's late 2020 interactions with them — namely, the October 2020 get-together with Everett (of the Mutual) and the planned December 2020 dinner with Morrell (of MagMutual) — constitute "dealings related to the Business." At the contempt hearing, the Court rejected that argument. Apr. 19, 2021 Tr. 52. But significantly, in doing so, the Court rested heavily on the heightened standard that applies to a contempt motion, which requires the moving party to present clear-and-convincing evidence of a violation of a clear and unambiguous court order. See Paramedics Electromedicina Comercial , 369 F.3d at 655 ; Levin v. Tiber Holding Corp. , 277 F.3d 243, 250 (2d Cir. 2002). That burden does not apply here. Instead, Plaintiffs need only demonstrate a likelihood of success in eventually proving their case by a preponderance of the evidence.
MLM, CHI, and CAP left for TigerRisk, while Berkley Design and HAPI remain Willis Re clients. See Stip ¶¶ 29, 38, 44; Bradshaw Aff. ¶¶ 135, 138.
NORCAL has since been acquired by another entity, while Berkley Healthcare left for a competitor of both Willis Re and TigerRisk. See Tr. 45-46 (testimony of Herriott); id. at 131-32 (testimony of Bradshaw).
That said, the Court reaches the same conclusion here with respect to MagMutual as it did at the contempt hearing. The evidence at the contempt and preliminary injunction hearings showed that the only actual "dealing" between Herriott and Morrell was the September 2020 virtual cocktail hour that both attended. But both testified credibly that the event was purely social. See Morrell Contempt Aff. ¶ 6; First Herriott Contempt Aff. ¶ 11 n.2. Thus, it did not qualify as "dealings related to the Business" within the meaning of the RCAs. Beyond that, the record reflects only one specific instance of dealings or communications between Herriott and Morrell: the dinner planned for December 2020 in Miami. See Herriott Contempt Aff. ¶¶ 10-11; Apr. 15, 2021 Tr. 41 (testimony of Herriott); id. at 207-08 (testimony of Bradshaw); Apr. 19, 2021 Tr. 52. Had that dinner happened, the Court might well have concluded that MagMutual qualified as a Relevant Client — even though both Herriott and Morrell credibly testified that the dinner was primarily to be social in nature. See First Herriott Contempt Aff. ¶ 11; Morrell Contempt Aff. ¶ 7; Apr. 15, 2021 Tr. 39-40 (testimony of Herriott); id. at 155-56, 167 (testimony of Morrell). After all, Herriott "did concede that there was at least some business purpose to the dinner. Moreover, Mr. Herriott was one of four then[-]Willis Re employees set to attend, including MagMutual's two client[ ] advocates, and Willis Re of course approved and was set to pay expenses for the trip." Apr. 19, 2021 Tr. 52-53. But the dinner in Miami did not happen because the trip was cancelled. First Herriott Contempt Aff. ¶ 11; Morrell Contempt Aff. ¶ 7. A hypothetical dinner plainly does not qualify as "dealings related to the Business." Nor do whatever incidental communications Herriott and Morrell may have exchanged in connection with planning the dinner. Thus, based on the record developed thus far in this case, it cannot be said that MagMutual is a Relevant Client.
By contrast, in light of the lower burden that applies in this posture, the Court finds that the Mutual is a Relevant Client based on Herriott's get-together with Everett, the Mutual's CEO, in October 2020. Yes, both Herriott and Everett testified that the get-together was primarily social in nature. See First Herriott Contempt Aff. ¶¶ 15-17; Everett Contempt Aff. ¶¶ 2-3; Apr. 15, 2021 Tr. 52-54 (testimony of Herriott); id. at 147-48 (testimony of Everett). But the evidence is undisputed that it also "had some business purpose given that, among other things, the topic of advance video presentations for reinsurance meetings was discussed." Apr. 19, 2021 Tr. 53-54 (internal quotation marks omitted). Additionally, Herriott paid for the drinks and was reimbursed for that expense by Willis Re. Bradshaw Aff. ¶ 64; Apr. 15, 2021 Tr. 149 (testimony of Everett). And shortly after the get-together, Herriott scheduled a meeting with Wendland, the Mutual's client advocate, titled "The Mutual catchup." PX181; PX182; Apr. 15, 2021 Tr. 54-55 (testimony of Herriott). At the contempt hearing, the Court concluded that this evidence did not satisfy Plaintiffs’ "high burden" to "show by clear and convincing evidence, a violation of a court order that is clear and unambiguous and that Mr. Herriott ha[d] not diligently attempted to comply in a reasonable manner." Apr. 19, 2021 Tr. 54. But even with that high burden, the Court described the call as a close one. See id. (explaining that the argument that the Mutual was a Relevant Client "ha[d] more force" than the arguments with respect to the other clients at issue). Faced with the lower burden here, Plaintiffs now have the better of the argument because a factfinder is likely to find that Herriott's dealings with Everett rise to the level of "dealings related to the Business" within the meaning of the RCAs.
That conclusion is reinforced by comparison of the RCAs’ definitions of "Relevant Client" and "Relevant Prospect." Both are limited to entities with whom or with which Herriott "had dealings related to the Business." See RCA §§ 2.12, 2.14. Significantly, however, the definition of "Relevant Prospect" then contains the following caveat: "(other than in a minimal and non-material way)." RCA § 2.14. The absence of the same caveat from the definition of "Relevant Client" strongly suggests that "minimal" or "non-material" dealings related to the Business, would, in fact, qualify. Otherwise, the additional language in the definition of "Relevant Prospect" would be superfluous, in contravention of basic principles of contract interpretation under New York law. See Net2Globe Int'l, Inc. v. Time Warner Telecom of N.Y. , 273 F. Supp. 2d 436, 445 (S.D.N.Y. 2003) ("It is axiomatic under New York law that courts interpret a contract so as to give effect to all of its provisions and ‘cannot and should not accept an interpretation that ignores the interplay of the terms, renders certain terms "inoperable," and creates a conflict where one need not exist.’ " (quoting Pearce, Urstadt, Mayer & Greer Realty Corp. v. Atrium Dev. Assocs. , 77 N.Y.2d 490, 497, 568 N.Y.S.2d 890, 571 N.E.2d 60 (1991) (Kaye, J., dissenting))). Thus, the Court concludes that Plaintiffs are likely to succeed in proving that the Mutual is a Relevant Client within the meaning of the RCAs.
In sum, the record reflects that the following entities (and only the following entities) can be considered Relevant Clients for purposes of Plaintiffs’ current motion: MLM, CAP, CHI, HAPI, Berkley Design, Berkley Healthcare, NORCAL, and the Mutual.
2. Likelihood of Success on the Merits
With that, the Court turns to whether Plaintiffs have demonstrated a likelihood of succeeding on the merits of their claim that Herriott has breached the restrictive covenant. Under New York law, "[t]he issue of whether a restrictive covenant not to compete is enforceable by way of an injunction depends in the first place upon whether the covenant is reasonable in time and geographic area." Ticor Title Ins. Co. v. Cohen , 173 F.3d 63, 69 (2d Cir. 1999) (citing Reed, Roberts Assocs. v. Strauman, 40 N.Y.2d 303, 307, 386 N.Y.S.2d 677, 353 N.E.2d 590 (1976) ). "In determining whether a restrictive covenant is reasonable, courts must balance the employer's legitimate business concerns with New York's strong public policy against causing a person to lose the ability to earn a livelihood." Mercer Health & Benefits LLC v. DiGregorio , 307 F. Supp. 3d 326, 349 (S.D.N.Y. 2018). "A restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public." BDO Seidman v. Hirshberg , 93 N.Y.2d 382, 388-89, 690 N.Y.S.2d 854, 712 N.E.2d 1220 (1999) ; see also Int'l Bus. Machs. Corp. v. Lima , 833 F. App'x 911, 912 (2d Cir. 2021) (summary order) ("A restrictive covenant between an employer and employee ‘will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer's legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.’ " (quoting Reed, Roberts , 40 N.Y.2d at 307, 386 N.Y.S.2d 677, 353 N.E.2d 590)). "The New York Court of Appeals has held that one legitimate interest of the employer is protection of customer relationships the employee acquired in the course of employment," because "when the employee must work closely with the client or customer over a long period of time, then the employee has been enabled to share in the goodwill of a client or customer which the employer's over-all efforts and expenditures created." Kelley-Hilton v. Sterling Infosystems Inc. , 426 F. Supp. 3d 49, 57 (S.D.N.Y. 2019) (cleaned up); accord Marsh USA Inc. v. Karasaki , No. 08-CV-4195 (JGK), 2008 WL 4778239, at *16 (S.D.N.Y. Oct. 31, 2008) ("[I]t is now clear that under New York law an employer also has a legitimate interest in protecting client relationships developed by an employee at the employer's expense.") (quoting Johnson Controls, Inc. v. A.P.T. Critical Sys., Inc. , 323 F. Supp. 2d 525, 534 (S.D.N.Y. 2004) ). "New York courts therefore reason that ‘[t]he employer has a legitimate interest in preventing former employees from exploiting or appropriating the goodwill of a client or customer, which had been created and maintained at the employer's expense, to the employer's competitive detriment.’ " Kelley-Hilton , 426 F. Supp. 3d at 57 (quoting BDO Seidman , 93 N.Y.2d at 392, 690 N.Y.S.2d 854, 712 N.E.2d 1220 ). At the same time, "New York law provides that covenants not to compete should be strictly construed because of the powerful considerations of public policy which militate against sanctioning the loss of a person's livelihood." Brown & Brown , 25 N.Y.3d at 370, 12 N.Y.S.3d 606, 34 N.E.3d 357 (cleaned up).
Applying these standards here, the Court concludes that the restrictive covenants are enforceable under New York law. First, there is no dispute that they protect Willis Re's "legitimate interest in protecting client relationships developed by" Herriott at the company's "expense." Karasaki , 2008 WL 4778239, at *16 (internal quotation marks omitted); see Stip. ¶¶ 10-11. Second, because they are client-specific, they are reasonable in geographic scope, notwithstanding the broad definition of "Relevant Area" in the RCAs. See, e.g. , Karasaki , 2008 WL 4778239, at *16 ("New York state courts have upheld non-solicitation agreements imposing client-based restrictions without geographic limitation as reasonable in scope." (collecting cases)); accord Marsh USA Inc. v. Schuhriemen , 183 F. Supp. 3d 529, 535 (S.D.N.Y. 2016) ; see also Alves v. Affiliated Home Care of Putnam, Inc. , No. 16-CV-1593 (KMK), 2017 WL 4350283, at *4 (S.D.N.Y. Sept. 28, 2017) (enforcing a restrictive covenant that "by its plain terms, ... contains no limit to its geographic scope" because "the covenant only applies to clients of [the employer] to whom Plaintiff had been assigned" (cleaned up)). And third, "New York courts addressing twenty-four month restrictions on solicitation of former clients in the insurance industry have found them to be reasonable." DeWitt Stern Grp., Inc. v. Eisenberg , No. 13-CV-3060 (RWS), 2013 WL 2420835, at *4 (S.D.N.Y. June 4, 2013) (cleaned up); see also Kelley-Hilton , 426 F. Supp. 3d at 54, 59-60 (upholding a two-year non-solicitation agreement and collecting cases); USI Ins. Servs. LLC v. Miner , 801 F. Supp. 2d 175, 188 (S.D.N.Y. 2011) (collecting cases); Willis of N.Y., Inc. v. DeFelice , 299 A.D.2d 240, 750 N.Y.S.2d 39, 41 (1st Dep't 2002) (holding that a twenty-four month non-solicitation agreement for a high-level insurance broker was reasonable). Indeed, "[s]uch agreements are not found overbroad even if they would prohibit the employee from accepting business from former clients who voluntarily and without any solicitation chose to continue to do business with the employee." DeWitt Stern , 2013 WL 2420835, at *4 (cleaned up).
Plaintiffs have expressly disclaimed seeking injunctive relief enforcing the non-solicitation provisions related to "Relevant Prospects," see Pls.’ Reply 1 n.2, and accordingly the Court need not and does not address those provisions here. Nevertheless, the Court notes that some courts have found similar provisions to be unenforceable under New York law. See, e.g. , DiGregorio , 307 F. Supp. 3d at 350-51 (S.D.N.Y. 2018) ; Schuhriemen , 183 F. Supp. 3d at 535-37 ; Karasaki , 2008 WL 4778239, at *17 ; Johnson Controls , 323 F. Supp. 2d at 540.
Nor would Herriott suffer undue hardship from enforcement of the Relevant Client non-solicitation covenants. Indeed, "New York courts have routinely found that an individual does not suffer undue hardship where a restrictive covenant merely prohibits him from soliciting his former employer's clients for a reasonably defined period of time." DiGregorio , 307 F. Supp. 3d at 351 (cleaned up); see USI Ins. Servs. , 801 F. Supp. 2d at 190 (finding no undue burden where "[the plaintiff-employer] is not seeking to preclude [the defendant-former employee] from working as an insurance producer for [his new employer]"; the plaintiff "instead seeks only to preclude [the defendant] from soliciting or servicing [its] former ... clients"); Karasaki , 2008 WL 4778239, at *18 (similar). And finally, enforcement of the restrictive covenants through an injunction would not be injurious to the public since, among other things, Herriott may, even now, pursue any client other than those few that qualify as Relevant Client. In fact, " ‘[i]f anything, the public interest would be advanced by such an injunction, because, on the facts here, such an injunction would tend to encourage parties to abide by their agreements.’ " DiGregorio , 307 F. Supp. 3d at 351 (quoting Uni-World Cap. L.P. v. Preferred Fragrance, Inc. , 73 F. Supp. 3d 209, 237 (S.D.N.Y. 2014) ); see also Frantic, LLC v. Konfino , No. 13-CV-4516 (AT), 2013 WL 5870211, at *5 (S.D.N.Y. Oct. 30, 2013) ("Although courts generally disfavor broad restraints on competition, there is no indication the Agreement will cause significant dislocation in the market or create a monopoly in the computer troubleshooting industry.... The Court holds, therefore, that the Agreement is not injurious to the public.").
Herriott's last two arguments on the merits can be swiftly addressed. First, citing the fact that Willis Re's clients paid their fees up front, Herriott argues that Plaintiffs had already earned all of their fees from CHI, CAP, and MLM as of the date of the hearing and, thus, cannot prove that they suffered damages, let alone damages caused by his breach of the parties’ contracts. See Def.’s Supp. Opp'n 6-8. To satisfy the merits prong of the preliminary injunction test, however, a plaintiff seeking to enforce a restrictive covenant need only show a likelihood of success on the merits of its claims that the covenants are enforceable and that the defendant breached them. See, e.g. , DiGregorio , 307 F. Supp. 3d at 348-53 ; Schuhriemen , 183 F. Supp. 3d at 532-36 ; DeWitt Stern , 2013 WL 2420835, at *4-5 ; Karasaki , 2008 WL 4778239, at *15-21 ; Johnson Controls , 323 F. Supp. 2d at 533-40. Herriott has not cited, and the Court has not found, any authority for the proposition that a court should also look to whether the plaintiff is likely to prove damages. In any event, Plaintiffs have shown non-speculative and quantifiable damages. For example, the evidence showed that MLM had been a Willis Re client since 2012, Bradford Aff. ¶ 36; Stip. ¶¶ 26-27; that Herriott breached the RCAs by soliciting MLM's business after leaving Willis Re, Stip. ¶ 28; that MLM then left Willis Re and issued a BOR naming TigerRisk as its broker; and that MLM's contract was up for renewal on July 1, 2021, id. ¶ 31. Although insurance companies are free to change their insurance broker at any time, id. ¶ 22, the business is "sticky" and clients tend to place their reinsurance needs through the same broker year after year, evidenced by the length of time many of the insurance companies at issue here were clients of Willis Re, including MLM itself, Tr. 140 (testimony of Bradshaw); Bradshaw Aff. ¶¶ 36, 44, 52, 60, 70. In short, Plaintiffs established that they likely lost out on the fees they would otherwise have earned when MLM was up for renewal on July 1, 2021.
When pressed at oral argument, see Tr. 204, Herriott cited two cases, Grand River v. Pryor , 481 F.3d 60, 66 (2d Cir. 2007), and Fisheries Survival Fund v. Jewell , 236 F. Supp. 3d 332, 337 (D.D.C. 2017), but neither supports the proposition. The passages cited by Herriott refer explicitly to the "irreparable harm requirement," which is discussed below.
Finally, Herriott argues that Plaintiffs cannot prove that his departure alone caused any Relevant Client to leave Willis Re. See Def.’s Supp. Opp'n 8-9. Once again, however, Herriott overstates Plaintiffs’ burden. Courts routinely grant preliminary injunctions based on a showing that the defendant solicited clients in violation of a reasonable restrictive covenant, without delving into questions of causation. See, e.g. , Schuhriemen , 183 F. Supp. 3d at 532-36 ; Uni-World , 73 F. Supp. 3d at 234 ; Karasaki , 2008 WL 4778239, at *19. After all, most restrictive covenants, like the ones here, are not limited to successful competition; they prohibit all competition within their scope. See Uni-World , 73 F. Supp. 3d at 234. In any event, "the causation test does not require a breach to be the sole cause of a party's damages." Wilder v. World of Boxing LLC , 310 F. Supp. 3d 426, 446-47 (S.D.N.Y. 2018) (internal quotation marks omitted), aff'd, 777 F. App'x 531 (2d Cir. 2019) (summary order). Instead, a plaintiff need only show that the defendant's breach was "a substantial factor in producing those damages. If the damages are the natural and probable consequence of the breach, then the defendant's actions are a proximate cause of that injury, even if other factors also contributed." Bank Midwest, N.A. v. Hypo Real Est. Cap. Corp. , No. 10-CV-232 (WHP), 2010 WL 4449366, at *3 (S.D.N.Y. Oct. 13, 2010) (cleaned up). Measured against that standard, Plaintiffs have indeed shown that Herriott's breach caused them damages. For example, it is undisputed that Herriott solicited the Mutual's business after leaving Willis Re and that the Mutual — which had been a Willis Re client since 2007 — later issued a BOR to Herriott naming TigerRisk as its reinsurance broker. Stip. ¶¶ 48, 51-52. Everett, the Mutual's CEO, testified that she was comfortable issuing the BOR because she believed Herriott could handle the Mutual's account. See Apr. 15, 2021 Tr. 146-47 (testimony of Everett). It follows that a finder of fact would likely determine that Herriott's breach of the restrictive covenants was a substantial factor in causing the Mutual's departure.
3. Irreparable Harm
Next, Plaintiffs have also demonstrated that they are likely to suffer irreparable harm in the absence of injunctive relief. "It is well established in this Circuit that the loss of client relationships and customer goodwill that results from the breach of a non-compete clause generally constitutes irreparable harm." DiGregorio , 307 F. Supp. 3d at 347 ; accord Schuhriemen , 183 F. Supp. 3d at 536 ; Johnson Controls , 323 F. Supp. 2d at 532 (collecting cases). That is because "it would be very difficult to calculate monetary damages that would successfully redress the loss of a relationship with a client that would produce an indeterminate amount of business in years to come." Ticor , 173 F.3d at 69. That is precisely the situation here. Reinsurance brokers typically earn fees on an annual basis, and their clients are free to switch reinsurance brokers at any time. Nevertheless, the business is sticky and the insurance company clients tend to develop long-term relationships with their reinsurance brokers, placing coverage through them year after year — as evidenced by the multiyear relationships that each of the Relevant Clients at issue had enjoyed with Willis Re. Thus, "[t]he total monetary value of [Willis Re's] loss of client[s] would be very difficult, if not impossible, to calculate with any exactitude. Nor could the lost goodwill that [Willis Re] has built with these clients be easily quantified and compensated." Karasaki , 2008 WL 4778239, at *14 ; see DiGregorio , 307 F. Supp. 3d at 347 (explaining that the plaintiff's "loss of current clients and goodwill resulting from the defendants’ alleged breaches of their non-solicitation agreements is no exception" to the proposition stated in Ticor ); cf. Tradition Chile agentes de Valores Ltda. v. ICAP Sec. USA LLC , No. 09-CV-10343 (WHP), 2010 WL 185656, at *3 (S.D.N.Y. Jan. 12, 2010) (finding that the plaintiffs could not establish irreparable harm where the broker-dealer plaintiff had "calculated the daily losses ... with great precision" and was required by federal regulations to maintain highly detailed transaction records). Willis Re "has also been deprived of the time and opportunity to transition clients from [Herriott] to other [Willis Re] employees without interference," DiGregorio , 307 F. Supp. 3d at 348, which some courts have recognized as a form of irreparable harm, see, e.g. , Johnson Controls , 323 F. Supp. 2d at 532.
In addition, in Section 3.6 of the RCAs, Herriott "recognize[d] and agree[d] that the payment of damages will not be an adequate remedy for any breach by [him] of any of the covenants set forth in Section 3 of this RCA" and "recognize[d] that irreparable injury will result to [WTW and its subsidiaries] in the event of any such breach and therefore [Herriott] agree[d] that [WTW] may, in addition to recovering damages, proceed in equity to enjoin [Herriott] from violating any such covenant." RCA § 3.6. Such language "does not control whether injunctive relief is appropriate," but it "is one factor that must be considered in deciding whether irreparable harm would result if an injunction did not issue." Deutsche Mex. Holdings , 2019 WL 5257995, at *8 (cleaned up); see, e.g. , DiGregorio , 307 F. Supp. 3d at 348 ("In the Second Circuit, such contractual provisions, while not dispositive, support a finding of irreparable harm." (collecting cases)); BDC Mgmt. Servs., LLC v. Singer, 144 A.D.3d 597, 41 N.Y.S.3d 419 (1st Dep't 2016) (finding irreparable harm where "the parties agreed in the sale agreement that a breach of the non-compete provision would cause irreparable injury and that injunctive relief would be appropriate in the event of such a breach"). Indeed, in Ticor , the Second Circuit found it significant that "the employment contract sought to be enforced concede[d] that in the event of [the defendant's] breach of the post-employment competition provision, [the plaintiff] shall be entitled to injunctive relief, because it would cause irreparable injury." 173 F.3d at 69. The Court explained that this provision "might arguably be viewed as an admission by [the defendant] that [the] plaintiff will suffer irreparable harm were he to breach the contract's non-compete provision." Id. So too here.
Herriott argues that "regardless of whether an injunction is in place, the Court's rulings" — as to the enforceability of the RCAs and as to which entities constitute Relevant Clients — "are clear" and, thus "there is no reason to doubt Herriott will comply with them." Def.’s Supp. Opp'n 17. But to the list of Relevant Clients acknowledged by Herriott, the Court today adds the Mutual, and there is no indication in the record that Herriott has ceased providing services to the Mutual in violation of his restrictive covenants. Moreover, Herriott concededly solicited CHI, CAP, and MLM prior to the entry of the TRO. And HAPI and Berkley Design, both Relevant Clients, remain clients of Willis Re. See Bradshaw Aff. ¶¶ 135, 138. The mere fact that Herriott may not have violated the TRO entered to date does not counsel against the need for injunctive relief pending the outcome of this case. See Nat'l Chemsearch Corp. v. Easton Chem. Co. , No. 68-CV-4865, 1969 WL 9541, at *2 (S.D.N.Y. Jan. 16, 1969) ("The cessation of the offending activities after suit has been begun is not in itself decisive ground for denying injunctive relief which is otherwise appropriate. Moreover, the fact that defendants are prepared on their own to do substantially what an injunction will require is at least some indication that the hurt to them from being restrained is likely to be bearable." (citation omitted)). Were it otherwise, plaintiffs would rarely succeed in obtaining preliminary injunctions after getting TROs.
In sum, Plaintiffs have shown that they are likely to suffer irreparable harm — in the form of lost client relationships (and the associated indeterminate amount of business and loss of goodwill) and loss of the opportunity to transition responsibility for client relationships internally without interference — in the absence of injunctive relief.
4. The Balance of Equities and Public Interest
Finally, both the balance of equities and public interest weigh in favor of an injunction. With respect to the former, the prohibition on soliciting or servicing Relevant Clients will not cause "great hardship" for Herriott given that it is temporary, and the category encompasses only a relatively small group of entities. Schuhriemen , 183 F. Supp. 3d at 536-37. The injunction does not otherwise interfere with his work at TigerRisk, where he may solicit and service other clients. And in two years, he may solicit and service Relevant Clients as well. By contrast, Willis Re "faces the prospect of losing business to a major competitor, transported by a high-level company official." Id. ; see also Uni-World , 73 F. Supp. 3d at 237 ("The injunction that plaintiffs seek would merely bar [the defendant] from violating his non-compete agreements. It would not impose any new legal duty on him; instead it would give necessary teeth to an existing contractual duty."). Meanwhile, "[t]he public interest would not be disserved by the grant or denial of this injunction. The injunction arises in the context of a commercial matter between two private parties. If anything, the public interest would be advanced by such an injunction, because, on the facts here, such an injunction would tend to encourage parties to abide by their agreements." Uni-World , 73 F. Supp. 3d at 237 ; see also DiGregorio , 307 F. Supp. 3d at 351 ("Enforcing the Non–Solicitation and Confidentiality Agreements will not harm the public. The Individual Defendants can continue to solicit non-Mercer clients in lawful ways. Mercer will have the opportunity over the coming year to transition its current clients to personnel other than the Individual Defendants to service their accounts.").
CONCLUSION
In sum, for the foregoing reasons, the Court concludes that Plaintiffs are entitled to a preliminary injunction barring Herriott from pursuing the California Action and from soliciting or servicing MLM, CAP, CHI, HAPI, Berkley Design, Berkley Healthcare, NORCAL, and the Mutual, all of which are "Relevant Clients" within the meaning of the RCAs, for a period of two years. Both parties agreed, Tr. 215, 219, as does the Court, that the two-year period runs from February 9, 2021, the date on which the Court entered the TRO.
No later than July 29, 2021 , Plaintiffs shall, after conferring with Herriott, submit a proposed Order consistent with the Court's analysis and conclusions herein. The TRO entered on February 9, 2021, is EXTENDED through the date on which the Court enters an Order setting forth the terms of the preliminary injunction.
Additionally, by separate Order to be issued today, the Court will schedule an initial pretrial conference and direct the parties to confer and file a joint letter proposing next steps for the litigation as well as a schedule for merits-related discovery.
Two final housekeeping matters remain. First, the witnesses at the preliminary injunction hearing provided their direct testimony by declaration. At present, however, their declarations are not on the docket. In the interests of public access and ensuring that there is a complete record, the parties shall file the declarations on ECF no later than July 29, 2021 .
Second, on May 10, 2021, the Court temporarily granted Herriott's request to seal three exhibits. See ECF Nos. 120, 122. Filings that are "relevant to the performance of the judicial function and useful in the judicial process" are considered "judicial documents" to which a presumption in favor of public access attaches. Lugosch v. Pyramid Co. of Onondaga , 435 F.3d 110, 119 (2d Cir. 2006). Significantly, assessment of whether the presumption in favor of public access is overcome must be made on a document-by-document basis, see, e.g. , Brown v. Maxwell , 929 F.3d 41, 48 (2d Cir. 2019), and the mere fact that a court does not rely upon a document in adjudicating a motion does not remove it from the category of "judicial documents," id. at 50-51. Finally, the mere fact that information is deemed confidential by agreement of the parties is not a valid basis to overcome the presumption. See, e.g. , United States v. Wells Fargo Bank N.A. , No. 12-CV-7527 (JMF), 2015 WL 3999074, at *4 (S.D.N.Y. June 30, 2015). Accordingly, any party that believes, in light of the foregoing principles, that any of the materials currently under seal should remain under seal is ORDERED to show cause in writing, on a document-by-document basis, why doing so would be consistent with the presumption in favor of public access no later than August 5, 2021 . Proposed redactions should be "narrowly tailored" to achieve the aims that justify sealing. See, e.g. , Brown , 929 F.3d at 47 (internal quotation marks omitted).
SO ORDERED.