Tutor Time Learning Centers v. KOG Industries

U.S. DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Employment

New York Law Journal

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Judge Nicholas Garaufis

Colmenares operates KOG Industries and GabeCo Industries. The franchise agreement under which KOG operated a Tutor Time learning center in Queens (Queens franchise agreement) contained a non-competition provision barring KOG or any "shareholder or partner" from operating a child-care business within 10 miles of any Tutor Time center for two years after the agreement's termination. After Tutor Time terminated the Queens franchise agreement in July 2012, Colmenares "de-identified" the Queens and Staten Island locations. He removed signs bearing Tutor Time trademarks, stopped using Tutor Time materials, and renamed the Queens and Staten Island locations Ivy League Learning Academy. The court denied Tutor Time the non-competiton clause's enforcement. Discussing the parties' Oct. 17, 2012, partial settlement agreement, it rejected Tutor Time's claim that the Ivy League locations' continued operation created public confusion, loss of good will, and injured current Tutor Time franchises. Assuming Tutor Time showed irreparable harm, the provision's enforcement would harm the public interest. Further, denial of Tutor Time's motion would, at worst, allow limited, financial, and compensable harm to continue.

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