St. Joseph's Hospital Health Center v. American Anesthesiology of Syracuse, P.C.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

ST. JOSEPH’S HOSPITAL HEALTH CENTER,

Plaintiff, 5:24-cv-276 (BKS/ML)

v.

AMERICAN ANESTHESIOLOGY OF SYRACUSE,

P.C., AMERICAN ANESTHESIOLOGY, INC., NMSC II,

LLC, and NORTH AMERICAN PARTNERS IN

ANESTHESIA, L.L.P,

Defendants.

AMERICAN ANESTHESIOLOGY OF SYRACUSE,

P.C., and NORTH AMERICAN PARTNERS IN

ANESTHESIA, L.L.P,

Counter-Claimants,

v.

ST. JOSEPH’S HOSPITAL HEALTH CENTER,

Counter-Defendant.

Appearances:

For Plaintiff and Counter-Defendant:

John F. Queenan

Rivkin Radler LLP

66 South Pearl Street, 11th Floor

Albany, New York 12207

David A. Ettinger

Benjamin VanderWerp

Honigman LLP

2290 First National Building

660 Woodward Avenue

Detroit, Michigan 48226

For Defendants and Counter-Claimants:

Jon P. Devendorf

J.J. Pelligra

Barclay Damon LLP

Barclay Damon Tower

125 East Jefferson Street

Syracuse, New York 13202

W. Scott O’Connell

Jennifer Lada

Marc L. Antonecchia

Holland & Knight LLP

31 West 52nd Street

New York, New York 10019

William M. Katz, Jr.

Holland & Knight LLP

One Arts Plaza

1722 Routh Street

Dallas, Texas 75201

Hon. Brenda K. Sannes, Chief United States District Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiff St. Joseph’s Hospital Health Center initiated this action on February 26, 2024,

against Defendants American Anesthesiology of Syracuse, P.C., American Anesthesiology of

Syracuse, Inc., NMSC II, LLC, and North American Partners in Anesthesiology, L.L.P, asserting

antitrust claims under the Sherman Act, 15 U.S.C. § 1 et seq., and New York law, N.Y. Gen.

Bus. Law § 340. (Dkt. No. 1.) On March 7, 2024, Defendants answered the complaint and

American Anesthesiology of Syracuse, P.C., and North American Partners in Anesthesiology,

L.L.P (together, “NAPA”), asserted a counterclaim for breach of contract. (Dkt. No. 20.) The

same day, NAPA moved by order to show cause for a temporary restraining order and

preliminary injunction. (Dkt. Nos. 22–25.) The motion is fully briefed. (Dkt. Nos. 32, 38.) The

Court heard oral argument on the motion via telephonic conference on March 15, 2024. For the

following reasons, NAPA’s motion for a temporary restraining order is denied.

II. FACTS1

A. Parties

St. Joseph’s operates a 431-bed hospital in Syracuse, New York, that offers “a variety of

inpatient and outpatient services, including cardiology, obstetrics, surgery, and Level II trauma

care.” (Dkt. No. 32-3, ¶ 2; see also Dkt. No. 1, ¶¶ 8–9.) American Anesthesiology of Syracuse,

P.C., is an affiliate of North American Partners in Anesthesia, LLP, which is an “anesthesia

management company.” (Dkt. No. 24, ¶ 3.) Both American Anesthesiology of Syracuse and

North American Partners in Anesthesia are headquartered in Melville, New York. (Dkt. No. 20,

at 20, ¶ 2–3.)

B. Underlying Agreement

St. Joseph’s and American Anesthesiology of Syracuse entered into an Administrative

and Clinical Services Agreement (the “Agreement”), effective December 31, 2018. (Dkt. No. 24,

¶ 4; Dkt. No. 24-1.) The Agreement “establishe[d] an exclusive services arrangement between

[St. Joseph’s] and [American Anesthesiology of Syracuse] for the provision of anesthesiology

services for patients of [St. Joseph’s],” including the provision of anesthesiologists and certified

1 The facts are taken from the complaint, the answer and counterclaims, and the affidavits and exhibits the parties

submitted in connection with this motion. See J.S.G. ex rel. J.S.R. v. Sessions, 330 F. Supp. 3d 731, 738 (D. Conn.

2018) (“In deciding a motion for preliminary injunction, a court may consider the entire record including affidavits

and other hearsay evidence.”); Fisher v. Goord, 981 F. Supp. 140, 173 n.38 (W.D.N.Y. 1997) (noting that a “court

has discretion on a preliminary injunction motion to consider affidavits . . . given the necessity of a prompt decision”).

The “findings are provisional in the sense that they are not binding on a motion for summary judgment or at trial and

are subject to change as the litigation progresses.” trueEX, LLC v. MarkitSERV Ltd., 266 F. Supp. 3d 705, 720 n.108

(S.D.N.Y. 2017); see also Fair Hous. in Huntington Comm. Inc. v. Town of Huntington, 316 F.3d 357, 364 (2d Cir.

2003). The Court’s recitation of facts is limited to those relevant to the disposition of NAPA’s motion for a temporary

restraining order.

registered nurse anesthetists (“CRNAs” and, together with anesthesiologists, “clinicians”). (Dkt.

No. 24-1, at 2–3; Dkt. No. 24, ¶ 3.)2

The Agreement’s original term expired on December 31, 2020, with an automatic

renewal for a period of two years unless either party gave notice 180 days or more before the

expiration of the Agreement. (Dkt. No. 24-1, at 14.) Via multiple amendments, the Agreement

term was extended to July 1, 2024. (Dkt. No. 24, ¶ 4; Dkt. Nos. 24-2, 24-3, 24-4.) On March 1,

2021, by Assignment and Assumption Agreement, American Anesthesiology of Syracuse

assigned the Agreement (among other service contracts) to North American Partners in

Anesthesia. (Dkt. No. 24, ¶ 5; Dkt. No. 24-5.)

The Agreement includes a non-solicitation clause, section XIII.D (the “Non-Solicitation

Clause”), that reads in pertinent part:

Employee Inducement. During the Term of this Agreement and for

two (2) years from the date of termination of this Agreement, either

Party will not directly or indirectly, whether as an individual,

advisor, employee, agent, or otherwise take any action to induce any

employee to cease his or her employment with the other Party.

(Dkt. No. 24-2, at 5.)3

C. Relevant Conduct

On December 29, 2023, St. Joseph’s informed NAPA that it would not renew the

Agreement when the term ended on July 1, 2024. (Dkt. No. 32-3, ¶ 9.) During subsequent

contract negotiations, NAPA representatives discussed the possibility of negotiating a buyout.

2 In general, “the patients the anesthesia providers see are provided by the hospital.” (Dkt. No. 32-2, ¶ 10.) “Anesthesia

providers do not advertise their providers’ services to prospective patients and do not admit their own patients to the

hospital.” (Id.) As to St. Joseph’s specifically, “[a]nesthesiologists at St. Joseph’s do not have relationships with

patients, but instead are assigned patients as needed in light of the procedures being performed by [St. Joseph’s]

surgeons, cardiologists, OB/GYNs and other physicians which require anesthesia.” (Dkt. No. 32-4, ¶ 9.)

3 The Non-Solicitation Clause was present in the Agreement as originally contemplated. (Dkt. No. 24-1, at 17.) It was

amended effective December 31, 2020, but the operative language was not meaningfully altered. (Dkt. No. 24-2, at

5.)

(Dkt. No. 32-7, ¶¶ 6, 8.) Negotiations were unsuccessful. (Id. ¶ 10.) St. Joseph’s states that it is

“imperative that [it] make arrangements to obtain anesthesia coverage in a short period of time,

so that any physicians who are employed by St. Joseph’s . . . can be properly credentialed and

included in managed care contracts and approved by Medicare and Medicaid so that their

services can be paid for.” (Dkt. No. 32-7, ¶ 10.)

To that end, on February 26, 2024, St. Joseph’s announced to its medical staff via email

its intention to offer employment to “NAPA’s anesthesia providers.” (Dkt. No. 24-7.)4 The same

day, St. Joseph’s sent offers of employment to “its anesthesia providers,” (Dkt. No. 32-3, ¶ 10;

Dkt. No. 32-7, ¶ 11; Dkt. No. 24-9),5 and filed its complaint, (Dkt. No. 1). On March 1, 2024,

NAPA sent St. Joseph’s a cease-and-desist letter demanding that St. Joseph’s refrain from

inducing NAPA’s clinicians to terminate their contracts with NAPA. (Dkt. No. 25-1.) St.

Joseph’s responded by letter dated March 5, 2024. (Dkt. No. 25-2.)6 NAPA subsequently filed its

answer and counterclaim, (Dkt. No. 20), and, contemporaneously, the instant motion, (Dkt. Nos.

22–25).

III. DISCUSSION

A. Standard of Review

Rule 65 of the Federal Rules of Civil Procedure governs the issuance of temporary

restraining orders and preliminary injunctions. In the Second Circuit, the standard for issuance of

a temporary restraining order is the same as the standard for a preliminary injunction. Fairfield

4 St. Joseph’s acknowledged the Non-Solicitation Clause and other restrictive covenants in this email and indicated

that it was “suing to have those [restrictive covenants] declared void and to obtain damages based on NAPA’s past

behavior.” (Id.)

5 The offers of employment also acknowledged existing restrictive covenants. (Dkt. No. 24-9, at 3.)

6 St. Joseph’s requested in this letter “an estimate of the cost” associated with “the benefit of funds [NAPA] has

expended in clinical training of [NAPA’s clinicians].” (Id. at 2.)

Cnty. Med. Ass’n v. United Healthcare of New Eng., 985 F. Supp. 2d 262, 270 (D. Conn. 2013),

aff’d, 557 F. App’x 53 (2d Cir. 2014) (summary order); AFA Dispensing Grp. B.V. v. Anheuser-

Busch, Inc., 740 F. Supp. 2d 465, 471 (S.D.N.Y. 2010) (“It is well established that the standard

for an entry of a temporary restraining order is the same as for a preliminary injunction.”). In

general, a party seeking a preliminary injunction must demonstrate: (1) a likelihood of

irreparable injury in the absence of an injunction; (2) a likelihood of success on the merits or

sufficiently serious questions going to the merits to make them fair ground for litigation; (3) that

the balance of hardships tips in the movant’s favor or, if relying on the presence of sufficiently

serious questions, that the balance of hardships tips decidedly in the plaintiff’s favor; and (4) that

the public interest would not be disserved by the issuance of an injunction. Benihana, Inc. v.

Benihana of Tokyo, LLC, 784 F.3d 887, 895 (2d Cir. 2015); see also N. Am. Soccer League, LLC

v. U.S. Soccer Fed’n, Inc., 883 F.3d 32, 37 (2d Cir. 2018).

Generally, preliminary injunctions are prohibitory or mandatory. N. Am. Soccer League,

883 F.3d at 36. “Prohibitory injunctions maintain the status quo pending resolution of the case;

mandatory injunctions alter it.” Id. The “status quo . . . is[] ‘the last actual, peaceable uncontested

status which preceded the pending controversy.’” Id. at 37 (quoting Mastrio v. Sebelius, 768 F.3d

116, 120 (2d Cir. 2014) (per curiam)). A party seeking a mandatory injunction “must meet a

heightened legal standard by showing ‘a clear or substantial likelihood of success on the

merits.’” Id. (quoting N.Y. Civ. Liberties Union v. N.Y.C. Transit Auth., 684 F.3d 286, 294 (2d

Cir. 2012)). “A heightened ‘substantial likelihood’ standard may also be required when the

requested injunction (1) would provide the plaintiff with ‘all the relief that is sought’ and

(2) could not be undone by a judgment favorable to defendants on the merits at trial.”

Mastrovincenzo v. City of New York, 435 F.3d 78, 90 (2d Cir. 2006) (quoting Tom Doherty

Assocs., Inc. v. Saban Ent., Inc., 60 F.3d 27, 33–34 (2d Cir. 1995)).

St. Joseph’s does not contend that the injunctive relief NAPA seeks is mandatory rather

than prohibitory.7 Rather, St. Joseph’s argues that “an injunction would provide NAPA with

substantially all the relief it seeks, and that relief could not be undone.” (Dkt. No. 32, at 16.)

NAPA did not address this argument in its briefing.8 At oral argument, NAPA admitted that

injunctive relief would provide it with substantially all the relief it seeks. The Court agrees that it

appears injunctive relief would provide NAPA “with substantially all the relief sought,” see Tom

Doherty Assocs., 60 F.3d at 34, and given St. Joseph’s unopposed argument that an “immediate

injunction would make it impossible for St. Joseph’s to employ the clinicians because the

hospital needs to complete its employment negotiations with these individuals by the end of

March,” (Dkt. No. 32, at 15–16; see also Dkt. No. 32-7, ¶ 10), it appears in this context that an

order, once complied with, could not be undone and that the “substantial likelihood of success”

standard applies. Even applying the less demanding “likelihood of success” standard, however,

NAPA has failed to meet its burden on the record presently before the Court.

B. Analysis

1. Irreparable Harm

NAPA argues that, in the absence of injunctive relief, they face “financial harm”—which

NAPA argues is “challenging to model and calculate” and therefore irreparable—associated with

NAPA’s “[in]ability to relocate its anesthesiologists and CRNAs to another hospital where

NAPA affiliated entities have an exclusive contract to provide anesthesia services” and the

7 Because the relief sought would appear to maintain the status quo—that is, the “the last actual, peaceable uncontested

status which preceded the pending controversy”—the Court assumes the injunction is prohibitory. See N. Am. Soccer

League, 883 F.3d at 37 (quoting Mastrio, 768 F.3d at 120).

8 NAPA addresses only the distinction between prohibitory and mandatory injunctions. (Dkt. No. 38, at 5–6.)

danger that “St[.] Joseph’s actions and the dysfunction that this litigation will foist into the work

environment may cause anesthesiologists and CRNAs to seek employment with another non-

NAPA provider.” (Dkt. No. 23, at 13.) NAPA also argues that St. Joseph’s actions “threaten to

fracture or even disintegrate the cohesive group of NAPA’s 16 employed anesthesiologists and

35 employed CRNAs that focus on providing highly-specialized anesthesiology services to St.

Joseph’s patients” and that the “loss of these medical professionals threatens NAPA’s ability to

conduct its business in a way that is not quantifiable by money damages.” (Id.) Finally, NAPA

argues that “there are immediate concerns with respect to how St. Joseph’s actions are affecting

patient care” because “[c]onfusion and anxiety about the impact that St. Joseph’s actions have on

. . . [the] ability [of anesthesiologists and CRNAs employed by NAPA] to care for patients, and

questions about how the litigation will affect their employment, certainly raise[] the prospect that

patient safety is being compromised. (Id. at 13–14.) St. Joseph’s argues that “break[ing] apart”

NAPA’s clinician group is not a cognizable injury, mere disruption of NAPA’s business does not

constitute irreparable harm, the harms alleged by NAPA are speculative, and any injuries are

compensable through money damages. (Dkt. No. 32, at 24–26 (quoting Dkt. No. 24, ¶¶ 15–18).)

St. Joseph’s has submitted declarations from three doctors who work at St. Joseph’s who have

not seen evidence that the clinicians’ patient care has been compromised. (Dkt. No. 32-8, ¶ 5;

Dkt. No. 32-9, ¶ 4; Dkt, No. 32-10, ¶ 5.)

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) (quoting Rodriguez ex rel. Rodriguez v. DeBuono, 175 F.3d 227, 234 (2d Cir.

1999)); see also Doe v. Rensselaer Polytechnic Inst., No. 18-cv-1374, 2019 WL 181280, at *2,

2019 U.S. Dist. LEXIS 5396, at *4 (N.D.N.Y. Jan. 11, 2019), and “[i]n the absence of a showing

of irreparable harm, a motion for a preliminary injunction should be denied,” Rodriguez, 175

F.3d at 234. “Irreparable harm is ‘injury that is neither remote nor speculative, but actual and

imminent and that cannot be remedied by an award of monetary damages.’” New York ex rel.

Schneiderman v. Actavis PLC, 787 F.3d 638, 660 (2d Cir. 2015) (quoting Forest City Daly

Hous., Inc. v. Town of N. Hempstead, 175 F.3d 144, 153 (2d Cir. 1999)). “The relevant harm is

the harm that (a) occurs to the parties’ legal interests and (b) cannot be remedied after a final

adjudication, whether by damages or a permanent injunction.” Salinger v. Colting, 607 F.3d 68,

81 (2d Cir. 2010) (footnote omitted).

As an initial matter, NAPA’s argument that patient care may be impacted is speculative

and conclusory. NAPA bases its argument on Dr. Kenneth M. Santos’s factual assertion that he

has “learned that surgeons and other professionals in the surgical suite at St. Joseph’s are . . .

concerned, confused and anxious over how St. Joseph’s actions will impact their ability to treat

patients” and “about how this litigation will impact their employment” and that Dr. Santos is

therefore “concerned that St. Joseph’s actions and all of these dynamics are sufficiently upsetting

and distracting that patient safety is being compromised.” (Dkt. No. 24, ¶ 14.) This is speculative

and conclusory and therefore provides an insufficient basis on which to establish irreparable

harm. See T-Mobile Ne. LLC v. Riverhead Water Dist., No. 15-cv-6310, 2016 WL 373968, at *3,

2016 U.S. Dist. LEXIS 10652, at *8 (E.D.N.Y. Jan. 29, 2016).9

As to NAPA’s remaining arguments—those related to “financial harm” arising from

NAPA’s inability to relocate clinicians, NAPA’s clinicians seeking employment elsewhere, and

“disintegrat[ion] [of] the cohesive group” of NAPA clinicians that would “threaten[] NAPA’s

9 Dr. Santos’s speculation is also contradicted by declarations from doctors and administrators at St. Joseph’s who

work with the clinicians. (Dkt. No. 32-3, ¶ 13; Dkt. No. 32-4, ¶ 11; Dkt. No. 32-8, ¶ 5; Dkt. No. 32-9, ¶ 4; Dkt. No.

32-10, ¶ 5.)

ability to conduct its business,” (Dkt. No. 23, at 13)—NAPA fails to demonstrate how the

potential loss of clinicians to St. Joseph’s is not compensable through money damages. “It is

settled law that when an injury is compensable through money damages there is no irreparable

harm.” JSG Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75, 79 (2d Cir. 1990). And “[l]oss of

business due to a breach of a [restrictive covenant] is often a quantifiable injury which can be

remedied at law.” Banner Indus. of N.E., Inc. v. Wicks, No. 11-cv-1537, 2012 WL 13018976, at

*6 (N.D.N.Y. May 8, 2012) (collecting cases).

In support of its position that money damages could not remedy the harm caused by St.

Joseph’s actions, NAPA cites Veramark Technologies., Inc. v. Bouk, 10 F. Supp. 3d 395, 401

(W.D.N.Y. 2014). (Dkt. No. 38, at 13.) But in Veramark, the court found that the party moving

for a preliminary injunction had failed to demonstrate irreparable harm because the alleged

irreparable harms at issue—the threat to “customer relationships and goodwill” and the loss of a

“unique” employee—were not supported by facts in the record. See 10 F. Supp. 3d 395, 401–05.

The court in Veramark did not specifically discuss whether money damages might be adequate,

and Veramark therefore does not support NAPA’s argument that money damages, in this specific

instance, would be inadequate.10 NAPA cites no other case to demonstrate that money

damages—the calculation of which appears relatively straightforward—could not remedy an

injury caused by St. Joseph’s actions.

10 The court in Veramark did note that, “[b]ecause it is very difficult to calculate monetary damages in the event of

the loss of a client relationship ‘that would produce an indeterminate amount of business in years to come,’ the

violation of an enforceable non-compete constitutes irreparable harm.” Id. at 400 (emphasis added) (quoting Ticor

Title Ins. Co. v. Cohen, 173 F.3d 63, 69 (2d Cir.1999)). As an initial point, the alleged harm here does not involve a

difficult-to-quantify client relationship but instead involves competition for employees, and in any case, as the Court

discusses below, NAPA has failed to meet its burden, at this stage of the case, of showing a likelihood of success.

Furthermore, the court in Veramark went on to say that “irreparable harm may not be presumed and must be

demonstrated in each case.” 10 F. Supp. 3d at 401. On this record, NAPA has not demonstrated that money damages

are insufficient to remedy the alleged harm.

At bottom, NAPA has not, on the record before the Court, met its burden of

demonstrating irreparable harm because the harms it alleges appear to amount to “[m]ere

business disruptions,” see Harley Marine NY, Inc. v. Moore, No. 23-cv-163, 2023 WL 3620720,

at *6, 2023 U.S. Dist. LEXIS 92265, at *17 (N.D.N.Y. Mar. 24, 2023), that are compensable by

money damages, see Banner, 2012 WL 13018976, at *6 (“[The] [p]laintiff has not shown that

any business lost . . . could not be calculated with reasonable certainty.”); TGG Ultimate

Holdings, Inc. v. Hollett, No. 16-cv-6289, 2016 WL 8794465, at *5, 2016 U.S. Dist. LEXIS

188014, at *12 (S.D.N.Y. Aug. 29, 2016) (“Considering that [the plaintiff] is a large company

with operations across the United States, and its services . . . are not ‘so unique that any alleged

damages resulting from its inability to market and sell them could not be easily quantified,’ . . .

any harm . . . may be remedied by money damages.” (quoting Park W. Radiology v. Carecore

Nat’l LLC, 240 F.R.D. 109, 113 (S.D.N.Y. 2007)); DS Parent, Inc. v. Teich, No. 13-cv-1489,

2014 WL 546358, at *13, 2014 U.S. Dist. LEXIS 16116, at *44 (N.D.N.Y. Feb. 10, 2014)

(denying a preliminary injunction where “money damages would . . . be relatively easy to prove

and would likely adequately compensate [the plaintiff] for its loss”).

2. Likelihood of Success or Sufficiently Serious Questions

NAPA argues that it is likely to succeed on the merits of its breach of contract claim

because the Agreement, including the Non-Solicitation Clause, is an enforceable contract with

St. Joseph’s, and St. Joseph’s has breached the Agreement by failing to comply with the Non-

Solicitation Clause. (Dkt. No. 23, at 10–12.) St. Joseph’s argues that NAPA is not likely to

succeed on the merits of its breach of contract claim because (1) the Non-Solicitation Clause is

not enforceable under New York law; (2) performance of the Agreement should be excused; and

(3) the Non-Solicitation Clause violates federal antitrust law. (Dkt. No. 32, at 16–24.)

As set forth above, it appears that NAPA must establish a substantial likelihood of

success on the merits to obtain preliminary injunctive relief. “To establish a likelihood of success

on the merits, a plaintiff must show that he is more likely than not to prevail on his claims, or, in

other words, that the ‘probability of prevailing is better than fifty percent.’” Doe v. Vassar Coll.,

No. 19-cv-9601, 2019 WL 6222918, at *7, 2019 U.S. Dist. LEXIS 203418, at *20 (quoting

BigStar Ent., Inc. v. Next Big Star, Inc., 105 F. Supp. 2d 185, 191 (S.D.N.Y. 2000)). To the

extent NAPA did not have to establish a substantial likelihood of success, it could prevail by

showing “a serious question going to the merits to make them a fair ground for trial, with a

balance of hardships tipping decidedly in the plaintiff’s favor.” Id., 2019 WL 6222918, at *7,

2019 U.S. Dist. LEXIS 203418, at *21 (quoting Metro. Taxicab Bd. of Trade v. City of New

York, 615 F.3d 152, 156 (2d Cir. 2010)). This allows a district court to grant injunctive relief

“where it cannot determine with certainty that the moving party is more likely than not to prevail

on the merits of the underlying claims, but where the costs outweigh the benefits of not granting

the injunction.” See Citigroup Glob. Mkts., Inc. v. VCG Special Opportunities Master Fund Ltd.,

598 F.3d 30, 35 (2d Cir. 2010).

“Under New York law, a breach of contract claim requires proof of (1) an agreement,

(2) adequate performance by the [claimant], (3) breach by the [other party], and (4) damages.”

Fischer & Mandell, LLP v. Citibank, N.A., 632 F.3d 793, 799 (2d Cir. 2011) (citing First Invs.

Corp. v. Liberty Mut. Ins. Co., 152 F.3d 162, 168 (2d Cir. 1998)).11 “In pleading these elements,

a [claimant] must identify what provisions of the contract were breached as a result of the acts at

issue.” Adecco USA, Inc. v. Staffworks, Inc., No. 20-cv-744, 2020 WL 7028872, at *4, 2020 U.S.

11 The parties do not dispute that New York law applies, and in any event, the Agreement specifies that it is governed

by the “laws of the State where the services are to be performed,” (Dkt. No. 24-1, at 20), and services provided

pursuant to the Agreement are indisputably performed in Syracuse, New York, (Dkt. No. 24, ¶ 3; Dkt. No. 32-3, ¶¶ 2,

6).

Dist. LEXIS 226382, at *11 (N.D.N.Y. Sept. 15, 2020) (quoting Wolff v. Rare Medium, Inc., 171

F. Supp. 2d 354, 358 (S.D.N.Y. 2001)). NAPA premises its breach of contract claim solely on

the Non-Solicitation Clause. (Dkt. No. 20, at 23–24, ¶ 21.) NAPA must therefore show that this

restrictive covenant is enforceable in order to demonstrate a likelihood of success on its claim.

See Intertek Testing Servs., N.A., Inc. v. Pennisi, 443 F. Supp. 3d 303, 333 (E.D.N.Y. 2020).

Accordingly, the Court turns to the enforceability of the Non-Solicitation Clause.

“Courts analyze restrictive covenants in ordinary commercial contracts . . . ‘under a

simple rule of reason, balancing the competing public policies in favor of robust competition and

freedom to contract.’” Mathias v. Jacobs, 167 F. Supp. 2d 606, 611 (S.D.N.Y. 2001) (quoting

DAR & Assocs., Inc. v. Uniforce Servs., Inc., 37 F. Supp. 2d 192, 197 (E.D.N.Y. 1999)). “Courts

typically consider the legitimate business interests protected by the covenant, the reasonableness

of the covenant, and the degree of hardship imposed upon the party against whom the covenant

is enforced.” Id. (citing DAR, 37 F. Supp. 2d at 198–200). A restrictive covenant is reasonable 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 (1999).12 “[C]ognizable employer interests”

include “protection against misappropriation of the employer’s trade secrets or of confidential

customer lists, or protection from competition by a former employee whose services are unique

12 NAPA argues for the first time in its reply brief that, under New York law, there is a distinction between a court’s

analysis of restrictive covenants in employment contracts and restrictive covenants as components of “ordinary

commercial contracts” between “sophisticated parties.” (Dkt. No. 38, at 6–7 (citing Mathias, 167 F. Supp. 2d at 610–

11). As to the latter, NAPA argues, the “simple rule of reason” applies. (Id. (quoting Mathias, 167 F. Supp. 2d at

611).) But under the standard espoused by the cases NAPA cites for that proposition, the Court must still consider

whether there are “legitimate business interests protected by the covenant.” See Mathias, 167 F. Supp. 2d at 611;

accord DAR, 37 F. Supp. 2d at 197. Whether such interests are the same as those enumerated in BDO Seidman is not

well-settled. See MasterCard Int’l Inc. v. Nike, Inc., 164 F. Supp. 3d 592, 599–600 (S.D.N.Y. 2016). But multiple

courts have applied the BDO Seidman factors in analyzing contractual provisions in similar contexts. See id. at 600

(collecting cases and applying BDO Seidman). Accordingly, the Court considers the BDO Seidman factors in applying

the “rule of reason” identified by NAPA.

or extraordinary.” See id. at 389; accord Ticor, 173 F.3d at 70 (“[E]nforcement will be granted to

the extent necessary (1) to prevent an employee’s solicitation or disclosure of trade secrets, (2) to

prevent an employee’s release of confidential information regarding the employer’s customers,

or (3) in those cases where the employee’s services to the employer are deemed special or

unique.” (citing Purchasing Assocs. v. Weitz, 13 N.Y.2d 267, 272–73 (1963))).

Here, NAPA argues that “enforcement of the covenant is reasonable to enforce NAPA’s

legitimate business interest because of the considerable effort the NAPA Parties expend in

identifying, hiring, and retaining qualified anesthesiologists and CRNAs.” (Dkt. No. 23, at 10–

11.) NAPA clarifies in its reply brief that its legitimate business interest is protection against “the

unfair conversion of NAPA’s trained and in place workforce at St. Joseph’s” through the

“poaching [of] the high-quality, well-trained, in-place workforce that NAPA has assembled

though significant time, effort, and opportunity costs.” (Dkt. No. 38, at 7.)13 St. Joseph’s argues

that the Non-Solicitation Clause does not protect a legitimate business interest. (Dkt. No. 32, at

16–20.)

NAPA’s contention that it has expended “considerable effort . . . in identifying, hiring,

and retaining qualified anesthesiologists and CRNAs” finds only limited factual support in the

record. Chelsea Gifford, NAPA’s Talent Acquisition Manager for its Northeast Region, indicates

NAPA’s recruitment records for St. Joseph’s show that “NAPA was able to cultivate and recruit

301 separate clinician applications for its practices in Syracuse” and that “of that total, offers for

St. Joseph’s positions were extended to 39; and signed contracts were received from 24.” (Dkt.

No. 38-2, ¶ 7.) Dr. Santos states that he “devotes significant time to recruiting clinicians to the

13 NAPA does not argue that the Non-Solicitation Clause prevents solicitation or disclosure of trade secrets,

confidential or otherwise private information, or client information.

practice,” that “[o]ther NAPA clinicians do as well,” that recruitment “is a near daily obligation,”

and that “the time NAPA clinicians devote to recruiting is not reimbursed by St. Joseph’s.” (Dkt.

No. 38-3, ¶ 6.) But NAPA provides no argument or caselaw support as to how these discrete

recruitment records establish a legitimate business interest in NAPA maintaining its current

clinicians. Nor does NAPA argue how Dr. Santo’s vague assertions about time spent on

recruitment do so.

Moreover, “protection against a general risk of possible future employee attrition is not

among the . . . legitimate interests recognized by New York courts to justify a restrictive

covenant.” Reed Elsevier Inc. v. Transunion Holding Co., No. 13-cv-8739, 2014 WL 97317, at

*12, 2014 U.S. Dist. LEXIS 2640, at *32–33 (S.D.N.Y. Jan. 9, 2014) (collecting cases). In its

memorandum of law in support of its motion for a temporary restraining order, NAPA cites a

single in-circuit14 case to argue otherwise. (Dkt. No. 23, at 11–12.)15 But that case stands for the

14 NAPA also cites a trial-court decision from North Carolina, (Dkt. No. 23, at 12), which does not apply New York

law and is therefore unpersuasive. Furthermore, that case relied in part on evidence in the record demonstrating that

the plaintiff had not only recruited but also “credential[ed] and train[ed]” anesthesiologists, see Se. Anesthesiology

Consultants, PLLC v. Charlotte-Mecklenburg Hosp. Auth., No. 18-cv-5899, 2018 WL 3304441, at *22, 2018 NCBC

LEXIS 137, *68 (N.C. Super. June 22, 2018), while NAPA argues only that its legitimate interest is in “identifying,

hiring, and retaining qualified anesthesiologists and CRNAs,” (Dkt. No. 23, at 12). Indeed, St. Joseph’s presented

evidence that “[a]nesthesia providers all receive specialized training before becoming employed, in medical school,

in residencies and in CRNA programs,” and that “[c]ontinuing medical education in anesthesia care is widely available

from a variety of firms.” (Dkt. No. 32-2, ¶ 11 (emphasis added).)

15 In a footnote in its reply brief, NAPA cites additional cases. (Dkt. No. 38, at 7 n.1.) None of these cases supports

the proposition that NAPA’s interest in maintaining its currently constituted workforce is a legitimate business interest

protectable by a restrictive covenant. Instead, the cases demonstrate that other interests, such as protection of

confidential or otherwise private business information, information related to a business’s clients, or significant

investment in training and developing the skills of its employees may entitle a business to enforcement of a restrictive

covenant. See DAR, 37 F. Supp. 2d at 199 (“[A business] possesses an interest in its know-how, client base, [private

list of] temporary employees, and goodwill that warrants some protection through restrictive covenants.” (emphasis

added)); Spherenomics Glob. Contact Centers v. vCustomer Corp., 427 F. Supp. 2d 236, 249 (E.D.N.Y. 2006) (“In

the instant case, the legitimate business interest to be preserved is the unfair competition that would result from [the

defendant] independently pursuing business opportunities with a client to whom [the plaintiff] had introduced it for

the purpose of the joint pursuit.” (emphasis added) (citing DAR, 37 F. Supp. 2d at 199)); Design Strategy Corp. v.

Knack Sys., LLC, No. 07-cv-395, 2007 WL 4562926, at *4, 2007 U.S. Dist. LEXIS 94121, at *9 (S.D.N.Y. Dec. 18,

2007) (“There would be unfairness here if, in the face of the restrictive covenant, [the defendant] exploited [the

plaintiff’s] relationship with [a client] to obtain its own business, but not otherwise.”); Marsh USA Inc. v. Karasaki,

No. 08-cv-4195, 2008 WL 4778239, at *14, 2008 U.S. Dist. LEXIS 90986, at *43 (S.D.N.Y. Oct. 31, 2008) (“The

departure of [the plaintiff’s] employees deprives [the plaintiff] not only of its investment in training and developing

proposition that a restrictive covenant is enforceable where the defendant “was attempting to

poach [the plaintiff’s] employees in the hopes of replicating [the plaintiff’s] developed

[information security] network.” See MasterCard, 164 F. Supp. 3d at 602. The court in

MasterCard recognized that “poaching employees” is a “legitimate interest[] recognized by

courts in New York” insofar as the underlying intent is that the employees “bring proprietary

information with them.” See id. (quoting Admarketplace Inc. v. Salzman, No. 651390/2013, 2014

WL 1278504, at *4, 2014 N.Y. Misc. LEXIS 1458, at *10 (N.Y. Sup. Ct. Mar. 28, 2014)). In

enforcing the restrictive covenant, therefore, MasterCard relied not on investment in identifying,

hiring, and retaining employees—nor on any “special or unique” skillsets or abilities of

employees—but rather the “confidential information” or “trade secrets, ” see BDO Seidman, 93

N.Y.2d at 389; Ticor, 173 F.3d at 70, that those employees possessed. See MasterCard, 164 F.

Supp. 3d at 602 (“[T]he merit of Plaintiff’s allegations that NIKE was attempting to poach

MasterCard’s employees in the hopes of replicating MasterCard’s developed IS network will be

borne out in discovery.”).16

those employees, but also . . . of those employees’ clients who follow the employees because of the relationships

developed with them at [the plaintiff’s] expense.” (emphasis added)). Here, there is no confidential or otherwise

private business information or client information at issue, and there is no evidence in the record on which the Court

could conclude that NAPA has significantly invested in training its clinicians.

16 While NAPA does not specifically argue the point, and is not clear that such considerations are relevant where the

parties are not medical professionals competing for patients but are instead “an anesthesia management company” and

a hospital competing for employees, (Dkt. No. 24, ¶ 3; Dkt. No. 32-3, ¶ 2), New York courts do afford “learned

professionals,” including medical professionals, “wider latitude” with respect to enforceability of restrictive

covenants. See BDO Seidman, 93 N.Y.2d at 389–90 (citing, inter alia, Gelder Med. Grp. v. Webber, 41 N.Y.2d 680

(1977)). But the “test of reasonableness” demands analysis of “the particular facts[] and circumstances giving context

to the agreement,” id. at 390, and NAPA has proffered no facts—such as “the uniqueness or extraordinary nature of

the . . . [specific] services . . . performed” or “any unique or extraordinary ability [providing] a competitive

advantage”—on which the Court could rely in determining that the Non-Solicitation Clause is “necessary to protect

[NAPA’s] legitimate interests” under BDO Seidman. See id. at 389–90; see also Ticor, 173 F.3d at 70 (“Services that

are not simply of value to the employer, but that may also truly be said to be special, unique or extraordinary may

entitle an employer to injunctive relief.”). Indeed, one New York court has found that “[t]he anesthesia services at

issue herein are not unique” and are seemingly “routinely performed.” See Gujral v. Anesthesia Grp. of Albany, P.C.,

201 N.Y.S.3d 920, 2023 WL 9285382, at *2, 2023 N.Y. Misc. LEXIS 23444, at *9 (N.Y. Sup. Ct. Dec. 20, 2023)

(table); (Dkt. No. 32-2, ¶ 3; Dkt. No. 32-4, ¶¶ 2, 10).

Accordingly, on this record the Court concludes that NAPA has failed to provide

evidence and caselaw supporting its claim of a likelihood of success or sufficiently serious

questions going to the merits to make them fair ground for litigation with respect to their breach

of contract claim.17

3. Balance of Hardships and Public Interest

“[T]he balance of hardships inquiry asks which of the two parties would suffer most

grievously if the preliminary injunction motion were wrongly decided.” Goldman, Sachs & Co.

v. Golden Empire Schs. Fin. Auth., 922 F. Supp. 2d 435, 444 (S.D.N.Y. 2013) (alteration in

original) (quoting Tradescape.com v. Shivaram, 77 F. Supp. 2d 408, 411 (S.D.N.Y. 1999)).

Furthermore, “the court must ensure that the ‘public interest would not be disserved’ by the

issuance of a preliminary injunction.” Salinger, 607 F.3d at 80.

NAPA’s failure to demonstrate an irreparable injury and either a likelihood of success on

the merits or sufficiently serious questions going to the merits is sufficient to deny injunctive

relief. See Salinger, 607 F.3d at 75 n.5; Faiveley, 559 F.3d at 119. Accordingly, the Court need

not consider the remaining balance of hardships and public interest factors. Conn. State Police

Union v. Rovella, 36 F.4th 54, 68 (2d Cir. 2022) (“Because the District Court did not err in

concluding that the [plaintiff] could not succeed on the merits of its claim, we need not address

the remaining prongs of the preliminary injunction test, including whether the [plaintiff]

demonstrated irreparable harm or whether an injunction would be in the public interest.”).

IV. CONCLUSION

For these reasons, it is hereby

17 Because the Court’s analysis with respect to the enforceability of the Non-Solicitation Clause provides a basis on

which the Court concludes that NAPA has not demonstrated that it is likely to succeed on its breach of contract claim,

the Court does not address, at this juncture, St. Joseph’s arguments that performance of the Agreement should be

excused or that the Non-Solicitation Clause violates federal antitrust law.

ORDERED that NAPA’s motion for a temporary restraining order, (Dkt. No. 22), is

DENIED; and it is further

ORDERED that briefing of NAPA’s motion for a preliminary injunction shall proceed in

accordance with the schedule discussed at oral argument on NAPA’s motion for a temporary

restraining order, (Text Minute Entry dated 3/15/2024): St. Joseph’s may respond to NAPA’s

latest submission by 3/22/2024, NAPA may reply by 3/27/2024, and a hearing is set for

4/15/2024 at 9:30 a.m.'®

IT IS SO ORDERED.

Dated: March 19, 2024

Syracuse, New York

Brenda K. Sannes

Chief U.S. District Judge

'8 The Court will determine whether an evidentiary hearing is necessary after reviewing the parties’ supplemental

submissions.

18