In an August 15, 2011 decision by Justice Kapnick, the court granted in part and denied in part the defendants’ motion to dismiss. The court upheld the plaintiff modeling agency’s claim for unfair competition which alleged that the defendants, the Ford Modeling agency and several of its employees who were former employees of the plaintiff, used confidential information provided to Ford for the limited purpose of exploring a potential investment in the plaintiff, to divert potential new models away from the plaintiff and to the defendant competitor after the plaintiff rejected Ford’s investment offer. The court also upheld the breach of fiduciary duty claim against defendant Rowland, who was the founder of the plaintiff agency, because an inference could be drawn that Rowland was acting in Ford’s best interest and not the plaintiff’s when he persuaded several employees of the plaintiff to leave the plaintiff agency and join Ford with him. The court also upheld the claim for aiding and abetting a breach of fiduciary duty against Ford, upon concluding that it could be inferred that Ford and Rowland were acting in concert in recruiting and soliciting the plaintiff’s employees.
However, the court dismissed the claim for tortious interference with business relationships against all of the defendants because it found the plaintiff’s allegation showed only that the defendants acted to benefit themselves and not out of malice or with the intent to specifically injure the plaintiff, as is required to sustain such a claim. The court also dismissed the breach of contract claim which alleged that the defendants breached a confidentiality agreement when they used information obtained two years earlier to divert new models and persuade employees to join Ford, because the court found that the plaintiff took no action to terminate the defendants’ access to the confidential information. The court similarly rejected the unjust enrichment claim because a company that hires away from a competitor by offering higher salaries is not unjustly enriched by those actions.
Men Women NY Model Mgt., Inc. v Ford Models, Inc., Sup Ct, NY County, August 15, 2011, Kapnick, J, Index No. 601144/10.