Upon the following papers read on this motion to modify preliminary injunction; Notice of Motion and supporting papers 93-101; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 102-103; Replying Affidavits and supporting papers 104; it is,

ORDERED that this motion by the defendants RB Retail & Services Software, LLC and Fullsteam Operations, LLC, for an order modifying the preliminary injunction granted by an order of this court dated January 29, 2021, which enjoined them from soliciting customers of the plaintiffs or their affiliates who became customers of the plaintiffs under the terms of the referral agreement with the defendant R.B.C.K. Enterprises, Inc. is denied.

The plaintiffs (collectively "EVO") are a global credit- and debit-card payment- processing company. EVO Merchant Services, LLC ("EVO Merchant"), is a wholly owned subsidiary of EVO Payments International, LLC ("EVO Payments"). On July 5, 2018, EVO Merchant entered into a referral agreement with the defendant R.B.C.K. Enterprises, Inc. ("RBCK") in which RBCK agreed to refer customers to EVO for payment processing in exchange for a referral fee (the "Referral Agreement"). The Referral Agreement provided that, during the period of time that the agreement was in effect and for a period of three years after its termination, RBCK would not solicit EVO's customers or take any action that would cause EVO's customers to terminate their relationships with EVO. The Referral Agreement also provided that all data belonging to or relating to the business of the other party, including the list of merchants referred to EVO, was confidential. EVO and RBCK entered into a confidentiality and non-disclosure agreement on the same date (the "Confidentiality Agreement") in which they agreed not to use the confidential information of the other, including information about customers and business relationships, for their own purposes.

Many of the customers that RBCK referred to EVO were pool and spa merchants. According to the plaintiffs, approximately 688 pool and spa merchants in RBCK's portfolio had active accounts with EVO as of September 2019 (the "Pool Merchants"). RBCK contacted EVO in September 2019 seeking to modify the Referral Agreement by eliminating the three-year non-solicitation provision upon termination thereof. EVO refused to modify the Referral Agreement. In October 2019, RBCK entered into an asset-purchase agreement with the defendants RB Retail & Services Software LLC ("RB") and Fullsteam Operations LLC ("Fullsteam"). RB is owned by Fullsteam, which is a direct competitor of EVO. By a letter to EVO dated December 11, 2019, RBCK terminated the Referral Agreement. Between September 2019 and May 2020, approximately 114 Pool Merchants closed their accounts with EVO and another 33 ceased all processing activity with EVO.

EVO commenced this action, inter alia, for breach of contract against RBCK, RB, and Fullsteam. EVO alleges that the defendants used its confidential information for their own financial gain by soliciting the Pool Merchants and causing them to cease using EVO's services in violation of the Referral and Confidentiality Agreements. EVO seeks to impose liability on RB and Fullsteam by imposing successor liability on them. The plaintiffs allege that the sale of [*2]RBCK's assets to RB was a defacto merger and a fraudulent attempt by RBCK to avoid its obligations under the Referral and Confidentiality Agreements. In support thereof, the plaintiffs allege that, shortly after the asset sale, RBCK ceased it business operations; that RBCK and RB have common shareholders, officers, directors, and employees; that they have substantially similar names; that they sell and operate the same software; that they have the same office address, telephone number, and email address; and that RB acknowledges on its website that it is the same entity as RBCK

The plaintiffs moved by order to show cause for a preliminary injunction, inter alia, enjoining the defendants from soliciting or contacting EVO's customers, including the Pool Merchants. The court signed the order to show cause on July 8, 2020, with a temporary restraining order enjoining RBCK, pending further order of the court, from soliciting customers of EVO who became customers of EVO or its affiliates under the terms of the Referral

Agreement. In addition, the defendants were directed to maintain all records of any transactions with EVO's former customers. By an order dated October 14, 2020, the court granted the plaintiffs' motion for a preliminary injunction to the extent of continuing the temporary restraining order pending further order of the court. The plaintiffs moved for leave to renew their motion for a preliminary injunction. By an order dated January 29, 2021, the court granted renewal and, upon renewal, enjoined all of the defendants from soliciting customers of the plaintiffs or their affiliates who became customers of the plaintiffs under the terms of the Referral Agreement. RB and Fullsteam now move pursuant to CPLR 6314 for an order modifying the preliminary injunction to the extent of releasing them therefrom.

RB and Fullsteam contend that, in order to comply with the injunction, they requested from EVO a list of the customers referred to it by RBCK. RB and Fullsteam contend that the customer list produced by EVO contains only the names and mailing addresses of the customers referred to EVO and the ID numbers given to them by EVO. RB and Fullsteam contend that, since the list is devoid of any confidential or propriety information, injunctive relief is not necessary.

It is well settled that a contract is to be construed in accordance with the parties' intent (MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640, 645), and that best evidence of what the parties intended is what they said in their writing (Greenfield v Phillies Records, Inc., 98 NY2d 562, 569). A written agreement that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms (Id.). A court may not write into a contract conditions the parties did not include by adding or excising terms under the guise of construction (see, Reiss v Financial Performance Corp., 97 NY2d 195, 199).

The Referral Agreement specifically provides, "This Agreement, the list of persons constituting Referred Merchants ^[FN1] hereunder, and all payments and reports delivered hereunder constitute the Confidential Information of EVO [emphasis added]." Thus, the parties agreed that the list of customers referred to EVO under the Referral Agreement would be confidential. They also agreed that RBCK would not solicit those customers or take any action that would cause them to terminate their relationship with EVO during the period of time that the [*3]Referral Agreement was in effect and for a period of three years after its termination (the "Non-Solicitation Provision").

Relying on cases involving restrictive covenants in employment contracts, RB and Fullsteam contend that the Non-Solicitation Provision is unenforceable. Restrictive covenants in employment contracts, however, are subject to more exacting scrutiny than are those in contracts for the sale of a business or ordinary commercial contracts because public policy favors economic competition and individual liberty and seeks to shield employees from the superior bargaining position of employers (Mathias v Jacobs, 167 F Supp 2d 606, 611 [SDNY]). A restrictive covenant in a contract for the sale of a business limits the seller's right to launch a new enterprise which competes with the business sold (Id. at 610). Such covenants are routinely enforced because the buyer has, in part, bargained for the good will of the seller's customers (Id. at 610-611). If the seller is permitted to initiate a competing enterprise, which presumably would attract the patronage of the seller's former customers, the buyer would not receive the full benefit of its bargain (Id. at 611).

The court finds that the Referral Agreement is more analogous to a contract for the sale of a business than an employment contract. Like the buyer of a business, what EVO bargained for was the good will of the customers referred to it by RBCK during the term of the Referral Agreement and for a period of three years after its termination. The Non-Solicitation Provision was part of the bargain negotiated by the parties for which RBCK was paid referral fees. To allow RB and Fullsteam to solicit EVO's customers prior to the expiration of the three-year period would deprive EVO of the benefit of its bargain. Accordingly, the court finds that the Non-Solicitation Provision is a reasonable restriction protecting EVO's legitimate interest in keeping the customers for which it paid a fee.

In view of the foregoing, the court finds that the plaintiffs are likely to succeed on the merits and that the balance of the equities is in their favor. Contrary to RB and Fullsteam's contentions, there is sufficient evidence in the record to support EVO's theory of successor liability. Moreover, the loss of customer good will, sales, and market share can constitute irreparable harm for preliminary injunction purposes (see, Alside Div. of Associated Materials v Leclar, 295 AD2d 873, 874; Sylmark Holdings Ltd. v Silicone Zone Intl. Ltd., 5 Misc 3d 285, 299). Accordingly, the motion is denied.