                                                         [DO NOT PUBLISH]


            IN THE UNITED STATES COURT OF APPEALS
                                                               FILED
                    FOR THE ELEVENTH CIRCUITU.S. COURT OF APPEALS
                      ________________________ ELEVENTH CIRCUIT
                                                          AUGUST 19, 2010
                             No. 10-11890                   JOHN LEY
                         Non-Argument Calendar                CLERK
                       ________________________

                  D. C. Docket No. 1:09-cv-02999-TWT

MICHAEL A. MOHR,
D. JACK SAWYER, JR.,
TODD TAUTFEST,

                                                 Plaintiffs-Counter-Defendants-
                                                 Counter-Claimants-Appellees,

                                  versus

BANK OF NEW YORK MELLON CORPORATION,

                                                 Defendant-Counter-Claimant-
                                                 Counter-Defendant-Appellant.


                       ________________________

                Appeal from the United States District Court
                   for the Northern District of Georgia
                     _________________________

                             (August 19, 2010)

Before WILSON, PRYOR and ANDERSON, Circuit Judges.

PER CURIAM:
      This appeal is the second time that we have reviewed the propriety of

injunctive relief in this case. In the first appeal, Bank of New York Mellon

Corporation challenged a preliminary injunction that prohibited it from enforcing

noncompetition and nonsolicitation covenants executed by Mohr and Sawyer

during the sale of their investment management business to Mellon Corporation.

We ruled that the restrictive covenants were enforceable, vacated the preliminary

injunction, and remanded for the district court to review the reasonableness of the

covenants. Mohr v. Bank of N.Y. Mellon Corp., No. 09-15813, slip op. at 10–16

(11th Cir. Mar. 24, 2010). On remand, the district court preliminarily enjoined

Mohr and Sawyer from soliciting the employees of Mellon Corporation, but

refused to enjoin preliminarily Mohr and Sawyer from competing against Mellon

Corporation or soliciting its customers. Because Mellon Corporation is entitled to

a preliminary injunction that enforces the covenants not to compete and not to

solicit, we reverse and remand with instructions to enter a preliminary injunction

against Mohr and Sawyer.

                                I. BACKGROUND

      We included in our first opinion excerpts of restrictive covenants executed

by Mohr and Sawyer that were relevant to determining the level of scrutiny to

apply to those covenants. Id., slip op. at 2–7. In this opinion, we include excerpts



                                          2
of the noncompetition and nonsolicitation covenants that are material to our

inquiry about whether those covenants are reasonable. We repeat only those facts

necessary to resolve this appeal.

      In the Purchase Agreement and employment agreements, Mohr and Sawyer

covenanted not to compete against the Mellon Corporation. Section 5.10 of the

Purchase Agreement provided that Mohr and Sawyer would not compete against

Mellon Corporation within 50 miles of any city listed on an attached schedule for

twelve months after termination or resignation. Id., slip op. at 3–5. The schedule

listed 27 cities in Georgia and South Carolina and 16 cities in 12 other states. In

the event Mellon Corporation ended its business activities in a particular city, the

covenant stated that city would be eliminated from the schedule:

           (c) [Mohr and Sawyer] hereby acknowledge and agree that in the
    event [Mellon Corporation] (or any Successor) ceases to carry on the
    business of the Company or a like or similar business to that of the
    Company in a portion of the Restricted Territory, this Section 5.10 shall
    be deemed to expire only with respect to that portion of the Restricted
    Territory and shall continue in full force and effect with respect to the
    remainder of the Restricted Territory . . . .

The noncompetition covenant stated that its time, scope, and geographic area was

reasonable and integral to the contemporaneous sale and employment transactions:

          (d) The parties acknowledge that the time, scope, geographic area
    and other provisions of this Section 5.10 have been specifically
    negotiated by sophisticated commercial parties and agree that (i) all such
    provisions are reasonable under the circumstances of the transactions

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   contemplated hereby, (ii) are given as an integral and essential part of
   the transactions contemplated and (iii) but for the agreement of [Mohr
   and Sawyer] in this Section 5.10, [Mellon Corporation] would not have
   entered into or consummated the transactions contemplated hereby.
   [Mohr and Sawyer] have independently consulted with their respective
   counsel and have been advised in all respects concerning the
   reasonableness and propriety of the covenants contained herein, with
   specific regard to the business to be conducted by the Company and its
   Affiliates, and represent that this Section 5.10 is intended to be and shall
   be fully enforceable and effective in accordance with its terms.

The employment agreements cross-referenced the noncompetition covenant in the

Purchase Agreement and stated that the restrictive covenant was part of the

consideration for the purchase of The Arden Group and employment of Mohr and

Sawyer:

         3.10 Noncompetition. Employee agrees to be bound by the
   noncompetition provisions set forth in Section 5.10 of the Purchase
   Agreement. Employee acknowledges that the time, scope, geographic
   area and other provisions of Section 5.10 of the Purchase Agreement
   have been specifically negotiated by the parties and agrees that (a) all
   such provisions are reasonable under the circumstances of the
   transactions contemplated by this Agreement and the Purchase
   Agreement, (b) are given as an integral and essential part of this
   Agreement and the Purchase Agreement and (c) but for the agreement of
   Employee in Section 5.10 of the Purchase Agreement, the Purchaser
   would not have agreed to the acquisition of the assets of the Seller and
   the [Mellon Corporation] would not have entered into this Agreement.

      The employment agreements also contained a covenant not to solicit the

customers of Mellon Corporation. The restrictive covenant prohibited Mohr and

Sawyer from soliciting either the customers of The Arden Group and Mellon



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Corporation or prospective customers that Mohr and Sawyer had contacted on

behalf of Mellon Corporation:

           3.05      Solicitation of Clients. Employee recognizes and
   acknowledges that it is essential for the proper protection of Confidential
   Information that Employee be restrained from soliciting business of or
   doing business with Customers (as defined below) for any business
   purpose, other than Mellon’s own business purpose. During the
   Restricted Period, Employee shall not, in any capacity, directly or
   indirectly, (i) solicit the Asset Management Services (as defined below)
   business of any Customer for any other person or entity, (ii) divert,
   entice, or otherwise take away from the Company the Asset Management
   Services business or patronage of any Customer, or attempt to do so, or
   (iii) solicit or induce any Customer to terminate or reduce its business
   relationship with the Company with respect to Asset Management
   Services. For purposes of this Agreement, “Asset Management Services”
   shall mean providing investment advisory or investment management
   services, or any Fiduciary Services (as such term is defined in the
   Purchase Agreement), to individual or institutional customers. For
   purposes of this Agreement, “Customer” shall mean any person or entity
   (a) who (1) received Asset Management Services from the Seller at any
   time during the two (2) year period immediately preceding the Effective
   Date and (2) received Asset Management Services from the Seller, the
   Company or an affiliate of the Company at any time during the two (2)
   year period immediately preceding the date of termination of
   Employee’s employment with the Company, or (b) who Employee
   contacted, directly or indirectly, in whole or in part, on behalf of
   Company to provide Asset Management Services within the two (2) year
   period immediately preceding the date of termination of Employee’s
   employment with the Company.

      After Mohr and Sawyer worked in the Atlanta, Georgia, office of the Mellon

Corporation for about six years, they resigned and accepted employment in the

Atlanta office of a competitor, Wilmington Trust Company. Mohr, slip op. at 7.



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Two days after their resignation, Mohr and Sawyer filed a complaint that requested

a declaratory judgment that the restrictive covenants were “invalid and

unenforceable . . . under Georgia law” and an injunction to prevent Mellon

Corporation from enforcing the covenants. Id., slip op. at 7–8. Mellon

Corporation counterclaimed and requested both a declaratory judgment that the

restrictive covenants were enforceable and a temporary restraining order to prevent

Mohr and Sawyer from violating the covenants. Id., slip op. at 8.

      The district court enjoined Mellon Corporation from enforcing the restrictive

covenants, but this Court vacated the preliminary injunction. Id., slip op. at 16.

We held that the restrictive covenants were executed ancillary to the sale of Mohr

and Sawyer’s business, and we remanded for the district court to examine the

reasonableness of the covenants. Id., slip op. at 13–16.

      On remand, Mellon Corporation again moved for a preliminary injunction.

Mellon Corporation argued that Mohr and Sawyer had breached both the

noncompetition and nonsolicitation covenants. Mellon Corporation submitted

evidence that Mohr and Sawyer had breached the covenants in three ways: Mohr

and Sawyer had contacted indirectly some of their former customers; Sawyer had

solicited two employees of Mellon Corporation; and some customers of Mohr and

Sawyer had moved their business to Wilmington Trust. Mohr and Sawyer



                                           6
responded that the restrictive covenants were overbroad and were not “enforceable

with or without blue penciling.” Mohr and Sawyer also argued that Mellon

Corporation could not prove that the restrictive covenants had been breached or

that it had suffered irreparable harm.

      After an evidentiary hearing, the district court preliminarily enjoined Mohr

and Sawyer from soliciting employees of Mellon Corporation, but the district court

refused preliminarily to enjoin Mohr and Sawyer from competing against or

soliciting customers of Mellon Corporation. The district court stated that Mellon

Corporation was unlikely to prevail on the merits because “it [was] not clear . . .

what” the company was “purchasing when [it] bought the assets of The Arden

Group and attained a no-compete, no-solicitation agreement”; the court was “not

persuaded” that Mellon Corporation “ha[d] suffered or [would] suffer irreparable

injury”; and Mellon Corporation had not “shown that the balance of the harms

favor[ed] issuing a temporary restraining order or a preliminary injunction.”

                          II. STANDARDS OF REVIEW

      “The ultimate decision to grant or deny a preliminary injunction is reviewed

for abuse of discretion, but the determinations of law the district court makes in

reaching that decision are reviewed de novo.” Bailey v. Gulf Coast Transp., Inc.,

280 F.3d 1333, 1335 (11th Cir. 2002). We review related findings of fact for clear



                                           7
error. Cumulus Media, Inc. v. Clear Channel Commc’ns, Inc., 304 F.3d 1167,

1171 (11th Cir. 2002).

                                  III. DISCUSSION

      We remanded this case for the district court to review the restrictive

covenants for reasonableness, but it failed to do so. That inquiry turns on whether

“the restricted activity protect[ed] the . . . legitimate business interests” of Mellon

Corporation. Mohr, slip op. at 15–16 (quoting Drumheller v. Drumheller Bag &

Supply, 420 S.E.2d 331, 335 (Ga. Ct. App. 1992)). Under Georgia law, restrictive

covenants are judged “‘in terms of [their] limitations on time and territory and . . .

description of the prohibited activity.’” Hicks v. Doors By Mike, Inc., 579 S.E.2d

833, 836 (Ga. Ct. App. 2003) (quoting Carroll v. Ralston & Assocs., P.C., 481

S.E.2d 900, 902 (Ga. Ct. App. 1997)); Drumheller, 420 S.E.2d at 335.

Reasonableness is context-specific: restrictive covenants “are considered in light

of the specific factual situation and the nature of the terms of the covenant.” Annis

v. Tomberlin & Shelnutt Assocs., Inc., 392 S.E.2d 717, 721 (Ga. Ct. App. 1990).

Because Mohr and Sawyer executed the noncompetition and nonsolicitation

covenants “ancillary to the sale of [their] business,” the covenants are “subject to

much less scrutiny.” Am. Control Sys., Inc. v. Boyce, 694 S.E.2d 141, 145 & n.17

(Ga. Ct. App. 2010) (citing Dalrymple v. Hagood, 271 S.E.2d 149, 150 (Ga. 1980),



                                            8
and Ins. Ctr., Inc. v. Hamilton, 129 S.E.2d 801, 804–05 (Ga. 1963)).

      Mellon Corporation argues that the district court erred when it refused to

enjoin Mohr and Sawyer from competing against or soliciting the customers of

Mellon Corporation. Mellon Corporation argues that the noncompetition and

nonsolicitation covenants survive the low level of scrutiny applied to covenants

executed ancillary to the sale of a business and that it is entitled to a preliminary

injunction. We address each covenant in turn and then address whether Mellon

Corporation is entitled to a preliminary injunction.

                   A. The Covenant Not to Compete is Reasonable.

      Because the noncompetition covenant was the product of an arms’ length

negotiation between Mellon Corporation and Mohr and Sawyer, the covenant is

entitled to “substantial protection and latitude.” Hicks, 579 S.E.2d at 835 (quoting

Attaway v. Republic Servs. of Ga., LLP, 558 S.E.2d 846, 848 (Ga. Ct. App.

2002)). A restrictive covenant in the sale of a business may be drafted broadly.

Annis, 392 S.E.2d at 721. Mohr and Sawyer argue that the scope of the

noncompetition covenant, which prohibits them from “engag[ing] . . . in any

capacity” in another business that has “activities, products or services . . . similar to

providing investment advisory or investment management services,” is overbroad,

but the two businessmen “specifically negotiated” the terms of the covenant and



                                            9
agreed it was “reasonable under the circumstances.” See Am. Control Sys., 694

S.E.2d at 143 n.3, 145 (finding reasonable a covenant not to “directly, or indirectly

. . . be connected with or concerned in any business enterprise or employment

which shall be in competition with the business of” the purchaser). The limitation

on Mohr and Sawyer is permissible under the “much lesser scrutiny afforded sale

of business contracts.” Habif, Arogeti & Wynne, P.C. v. Baggett, 498 S.E.2d 346,

353 (Ga. Ct. App. 1998) (citing Dalrymple, 271 S.E.2d 149).

      The district court ruled that the territorial restriction in the noncompetition

covenant was too vague to enforce, but we disagree. Mohr and Sawyer agreed not

to compete with Mellon Corporation within a 50-mile radius of specific cities, and

Georgia courts have upheld similar territorial restrictions. See Annis, 392 S.E.2d

at 721–22 (50-mile radius “from the Company’s principal place of business in

Augusta, Georgia”); Hicks, 579 S.E.2d at 835–36 (50-mile radius of Conyers,

Georgia); see also Nat’l Settlement Assocs. of Ga., Inc. v. Creel, 349 S.E.2d 177,

179–80 (Ga. 1986) (upholding under strict scrutiny a covenant not to compete

within a 200-mile radius of Atlanta, Georgia). Georgia law “‘does not require

exact precision; it forbids unreasonably broad territorial coverage,’” Reardigan v.

Shaw Indus., Inc., 518 S.E.2d 144, 147 (Ga. Ct. App. 1999) (quoting Sysco Food

Svcs. of Atlanta, Inc. v. Chupp, 484 S.E.2d 323, 325 (Ga. Ct. App. 1997)), and



                                          10
Mohr and Sawyer can determine where they may compete against Mellon

Corporation. Although the district court stated that it was “pretty silly” to “define

the geographic scope of the non-compete agreement” based on business interests of

Mellon Corporation in 2003, territorial restrictions defined at the time of a sale

give sellers fair notice and the “ability to determine with certainty the prohibited

territory” while allowing purchasers to prevent the “possible unfair appropriation

of contacts” and “customer relationships” that they pay to acquire, Habif, 498

S.E.2d at 351. Mohr and Sawyer argue that the substantial growth of Mellon

Corporation eliminates the need for the territorial restrictions, but prosperity

provides all the more reason to protect clientele.

      Although Mohr and Sawyer may not have contacts in all the cities listed in

the schedule, the reasonableness of territorial restrictions in the sale of a business is

determined by “the territory served by the employer, not by the employee.” Id. at

352; see Chaichimansour v. Pets Are People Too, 485 S.E.2d 248, 249 (Ga. Ct.

App. 1997) (a covenant not to compete can “preclude[] competition with respect to

clients with whom the employee had not had contact while working for the

employer”). The Arden Group and Mellon Corporation had business interests in

the named cities, and Mohr and Sawyer agreed expressly that the “geographic

area” was “reasonable” and “an integral and essential part of” the sale of their



                                           11
business and their employment with Mellon Corporation. See Rash v. Toccoa

Clinic Med. Assocs., 320 S.E.2d 170, 174 (Ga. 1984).

      If the schedule of cities is stale, the noncompetition covenant provides a

remedy. The covenant states that if Mellon Corporation ends its business in a

particular city, that city is “deemed to expire.” The district court need only “blue

pencil” any cities in which Mellon Corporation no longer does business. See New

Atlanta Ear, Nose & Throat Assocs., P.C. v. Pratt, 560 S.E.2d 268, 273 (Ga. Ct.

App. 2002) (a court may “blue pencil” to “limit an area, thus making it

reasonable”). That the list may be reduced does not invalidate the covenant;

“indeed, the narrowing aspect of the covenant only work[s] to the . . . advantage

[of Mohr and Sawyer], as the maximum number of locations covered by the

covenant [is] set and immovable.” Id. at 272.

               B. The Covenant Not To Solicit Clients is Reasonable.

      Mohr and Sawyer argue that the nonsolicitation covenant is overbroad

because it lacks a territorial restriction and because they were prohibited from

soliciting all customers of Mellon Corporation, but these arguments fail. The

restrictive covenant was tailored to prevent Mohr and Sawyer from pirating

customers they had sold to, obtained for, or contacted on behalf of Mellon

Corporation. Mellon Corporation purchased “the Customers of [The Arden



                                          12
Group]” and the “goodwill associated with [The Arden Group] and [its] future

prospects,” Mohr, slip op. at 3, and the nonsolicitation covenant protects those

interests. See Hicks, 579 S.E.2d at 836 (nonsolicitation covenant was “reasonable

and essential to protect the value of the business . . . purchased as well as the good

will of its customer base”); Carroll, 481 S.E.2d at 902 (affirming decision to enjoin

accountant from soliciting customers he had sold to purchaser). Because Mohr and

Sawyer agreed they would not solicit their former and prospective customers,

“‘there is no need for a territorial restriction expressed in geographic terms.’”

Palmer & Cay of Ga., Inc. v. Lockton Cos., 629 S.E.2d 800, 804 (Ga. 2006)

(quoting W.R. Grace & Co. v. Mouyal, 422 S.E.2d 529, 533 (Ga. 1992)).

   C. Mellon Corporation Is Entitled To a Preliminary Injunction to Enforce the
                             Restrictive Covenants.

      To obtain a preliminary injunction, Mellon Corporation had to satisfy a four-

part test. Mellon Corporation had to establish a “substantial likelihood of success

on the merits,” it would suffer an “irreparable injury . . . unless the injunction

issues,” its injury outweighs any damage to Mohr and Sawyer, and the injunction

would “not be adverse to the public interest.” Ferrero v. Associated Materials Inc.,

923 F.2d 1441, 1448 (11th Cir. 1991). Mellon Corporation satisfied its burden.

      The district court ruled that Mellon Corporation could not prevail on the

merits because the restrictive covenants are vague and overbroad, but the

                                           13
covenants are reasonable. The covenants protect the “legitimate business interests”

of Mellon Corporation. Drumheller, 420 S.E.2d at 335. Mellon Corporation

established a substantial likelihood of success on the merits.

      The district court also ruled that Mellon Corporation would not suffer

irreparable harm without an injunction and the balance of harms favored Mohr and

Sawyer, but we disagree. The record establishes that Mellon Corporation paid

handsomely to acquire the goodwill and wealthy clientele that Mohr and Sawyer

had cultivated for The Arden Group. Mellon Corporation employed Mohr and

Sawyer to retain that customer base. Mellon Corporation was deprived of the

benefit of its bargain when Sawyer and Mohr left and enticed former customers to

transfer their business to Wilmington Trust. See Ins. Ctr., 129 S.E.2d at 805

(“Where the goodwill [of a business] is sold and [the seller] is permitted to solicit

and take the business, the goodwill is destroyed.”). “Although economic losses

alone do not justify a preliminary injunction, ‘the loss of customers and goodwill is

an irreparable injury.’” BellSouth Telecomms., Inc. v. MCIMetro Access

Transmission Servs., LLC, 425 F.3d 964, 970 (11th Cir. 2005) (quoting Ferrero,

923 F.2d at 1449); see Bijou Salon & Spa, LLC v. Kensington Enters., Inc., 643

S.E.2d 531, 534 (Ga. Ct. App. 2007) (injunctive relief appropriate when sellers

violate noncompetition and nonsolicitation covenants); Carroll, 481 S.E.2d at 902.



                                          14
Mohr and Sawyer argue that monetary losses suffered by Mellon Corporation are

not sufficiently “dramatic” to justify injunctive relief, but “this Court has held

‘specious’ [the] argument suggesting that, in deciding this element of the

preliminary injunction calculus, the court ought to compare the actual losses

sustained to the size of the company.” Ferrero, 923 F.2d at 1449.

      Mohr and Sawyer do not face serious injury. Mohr and Sawyer might have

to relocate their offices, but they will retain their positions with Wilmington Trust.

During the brief interim in which they must abide by the restrictive covenants,

Mohr and Sawyer can continue to conduct business outside the restricted territory.

      A preliminary injunction also serves the interests of the public. Because

Mohr and Sawyer agreed that the restrictive covenants constituted “a significant

part of the consideration for the purchase of the business,’” the covenants should

be given “substantial protection and latitude.” Hicks, 579 S.E.2d at 835 (quoting

Attaway, 558 S.E.2d at 848). Mohr and Sawyer argue that customers will lose

their preferred money managers, but Mohr and Sawyer may advise any former

customer they do not solicit to move their investment accounts to Wilmington

Trust. That customers might not be aware of Mohr’s and Sawyer’s resignations

will not trump “the law’s interest in upholding and protecting freedom to contract

and to enforce contractual rights and obligations,” Rash, 320 S.E.2d at 174,



                                           15
particularly when the two businessmen “specifically negotiated” and agreed to the

restrictive covenants.

                               IV. CONCLUSION

      We REVERSE the denial of a preliminary injunction to prevent Mohr and

Sawyer from competing against or soliciting the customers of Mellon Corporation,

and we REMAND with instructions for the district court to enter a preliminary

injunction that Mohr and Sawyer not compete against or solicit the customers of

Mellon Corporation.

      REVERSED and REMANDED with instructions.




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