Non-solicitation Rule Lifted in NY Fashion Agencies’ Heated Battle Over ‘Mass Exodus’ of 55 Models | New York Law Journal – Law.com

Behati Prinsloo of Elite Model Management arrives at the Vanity Fair Oscar Party on Sunday, Feb. 9, 2020. AP Photo: Evan Agostini

In a battle of major modeling agencies over the alleged stealing of talent, a state appeals court has ruled that one agency that had been barred from soliciting the other’s models—after being accused of causing the “mass exodus” of 55 models—is no longer restrained by a temporary injunction.

The agency that has won the lifting of the preliminary injunction, Elite Model Management, has argued in court papers that only about a dozen of the fashion models who departed last spring and summer from Men Women N.Y. Model Management landed at its agency, and that Men Women N.Y. is “in free fall” because of “self-inflicted wounds.”

The models at the center of what it appears could be an extended fight, meanwhile, include some huge industry names, such as Victoria’s Secret “Angel” Behati Prinsloo (married to singer Adam Levine) and prolific cover model Anna Ewers.

But what exactly occurred with the alleged poaching or “conspiracy designed to destroy” Men Women N.Y. by Elite Model was not before the Appellate Division, First Department.

Focusing on the issue at hand, the court ruled that the “provisional relief”—or preliminary injunction—against soliciting models that was granted last August by Manhattan Supreme Court Justice Melissa Crane was later rightfully vacated by Crane because of Men Women N.Y.’s failure to timely commence an arbitration where issues of proof should be heard.

In a terse decision, a First Department panel quoted CPLR 7502(c), which, it wrote, “authorizes courts to award provisional relief ‘in connection with an arbitration that is … to be commenced’ where ‘the award to which the applicant may be entitled may be rendered ineffectual without such … relief.’” The panel then noted that, “however, the applicant”—here, Men Women N.Y.—“is required to commence arbitration within 30 days of receiving the provisional relief.”

That 30-day commencement did not happen in the breach of contract-based case launched early last August by Men Women N.Y. against Elite Model, past model managers from Men Women who landed at Elite Model, and two past Men Women executives now being accused of conspiring with Elite Model, wrote the panel.

“Although defendants’ employment agreements also provide for provisional injunctive relief,” the panel said, “the purpose of these provisions was not to create an independent right to such relief regardless of whether plaintiffs’ underlying claims were ever actually arbitrated.”

“Rather,” wrote panel Justices Rolando Acosta, Dianne Renwick, Troy Webber and Ellen Gesmer, “the purpose of the injunctive relief clause here was to streamline the process of obtaining provisional relief in aid of arbitration by effectively conceding that the non-solicitation provisions [in employment contracts] were ‘reasonable and necessary’ and that breach would result in ‘irreparable injury.’”

While referring to an argument made by Men Women N.Y., the unanimous panel wrote that Men Women N.Y. “failed to demonstrate good cause to extend the time in which to commence arbitrations,” and wrote that “even if substitution of counsel would constitute good cause under other circumstances, it does not constitute good cause here, where the substitution came after the subject deadline had already expired and defendants had already moved to vacate” the preliminary injunction.

The underlying case, which made headlines in the New York Post and in a few fashion and entertainment-oriented publications last summer, is being fought tooth-and-nail by two major agencies.

They have lawyered up in New York to the hilt. Men Women N.Y. and its current CEO Julia Haart at first retained Gibson, Dunn & Crutcher and later switched to Quinn Emanuel Urquhart & Sullivan, while Elite Model snared White Plains-based litigation boutique Denlea & Carton. At the same time, various individual defendants linked up with counsel including Reppert Kelly & Vytell in New Jersey and Manhattan-based firms Wrobel Markham, Davis & Gilbert, and Ganfer Shore Leeds & Zauderer.

But it is the allegations flying back and forth that reveal how heated the litigation is. In the complaint lodged in Manhattan Supreme Court, for example, Men Women N.Y. wrote that “the architects of this conspiracy are a competitor modeling agency and its principals, who, in an effort to avoid fair competition and sidestep the process of honest talent development, have engaged in a series of unlawful and deceitful actions aimed at stealing its rival’s business.”

“Between March and July 2019, seventeen [Men] Women [N.Y.] employees—including 16 model managers—as well as 55 models, have left,” the complaint continues. It then claims that one of the individual defendants, Sergio Leccese—who is alleged to be a former CFO and COO at Men Women N.Y.—worked in conspiracy with Elite Model and its principals “in a flagrant breach of his fiduciary duties … to chang[e] unilaterally [Men] Women [N.Y.]’s contracts to enable Women’s models to cut ties with Women more easily.”

To boot, the complaint claims that “upon information and belief, some of the older men who currently lead ENY [Elite Model] have … condoned, facilitated or knowingly turned a blind eye to … exploitative conduct.”

Firing back with its own allegations last August, Elite Model claimed in preliminary injunction opposition papers that Men Women N.Y.’s action “is the desperate publicity stunt of a struggling model management agency in an attempt to staunch the flow of its own self-inflicted wounds.”

Elite Model’s court filing also alleged that Men Women N.Y.’s “owner refers to the employees as ‘cockroaches,’ its senior management belittle the current CEO’s temperament, experience and judgment, and an environment of fear and disrespect has permeated the agency. There is little wonder that a ‘mass exodus’ is taking place.”

While denying breaching of contracts or conspiracy to raid models to its own camp, Elite Model also claimed that “plaintiffs’ blatantly unclean hands betray the very interests which Plaintiffs profess to want to protect,” arguing in part that Men Women N.Y., among other acts, has “waged a guerrilla campaign to poach models from rival agencies.”

Crane, ruling in November to vacate her own preliminary injunction, was very direct with Men Women N.Y., according to transcript of a hearing before her.

Addressing the injunction issue, she said to the courtroom and plaintiffs, “CPLR 7502 (c) states that if an arbitration isn’t commenced within 30 days any injunction is void. By not commencing arbitration then, plaintiff affected a coup on the underlying issues over which this court really has no say,” and should be heard in arbitration.

“So all plaintiff had to do as a practical matter was to sit on its hands and the relief it sought would have been fait accompli,” she said.

Alex Spiro,  a lawyer for Men Women N.Y. and a Quinn Emanuel partner, could not be reached for comment.

Elite Model’s counsel at Denlea & Carton, named partner Jeffrey Carton, also could not be reached.

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