MevRam Servs., LLC v 

Quadrum Hospitality Group, LLC

2024 NY Slip Op 31163(U)

April 4, 2024

Supreme Court, New York County

Docket Number: Index No. 652871/2023

Judge: James d'Auguste

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.
NYSCEF DOC. NO. 23 

INDEX NO. 652871/2023 

RECEIVED NYSCEF: 04/04/2024 

SUPREME COURT OF THE STATE OF NEW YORK 

NEW YORK COUNTY 

PRESENT: Hon. James E. d' Auguste 

Justice 

----------------------------------------------------X 

MEVRAM SERVICES, LLC, 

Plaintiff, 

-vQUADRUM HOSPITALITY GROUP, LLC, ARLO SOHO, 

LLC, ARLO NOMAD, LLC, ARLO MIDTOWN, LLC, 

Defendants. 

---------------------- ------X 

PART 55 

INDEX NO. 

MOTION DATE 

652871/2023 

08/21/2023 

MOTION SEQ. NO. ------=--00-=---1.:__ __ 

DECISION + ORDER ON 

MOTION 

The following e-filed documents, listed by NYSCEF document number (Motion 001) 9, 10, 11, 13, 14, 15, 

16, 17, 19, 21 

were read on this motion to/for DISMISS 

In Motion Sequence 001, defendants Quadrum Hospitality Group, LLC ("Quadrum"), 

Arla Soho, LLC, Arla Nomad, LLC, and Arla Midtown, LLC ("Arla defendants") ( collectively 

"defendants"), move for dismissal of claims in plaintiffMevRam Services, LLC's ("MevRam") 

complaint. Defendants oppose the motion. For the reasons set forth below, the motion is denied. 

MevRam is a full-service hospitality and commercial cleaning company that staffs 

employees, including housekeepers and front-desk employees for hotels; MevRam provides 

services based on agreements with commercial companies, such as hotels. Quadrum is the 

parent company of the Arla defendants, who each operate a hotel in New York City. MevRam 

and Quadrum entered into three service agreements for MevRam to provide engineering and 

housekeeping services to Quadrum's hotels (NYSCEF Doc. Nos. 10, 13). 

The action arises from MevRam's complaint asserting that defendants allegedly 

wrongfully breached the terms of three service agreements between the parties. Each agreement 

contains essentially the same terms and conditions, except for the particular employees and 

652871/2023 MEVRAM SERVICES, LLC, vs. QUADRUM HOSPITALITY GROUP, LLC ET AL 

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NYSCEF DOC. NO. 23 

INDEX NO. 652871/2023 

RECEIVED NYSCEF: 04/04/2024 

services MevRam would provide. Each agreement also contains a no-poaching provisionwhich prohibited either party engaging any staff employee of the other party for a period of 90 

days after termination of the agreements. The contracts additionally provide that if the nopoaching agreements were violated, the poaching party was required to continue the employee's 

assignment for 520 consecutive work hours or pay MevRam a fee equivalent to 520 work hours 

of such employee (NYSCEF Doc. Nos. 10, 17). 

Defendants move for dismissal of MevRam's claims related to the no-poaching provision 

asserting it is void, unenforceable and violates public policy. Defendants argue the no-poaching 

provision violates the New York City Displaced Building Service Workers Protection Act 

("DBSWPA"), and the New York City Displaced Hotel Service Workers Act (DHSW A"). 

Defendants assert that MevRam's claims that the "employees at issue were not displaced and 

remained employed by MevRam" is unsupported by any exception written into either law, and 

MevRam is simply "attempting an end-run around both of these laws" via enforcement of the nopoaching provision in the parties' contracts (NYSCEF Doc. No. 21 ). 

MevRam asserts that defendants breached the agreements by terminating them early 

without providing the requisite notice, and by poaching MevRam's employees immediately 

following termination of the contracts. MevRam contends that immediately after breaching the 

parties' agreements, defendants hired Proper Hospitality Services ("PHS") to replace MevRam, 

and PHS promptly hired 32 of MevRam's active employees to continue performing the same 

services they did under the agreements between MevRam and defendants. However, despite the 

breach, Mevram claims defendants refused to compensate MevRam fees owed, as required under 

the no-poaching provision of the parties' agreements (NYSCEF Doc. Nos. 10, 17). 

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Further, MevRam maintains that there is no support for defendants' arguments under the 

DBSWPA and the DHSW A claiming neither applies to the instant matter. Mevram notes that 

the employees at issue were not displaced and remained employed by MevRam with numerous 

other available assignments following defendants' breach of the parties' contracts. Additionally, 

MevRam notes that it is willing to provide alternative employment to its employees once a 

service agreement is terminated (NYSCEF Doc. Nos. 17, 21). 

Moreover, MevRam contends that contrary to defendants' assertions the liquidated 

damages clause within the parties' agreements is enforceable. MevRam claims the provision for 

liquidated damages within the parties' agreements is reasonably calculated based on a formula 

that was intended, at the time the parties entered into the agreements, to estimate the actual 

damages, and the amount of the liquidated damages is not grossly disproportionate to the actual 

damages suffered (NYSCEF Doc. No. 17) (see Truck Rent-A-Center, Inc. v. Puritan Farms 2nd, 

Inc., 41 NY2d 420 [1977]). 

Defendants' claims that the no-poaching provision violates the DBSWPA and DHSW A 

are meritless given that the employees were never displaced, and the two laws are not implicated 

herein. It is clear DHSW A does not apply as it deals with a change in control of a hotel. As 

there was no such change in control or identity of the hotels or hotels' employer herein as 

defendants still own and control the hotels, the DHSW A is inapplicable, and the no-poaching 

provision did not require defendants to violate that law. Hence, the no-poaching provision is 

enforceable against defendants (NYSCEF Doc. Nos. 10, 17). 

Similarly, while the DBSWPA on its face appears to be relevant to the instant matter, the 

cases analyzing claims under the DBS WP A concern circumstances where employees were 

actually displaced-when a new employer took over the management of a building, unlike here. 

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Guerrero v. Club Quarters Mgmt. Co., LLC, 74 Misc. 3d 224 [Sup Ct, NY County. 2021] 

(applying the DBSWPA where purchaser of hotel terminated plaintiff employees). Unlike in 

Guerrero, there was no change in defendants' hotels' management, instead defendants breached 

their contracts with MevRam to circumvent their obligations and poached MevRam's employees. 

Thus, even had PHS failed to retain the subject employees as the successor contractor for 

defendants, the employees would have remained employed by MevRam and continued to receive 

their normal pay and benefits (NYSCEF Doc. No. 17). In any event, even if defendants were 

required to hire these employees under the law due to defendants early termination of the parties' 

agreements, same does not change defendants' obligation to compensate plaintiffs for breach of 

the no-poaching provision of those agreements (NYSCEF Doc. No. 17). 

While the no-poaching provision restricts defendants' ability to poach MevRam's 

employees, it places no restrictions on the employees themselves. New York courts have noted a 

lack of precedent governing no-poaching provisions, thus, apply the same three-pronged 

reasonableness test utilized in ascertaining the validity of non-compete clauses. Reed Elsevier 

Inc. v. Transunion Holding Co., Inc., 2014 WL 97317, at *7 [Jan. 9, 2014, No. 13-Civ.-8739 

(PKC)] (citing OTG Mgmt, LLC v. Konstantinidis, 967 NY2d 823 [Sup. Ct. 2013]). The 

enforceability of a restrictive covenant requires an analysis of the particular facts and 

circumstances giving context to the agreement. Reed Elsevier Inc., 2014 WL 97317, at *7. 

Further, the no-poaching provision is designed to protect MevRam's legitimate business interest 

in preventing its "disintermediation" - cutting out the middleman. Design Partners, Inc. v. Five 

Star Electric Corp., 2017 WL 818364, at *14, n. 16 [ED NY. Mar. 1, 2017, No. 12-CV-2949 

(PKC) (VMS)]. 

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In Design Partners, the Court noted that where an alleged wrongdoing was committed 

by "one sophisticated business entity against another," "the powerful consideration of public 

policy which militate against sanctioning the loss of a man's livelihood are not implicated to the 

same extent as where an employer seeks to enforce a restrictive covenant against an employee." 

Id. Here, as both parties herein are sophisticated business entities, without the protection of the 

no-poaching provision in the parties' agreements, defendants would be allowed to hire 

MevRam's employees directly and disintermediate MevRam, thus making MevRam's whole 

function as a staffing agency obsolete. Hence, the no-poaching provision is valid, as is the 

enforceable liquidated damages clause against defendants within the parties' agreements. 

Accordingly, it is 

ORDERED that defendants' motion to dismiss is denied. 

This constitutes the decision and order of the Court. 

4/4/2024 

DATE 

CHECK ONE: 

James d'Auguste, J.S.C. 

APPLICATION: 

CHECK IF APPROPRIATE: ~ CASE DISPOSED 

GRANTED 0 DENIED 

SETTLE ORDER 

INCLUDES TRANSFER/REASSIGN 

NON-FINAL DISPOSITION 

GRANTED IN PART 

SUBMIT ORDER 

FIDUCIARY APPOINTMENT 

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□ REFERENCE 

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