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Mere Speculation: A Fatal Flaw in a New York Non-Compete Action

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While New York non-compete law is not always clearly defined, several court decisions indicate that “mere speculation” alone will not be enough for a company to succeed with enforcing its non-compete agreement against a key employee. This could mean that even where a former key employee leaves a company and creates a potentially competing business, he may not be bound by the terms of his non-compete agreement. Since the financial and emotional consequences of battling a non-compete claim in New York are often steep, consult with a knowledgeable New York non-compete lawyer for guidance before taking any action that could trigger a claim.

A recent non-compete action filed by Cognizant Technology Solutions may serve as an example of the difficulties of succeeding in a non-compete violation action. Cognizant is asserting that its former vice president, Robert Kreft, violated the terms of his non-compete by creating and marketing a new business. In response, Mr. Kreft alleges that the new business is not in direct competition with Cognizant. 

If this action were filed in New York, the court would assess the following:

  • Did Kreft’s alleged non-compete violation go beyond mere “knowledge of the intricacies” of his former employer’s business operations?
  • Do Kreft’s alleged acts justify preventing him from using his knowledge and talents in this area?
  • Has Cognizant presented evidence to support a claim that Kreft’s actions have created ongoing damage to its “operations, reputation, or goodwill?”
  • Would replacing Kreft be virtually impossible?
  • Has Cognizant demonstrated the actual loss of clients or business?

To learn more about the complexities surrounding an alleged non-compete violation, contact an experienced New York business litigation lawyer today. Call our office at (888) 497-3410 for a free consultation.

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