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Hard to Predict if a NY Court Will Enforce a Non-Compete Agreement


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1/1/2016
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Although I have written extensively on the subject of non-compete agreements, setting forth some of the general principles and the exceptions to those rules that help dictate whether a particular non-compete agreement will or won'€™t be enforced by a New York court, I must concede that it'€™s often hard to predict with any degree of certainty what a New York court will do. That's why I give kudos to attorney Stephen Kramarsky, Esq., who authored an excellent article on New York non-compete agreements that recently appeared in the New York Law Journal.

The premise of his article is this: critical analysis of the courts' treatment of non-compete agreements has shown time and again that the question of whether these provisions will be upheld or rejected turns on the unique and specific facts of each case. Further complicating an attorney's ability to predict the outcome of a challenge to a non-compete agreement, the courts have frequently vacillated on these provisions  - even when the employees' agreements and positions were essentially the same, and even at the same company.

For example, in International Business Machines Corp. v. Visentin, a Federal Court in New York denied IBM's request for a preliminary injunction seeking to enforce a non-compete agreement; But in IBM Corp. v. Papermaster, a case that was decided just over two years ago, the same Federal Court upheld the restrictive covenant, holding that by allowing Visentin to work for Apple would "inevitably" lead to the disclosure of critical proprietary information. Quite frankly, it is hard to fault IBM for assuming they would win this fight; after all, both Papermaster and Visentin were "key, high-level technical managers, members of IBM's most important senior management committee with responsibility for some of the company's most important business initiatives."

But that underscores the essential point made above: it is very difficult to predict accurately whether a New York court will enforce a non-compete agreement, particularly when you're dealing with senior-level employees.  



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