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You Can't Recover This for Violation of a Non-Compete Agreement in NY


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1/1/2016
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Sometimes, when a prospective client decides to go in another direction, you have to breathe a sigh of relief.

I was recently contacted by the proprietor of a small business, a cleaning service, and she wanted to sue one of her former employees for breaching a non-compete agreement, and starting a competing agency on company time, and to secure an injunction barring this former employee from unfairly competing against the business. Fair enough.

This proprietor also wanted her former employee to pay damages, and fork over every penny she made on the new business.

There was just one "small" problem, however: this proprietor had no way of proving what damages, if any, she sustained as a result of this former employee's actions. She couldn't point to a single client that left her to hire the former employee.

When I pointed out that as the plaintiff, it was her burden - not the former employee's burden - to demonstrate damages, she became agitated.

But when I told her that no, you can't bar the competing agency's employees (people who never worked for her, and who never signed an agreement with her) from working in that field, she became downright furious.

She refused to understand that you can't ask a New York court to impose a non-compete agreement on people that you can't even identify; She refused to understand that there are limits on what you can recover for the breach of a non-compete agreement under New York law.

 



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