Faced with a lengthy restrictive covenant with a Florida choice of law provision - which is perhaps the most employer-friendly (and employee hostile) jurisdiction in the country, our client proactively filed a declaratory judgment action in New York, and was rewarded with a resolution that reduced the duration of his noncompete substantially - and all within 2 months of filing his complaint.
"How was he able to accomplish that?," you ask.
What Worked in Our Client's Favor
To be sure, there were several factors that enabled our client to obtain this favorable result, but without a doubt, the following were at the top of the list:
- From an optics perspective, our client had favorable facts: Simply put, our client's former employer terminated him without cause within 2 months of assuming ownership of the company, but still wanted to hold him to a restrictive covenant that lasted a full year. On its face, that does not really seem terribly reasonable.
- We drew a good judge for the case: As you may know, when you file an action, you don't know ahead of time which judge will be assigned to your particular case. Here, we were fortunate to get a really good judge in Federal court that conferenced this matter almost straight out of the gate, and helped angle this case towards an early resolution - and before substantial motion practice that the defendants had planned to change the venue of the case to Florida (which may, or may not, have succeeded).
- We had some favorable law for the argument that the case could stay in New York rather than Florida: Although the Agreement set forth a Florida venue and choice of law provision, we had a credible argument that venue could remain proper in New York under the New York Court of Appeals’ holding in Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364, 370, 12 N.Y.S.3d 606, 34 N.E.3d 357, 40 I.E.R. Cas. (BNA) 283, 165 Lab. Cas. (CCH) P 61601 (2015), which famously held that insofar as the New York courts are concerned, Florida choice-of-law provisions are unenforceable in relation to the non-solicitation provisions, because it deems Florida's approach "obnoxious" to these clauses.
- We had an adversary that was smart and reasonable: The importance of this factor can never be overstated; when you have an adversary that remains levelheaded and keeps sight of the big picture rather than acting in a mercenary-like fashion to obtain some ultimately Pyrrhic victory, the clients on all sides tend to achieve vastly better results. And this case was no exception.
