Where NY's Courts Draw the Line on Non-Solicitation Clauses
At the risk of stating the obvious, there are many instances in which New York's courts will decline to enforce a non-solicitation clause in an employment contract. And this should come as no surprise at all, particularly given the general disfavor that the courts have expressed towards non-compete clauses.
If you are a New York employer, however, fret not: you probably still stand a far stronger chance of success in enforcing this clause than many other jurisdictions across the country. (See, e.g., "Why Massachusetts May Be Employee Heaven (at Least for Non-Competes")).
So, what criteria will New York's courts look to in deciding whether to enforce the terms of a clause barring the solicitation of the company's clients?
Fortunately, New York's courts have provided some guidance on this issue, stating as follows:
"[A]n anticompetitive covenant may prevent the competitive use of client relationships that the employer assisted the employee in developing through the employee's performance of services in the course of employment (see Gelder Med. Group v Webber, 41NY2d680, 685 ). A covenant will be rejected as overly broad, however, if it seeks to bar the employee from soliciting or providing services to clients with whom the employee never acquired a relationship through his or her employment or if the covenant extends to personal clients recruited through the employee's independent efforts."
There is an important caveat to this rule, though: This is almost always a case-sensitive inquiry.
This means, that as a practical matter, it is highly unlikely that such a claim - even if it is a very weak one - will be dismissed before a fair amount of discovery, such as document exchange and depositions have been conducted.