Lauri Rasnick, a Member of the Firm in the Labor and Employment practice, in the New York office, wrote an article titled “Drafting Customer Nonsolicitation Provisions in NY.” (Read the full version — subscription required.)
Following is an excerpt:
A recent New York Appellate Division First Department decision, TBA Global LLC v. Proscenium Events LLC, et al., Index Nos. 10948, 651171/12, (1st Dept Feb. 5, 2014), may not answer all questions about drafting enforceable nonsolicitation provisions, but it does shed some light on the current state of New York law.
The Lower Court Decision
The case was brought by TBA Global LLC, a live events marketing company that arranges and produces live event programs and marketing presentations for companies and products, against three former employees and their new company. Each of the former employees was subject to a nonsolicitation contract. After they simultaneously resigned, the three former employees all began to immediately compete with TBA.
TBA’s complaint alleged that the former employees improperly set up the competing business while employed at TBA, and that they violated their restrictive covenants through their activities. On summary judgment, the trial court only considered the latter claim — whether the restrictive covenants at issue were enforceable as a matter of law.