In Eyes of the World, Inc. v. Boci, a New York court recently held that a former employee's restrictive covenant (non-compete agreement) prohibiting her from providing services to any client of her former employer was overly broad and, thus, unenforceable.
In this case, Defendant Boci worked for Plaintiff Eyes of the World, Inc., where she performed hair removal services. As an employee, Boci had signed a non-compete agreement which stated, "For a period of one (1) year following termination of your employment for any reason, you agree not to provide Salon Services in New York City to any client of Eyes of the World, Inc. for whom you provided services during the last twelve (12) months of your employment with Eyes of the World, Inc."
When Defendant Boci voluntarily resigned from her position, and began working for a competitor, Plaintiff sought to enforce the non-compete agreement, alleging that Boci performed services for eighty-six (86) former clients of Plaintiff at Boci's new place of employment within one (1) year of her termination.
The Court stated that, "In order to be enforceable, an anticompetitive covenant ancillary to an employment agreement must be reasonable in time and area, necessary to protect the employer's legitimate interests, not harmful to the public, and not unreasonably burdensome to the employee. ... Restrictive covenants are generally frowned upon by courts due to public policy considerations that seek to prevent restrictions on a person's livelihood. ... Consequently these covenants will be enforced only if reasonably limited temporally and geographically and then only to the extent necessary to protect the employer from unfair competition which stems from the employee's use or disclosure of trade secrets or confidential customer lists, or if the employee's services are unique or extraordinary."
Here, while Plaintiff attempted to establish that the services provided by Boci were unique and extraordinary, the Court rejected this argument, and found that Boci's skills were not unique or extraordinary, and furthermore, that it appeared clients "opted to follow Boci based on their needs and her ability." In addition, the Court found that there was no evidence that Boci had access to trade secrets, client lists, or proprietary information, ultimately holding that the non-compete clause was "unreasonable in its limitation, burdensome to the employee, and not necessary to protect the employer's legitimate interests."
The Court therefore struck down the restrictive covenant as overly broad and unreasonable, and dismissed Plaintiff's complaint.
Before signing a non-compete agreement, we always recommend that employees have a New York Non-Compete attorney review the agreement to ensure that the employee understands the terms of the agreement and the ramifications of signing it. Lastly, if you already signed a non-compete agreement and now have questions concerning the enforceability of your agreement, it's also smart to consult with a New York employment attorney.
