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In an action pending in the Nassau County Commercial Division in New York, the Supreme Court vacated an order barring Catherine Scalia, a client of Ken Novikoff and Scott Green of Rivkin Radlerfrom working for TrueCar, an alleged competitor of her former employee, Cox Automotive. The court also denied Cox’s motion for a preliminary injunctive relief seeking to extend the restraint on her ability to work for TrueCar for one year. The case presented a novel issue in New York concerning the ability of a successor corporation to enforce an otherwise lawful noncompete containing a valid assignment clause (running to the benefit of the successor corporation).  Scalia resigned from her employment with Cox, who immediately sought to enforce the noncompete agreement. However, Scalia signed the noncompete while working for another company that was acquired by Cox. Cox claimed that, due to the assignment clause, it could enforce the noncompete as it was transferred to them upon the acquisition.  On Scalia’s behalf, Novikoff and Green persuaded the court that Scalia had in fact already complied with the terms of the one-year post-employment restrictions because the restricted period began to run at the time Scalia’s employment with the acquired company ended and not, as Cox argued, at the time of her resignation from Cox.

Choate Hall & Stewart in Boston represented client Calero Software, LLC, a portfolio company of Riverside Partners, in closing two add-on acquisitions since being backed by Riverside Partners four months ago.

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Jonathan Erway


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