Hayley Paige Gutman is well known as a bridal designer for her feminine yet playful wedding dress designs and related apparel, which have been regularly featured on TLC’s “Say Yes To The Dress.” For over a year and a half, Gutman has been embroiled in a bitter and publicized legal battle with her now former employer and bridal design and fashion company, JLM Couture. JLM sued Gutman for alleged breaches of Gutman’s employment agreement, stemming from, among other things, Gutman’s attempts to use her name to promote non-JLM brands during her employment with JLM, and personal use of social-media accounts to promote third-party products. In this article, we discuss the viability of restrictive covenants under New York law, and the relevant factors analyzed by the courts in enjoining Gutman’s activities and competition with JLM.
Non-Compete Agreements Remain Enforceable Under New York Law
In 2011, when Gutman was 25 years old and relatively new to the fashion industry, she was hired by JLM as a designer of wedding and bridesmaid dresses. Gutman signed an employment agreement with JLM for a fixed term, which contained, among other things, certain confidentiality, proprietary rights, trade secret and non-compete provisions. Specifically, Gutman agreed that she would not compete with JLM, directly or indirectly, during the term of the employment agreement (July 13, 2011 which was extended through Aug. 1, 2022 (the term)), by engaging in or associating with any person, organization or enterprise that engages in the manufacture or sale of goods within JLM’s business (the non-compete agreement). She also agreed to grant JLM “the exclusive world-wide right and license to use her name” during the term plus two years thereafter (“Designer’s Name” defined as “‘Hayley,’ ‘Paige,’ ‘Hayley Paige Gutman,’ ‘Hayley Gutman,’ ‘Hayley Paige,’ or any derivative thereof”), in connection with “the design, manufacture, marketing and/or sale of bridal clothing, bridal accessories and related bridal and wedding items,” including the right to register such name as trademark(s). Gutman further agreed that, in the event she breached any provision of her employment agreement, JLM would be entitled to injunctive relief.
