New York courts have long exercised caution when asked to enforce provisions of employment agreements that purport to restrain an employee from competing with his or her former employer.1 The New York Court of Appeals explained that the “judicial disfavor of these covenants is provoked by ‘powerful considerations of public policy which militate against sanctioning the loss of a man’s livelihood.’”2 Accordingly, a restrictive covenant of this type will be enforced only “to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.”3
Two recent opinions by justices of New York’s Commercial Division on employers’ motions for preliminary injunctions to enforce restrictive covenants against former sales employees demonstrate both the close scrutiny that such covenants receive and the willingness of the courts, in appropriate circumstances, to limit their scope to protect employees. These decisions also illustrate the differing frameworks that courts may apply when analyzing whether a restrictive covenant serves a legitimate employer interest.
‘IKON Office Solutions’ Case
