New York State Remains Hospitable to Non-Compete Clauses

August 23, 2022 — On May 26, 2022, the Appellate Division, First Judicial Department of New York granted an injunction prohibiting former Vice President of Basketball Partnerships at Excel Sports Management, LLC Eric Eways from working for Klutch Sports Group, LLC.

Eways had signed a contract with Excel that featured a restrictive non-compete clause barring him from working for specifically-named competitors for eight months post-separation. The Appellate Division reversed the Supreme Court of New York, Commercial Division’s denial of Excel’s motion for a preliminary injunction, with the Supreme Court having found that Excel’s interests could be protected by more precisely tailored non-solicitation and confidentiality provisions contained in Eways’s employment agreement.

Under New York law, the standard for the enforcement of a restrictive covenant in an employment agreement remains that the covenant is necessary to protect the employer’s legitimate business interests, “(2) does not impose unique hardships on the employee, and (3) is not injurious to the public.” The Appellate Division signaled with its ruling that New York likely will continue to enforce restrictive non-complete clauses in employment agreements.

To read more about Excel Sports Management, LLC’s action against Eric Eways and Klutch Sports Group, LLC, click here.

To read the Appellate Division’s decision, click here.

To learn more about how Castaybert PLLC can help you navigate employment law as well as non-competes and other restrictive covenants, click here and here.