SUTHERLAND GLOBAL SERVICES INC PLAINTIFF RESPONDENT v. THOMAS STUEWE DEFENDANT APPELLANT (2010)

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is denied and the preliminary injunction is vacated.

Memorandum:  Plaintiff commenced this action seeking to enforce the restrictive covenants contained in a “Non-Competition and Non-Solicitation Agreement” (Agreement) that defendant signed while he was employed by plaintiff.   Defendant appeals from an order granting the motion of plaintiff seeking a preliminary injunction enjoining defendant from, inter alia, accepting employment from plaintiff's alleged competitors.

We agree with defendant that Supreme Court abused its discretion in issuing the preliminary injunction.  “Preliminary injunctive relief is a drastic remedy [that] is not routinely granted” (Marietta Corp. v. Fairhurst, 301 A.D.2d 734, 736;  see Peterson v. Corbin, 275 A.D.2d 35, 37, appeal dismissed 95 N.Y.2d 919;  Cool Insuring Agency v. Rogers, 125 A.D.2d 758, 759, appeal dismissed 69 N.Y.2d 1037).  “In order to establish its entitlement to a preliminary injunction, the party seeking the injunction must establish, by clear and convincing evidence ․, three separate elements [, including,] ․ ‘ ․ a likelihood of ultimate success on the merits' “ (Destiny USA Holdings, LLC v Citigroup Global Mkts. Realty Corp., 69 AD3d 212, 216, quoting Doe v. Axelrod, 73 N.Y.2d 748, 750;  see Aetna Ins. Co. v. Capasso, 75 N.Y.2d 860, 862;  J.A. Preston Corp. v. Fabrication Enters., 68 N.Y.2d 397, 406).

Here, we agree with defendant that plaintiff failed to demonstrate by clear and convincing evidence that the Agreement was enforceable and thus that there was a likelihood of success on the merits.  “While restrictive covenants tending to prevent an employee from pursuing a similar vocation after termination of employment are, as a general rule, disfavored by the courts, they will be enforced if they are[, inter alia,] ․ necessary to protect the employer's legitimate interests” (Asness v. Nelson, 273 A.D.2d 165;  see BDO Seidman v. Hirshberg, 93 N.Y.2d 382, 388-389;  Columbia Ribbon & Carbon Mfg. Co. v A-1-A Corp., 42 N.Y.2d 496, 499).   We agree with defendant that plaintiff failed to demonstrate the need for an injunction to protect its legitimate interests, which are “limited to the protection of [its] trade secrets or confidential customer lists, or protection from an employee whose services are unique or extraordinary” (Riedman Corp. v. Gallager, 48 AD3d 1188, 1189;  see BDO Seidman, 93 N.Y.2d at 389;  Reed, Roberts Assoc. v. Strauman, 40 N.Y.2d 303, 308, rearg. denied 40 N.Y.2d 918).   We therefore reverse the order, deny the motion and vacate the preliminary injunction.

Patricia L. Morgan

Clerk of the Court