Summary
In Wise, the court denied a terminated employee summary judgment on the issue of whether a non-competition clause was unenforceable for the "sole" reason that he was involuntarily terminated.Id.
Summary of this case from Environmental Industrial Services Corporation v. SoudersOpinion
January 24, 1980
Appeal from the Erie Supreme Court.
Present — Cardamone, J.P., Hancock, Jr., Schnepp, Callahan and Moule, JJ.
Order unanimously affirmed, without costs. Memorandum: We agree with Special Term that the issues pertaining to the validity of the restrictive covenant contained in paragraph 9 of the employment contract may not be summarily decided on motion. As stated in Matter of Sprinzen (Nomberg) ( 46 N.Y.2d 623, 632): "Each case turns upon its own distinct facts. If the restrictive covenant is found, under all the circumstances, to be `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', it will be subject to specific enforcement." We are mindful of the decision in Post v Merrill Lynch, Pierce, Fenner Smith ( 48 N.Y.2d 84), holding that the "employee choice" doctrine enunciated in Kristt v Whelan ( 4 A.D.2d 195, affd 5 N.Y.2d 807) does not apply when an employee is involuntarily discharged without cause. Post v Merrill Lynch, Pierce, Fenner Smith (supra), however, involved forfeiture of rights under a company-funded pension plan. The court noted the "strong public policy against forfeiture of employee benefits manifested by the Employee Retirement Income Security Act * * * [and that] had the relevant provisions of ERISA been in effect at the time of termination of these appellants' employment, its mandatory provisions might well have been dispositive in this case and have precluded the forfeiture countenanced by the court below." (Post v Merrill Lynch, Pierce, Fenner Smith, supra, p 88.) While plaintiff was involuntarily discharged, this restrictive covenant does not involve a forfeiture of rights under an "employee pension benefit plan" that would be covered by ERISA. We do not think, therefore, that under Post v Merrill Lynch, Pierce, Fenner Smith (supra), the forfeiture was unreasonable as a matter of law solely because the discharge was involuntary. Special Term did not abuse its discretion in awarding attorneys' fees in connection with its order granting summary judgment and dismissing plaintiff's second cause of action which alleged that the Transco profit-sharing plan was not in compliance with ERISA (see US Code, tit 29, § 1132, subd [g]).