Anyone familiar with the law on employment restrictive covenants knows that it is not particularly easy to predict whether any given restriction will be enforced by the courts. So, when the New York Court of Appeals weighs in on issues concerning restrictive covenants, one is well advised carefully to consider and account for the latest pronouncements of the high court. Reading these important tea leaves may not always enable planning with precision, but ignoring them is ill-advised.
This is why the Court of Appeals’ latest such decision, albeit rather brief, is an important read. In Brown & Brown v. Johnson, 25 N.Y.3d 364 (June 11, 2015) the Court of Appeals addressed two issues—(1) whether the courts in New York should enforce a choice of law provision in an employment contract that applied Florida substantive law, which differs markedly from New York law; and (2) whether to allow partial enforcement of a restrictive covenant by “blue penciling” the agreement, narrowing its scope to a permissible extent. While the court’s discussion of the choice of law issue provides a helpful refresher on New York law, the more significant ruling resuscitated the judicial power to rewrite restrictive covenants to make them enforceable even when, as written, they are impermissibly overbroad.
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