The following numbered papers read on this petition to vacate and set aside an arbitration award pursuant to CPLR 7511 and cross-petition to confirm the arbitration award pursuant to CPLR 7510.PAPERS NUMBEREDNotice of Petition-Affidavits-Exhibits EF 1-7Notice of Cross-Petition-Affidavits-Memorandum-Exhibits EF 13-25Answering Affidavits-Exhibits EF 27-29Replying EF 31-32Stipulation EF 12 Upon the foregoing cited papers, and after conference, it is ordered that the petition to vacate an arbitration award pursuant to CPLR 7511 and 7506 and respondents’ cross-petition to confirm the arbitration award pursuant to CPLR 7510 is determined as follows:Petitioner, Yosef Colish, was an employee of ECG Resources, Inc. (“ECG”) for eleven years until he resigned on July 11, 2017. Respondents David Glaser and Gary Teigman (collectively “Respondents”), are both principals of ECG, an executive search firm specializing in the placement of wealth management professionals. Pursuant to petitioner’s employment with ECG, he entered into two non-disclosure and non-compete agreements on November 8, 2006 and December 26, 2008, respectively. Both agreements prohibit petitioner from conducting wealth management search business within a 100 mile radius of ECG’s office and/or New York City for six years.Shortly before his departure from ECG, respondents asked petitioner to execute another non-compete agreement, but this time with an additional post-employment non-solicitation clause. The parties attempted to negotiate an agreement, but ultimately submitted the matter to a Beis Din, or rabbinical tribunal (“Tribunal”), on March 22, 2018. The Tribunal concluded: (1) petitioner is barred from contacting ECG clients for a period of six years; (2) petitioner cannot conduct wealth management search business within a 100 miles radius from the ECG office and/or New York City; and (3) petitioner cannot conduct wealth management search business with any firm located within a 100 miles radius from the ECG office and/or New York City, regardless of whether the firm has ever been a client of ECG.1Petitioner now seeks to vacate the Tribunal’s award pursuant to CPLR 7511 on the grounds that: (1) the Tribunal failed to follow basic procedure when it denied him attorney representation; (2) the Tribunal did not comport with New York law in that the six year non-compete post-employment non-solicitation agreement is excessive in its time frame and geographic scope; and (3) the award violates public policy as it is unreasonable on its face.As a matter of course, “[i]t is firmly established that the public policy of New York State favors and encourages arbitration and alternative dispute resolutions” (Westinghouse Elec. Corp. v. New York City Transit Auth., 82 NY2d 47, 53 [1993] [citation omitted]). “Courts are reluctant to disturb the decisions of arbitrators lest the value of this method of resolving controversies be undermined” (Goldfinger v. Lisker, 68 NY2d 225, 230 [1986] amendment granted in part 69 NY2d 729 [1987], amendment denied 69 NY2d 1036). Courts in New York have a “minimal role…in supervising arbitration practice” (Sawtelle v. Waddell & Reed, Inc., 21 AD3d 820, 822 [2005]). They are restricted to either confirming the award, vacating the award, or “modifying] the award to correct a ministerial defect or other matter affecting the merits of the controversy” (Id.).With that said, an arbitration award may be vacated “if the court finds that the rights of [a participating] party were prejudiced by:…(iii) [the] arbitrator…so imperfectly executing] [his power;] or (iv) failure to follow the procedure of” CPLR Article 75 (CPLR 7511[b][1][iii]-[iv]). An arbitrator exceeds his or her power when: (1) the arbitrator has clearly exceeded a specifically enumerated limitation on his authority; (2) the decision is irrational; or (3) the award violates a strong public policy (see CPLR 7511 referencing, e.g., Kowaleski v. New York State Dep’t of Correctional Servs., 16 NY3d 85, 90 [2010]; Falzone v. New York Central Mut. Fire Ins. Co., 15 NY3d 530, 534 [2010]). If the award is being challenged on procedural grounds, on the other hand, then a failure to follow the procedure of Article 75 (e.g., CPLR 7506[d]) is a basis for awarding vacatur under CPLR 7511[b][1][iv] (see, e.g., Kahan v. Rosner, 26 Misc3d 615, 618 [Sup Ct, Kings County 2009] [vacating arbitration award where party was denied his choice of counsel]).CPLR 7506(d) states that “a party has the right to be represented by an attorney and may claim such right at any time as to any part of the arbitration or hearings[.] This right may not be waived.” Here, petitioner avers he was denied access to an attorney throughout the arbitration procedure. He claims that Rabbi David Cohen, who handled the dispute, told him that he could bring someone as long as respondents consented, and that respondents did not consent to his request to have a lawyer, friend, or his wife present.2Respondents thoroughly deny these allegations. In an affidavit, respondent Glaser avers that there were no conversations between the parties, or the parties and Rabbi Cohen regarding allowing attorneys at the proceeding. The parties did sign, immediately before the arbitration, a document evidencing that they were representing themselves and that they agreed to have Rabbi Cohen arbitrate the matter. Rabbi Cohen states in an affidavit that petitioner’s statements that he was denied an opportunity to have counsel present at the arbitration is inaccurate.Although Article 75 does not require attorney representation during an arbitration hearing, denying a party his choice of counsel in itself constitutes a violation of CPLR 7506(d) (see Kahan, 26 Misc3d at 619-20). “The party seeking to vacate the arbitration award has the burden of proving,” however, “by clear and convincing evidence that the arbitrator committed misconduct” (Allstate Ins. Co. v. GEICO, 100 AD3d 878, 879 [2012] [citations omitted]). Here, the parties disagree whether petitioner was denied access to counsel. Although petitioner affirms that he was denied access to counsel, he fails to submit any evidence establishing same. The only instance in the record that petitioner requested anybody, let alone an attorney, to be present at the arbitration proceedings was an email he sent respondents asking to have a friend present. Even then, there is no proof that he was denied such a request. The record does show that all parties signed a document at the beginning of the arbitration proceeding affirming they were representing themselves, but how it came to be that petitioner attended the Tribunal without representation, or a friend, cannot be discerned from the record.When a party is compelled to sign a form waiving his right to counsel, the arbitration award may be vacated pursuant to CPLR 7511 (see Sartiano v. Becker, 119 AD2d 656 [2d Dep't 1986], appeal dismissed 68 NY2d 806). But electing to appear without counsel will not invalidate an award when the right to counsel was not exercised (see NYS, Advisory Committee on Practice & Procedure. Second Preliminary Report, Legis Doc No. 13, al p. 140 (1958)]) (Cf. Sartiano v. Becker, 119 AD2d656 [1986] [concluding arbitration award was invalid under CPLR 7506(d) when party was required to sign form waiving representation]). Consequently, petitioner’s request to invalidate the arbitration award pursuant to CPLR 7506(d) is denied.Alternatively an arbitration award may be vacated pursuant to CPLR 7511(b)(1)(iii) if the arbitrator exceeded his power. Vacatur may be granted if the award: “violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator’s power” (Matter of Board of Educ. of Arlington Cent. School Dist. v. Arlington Teachers Assn., 78 NY2d 33, 37 [1991] [citations omitted]). Petitioner contends that Rabbi Cohen’s determination is irrational or violates public policy.“[U]nless there is no proof whatever to justify the award so as to render it entirely irrational…the arbitrator’s finding is not subject to judicial oversight” (Matter of Peckerman v. D&D Assoc., 165 AD2d 289, 296 [1991]; see Matter of McMahan & Co., 230 AD2d 1, 4-5 [1997], Iv denied 90 NY2d 806 [1997]). The burden of establishing that the arbitration award was irrational is a heavy one (see Cherry v. New York State Ins. Fund, 83 AD3d 446, 446 [2011]). The record is unclear as to what evidence Rabbi Cohen relied upon when making his decision. Albeit short, Rabbi Cohen’s decision does not appear to be so irrational as to warrant vacatur.As for vacatur under public policy grounds, the courts of this state follow a two-prong test when determining whether an arbitration award violates public policy. First, “where a court can conclude ‘without engaging in any extended factfinding or legal analysis’ that a law prohibit[s], in an absolute sense, [the] particular matters [to be] decided…by [arbitration], an arbitrator cannot act. Second, an arbitrator cannot issue an award where the award itself violate[s] a well-defined constitutional, statutory or common law of this State” (United Fed’n of Teachers, Local 2, AFT, AFL-CIO v. Bd. of Educ. of City Sch. Dist. of City of New York, 1 NY3d 72, 80 [2003] [internal citations omitted]).Here, there is no contention that Rabbi Cohen could act as arbitrator. So the decision hinges on whether the award itself violates a well-defined constitutional, statutory, or common law of New York. “A restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public” (BDO Seidman v. Hirshberg, 93 NY2d 382, 388-89 [1999]). Above all, when determining whether a non-compete agreement is valid, “powerful considerations of public policy” must be contemplated, “which militate against sanctioning the loss of a [person]‘s livelihood” (Karpinski v. Ingrasci, 28 NY2d 45, 49 [1971]).Firstly, courts in this state have upheld non-compete agreements with almost the same length of time applicable to the one here in question (see Karpinski v. Ingrasci, 28 NY2d 45 [1971] [forever]; Gelder Med. Grp. v. Webber, 41 NY2d 680 [1977] [five years]). But what differentiates Karpinski and Gelder from the current action is that the restriction there was limited to rural locales. Here, the restriction not only covers the United States’ largest city by population, but also all of its metropolitan area, and more.The only justification for imposing a non-compete agreement is to prevent unfair competition (see BDO Seidman v. Hirshberg, 93 NY2d 382, 391 [1999]). In examining the employer-interest prong, when a covenant not to compete is broader than required to protect the employer’s interest, it violates public policy (see Id.). In BDO, the employee signed an agreement requiring him to compensate the employer for serving any client of the firm’s Buffalo office within 18 months after termination of the employment (id. at 386). The court concluded that the employer’s legitimate interest was protection against the employee’s use of client relationships which he had acquired through employment (id. at 392). Forcing the employee to refrain from performing services with clients of the employer with whom he had not directly formed a relationship was, therefore, anti-competitively restrictive (id.). As that logic applies here, it appears to be anti-competitively restrictive to force petitioner not only to refrain from contacting any of ECG’s clients with whom he had no direct contact, but also to force him to refrain from calling any of ECG’s clients even after moving outside the 100-mile radius. Or, for that matter, forcing him to refrain from working in the wealth management professionals search business at all. ECG simply seeks to enforce a total restrain of petitioner’s power to apply his trade. Here, petitioner, at length, affirms how being submitted to the directives of the non-compete agreement will greatly affect the likelihood he could provide for his family. He affirms that for eleven years, he has derived his only source of livelihood from performing executive searches in the wealth management industry. Therefore, the award violates public policy.Any request for relief not expressly granted herein is denied.Accordingly, it is ORDERED and ADJUDGED that the petition to vacate an arbitration award is granted; and it is furtherORDERED and ADJUDGED that the cross-petition to confirm the arbitration award is denied.This constitutes the decision and judgment of the Court.Dated: May 15, 2019
