## Facts

- EarthWeb, an internet company serving information-technology professionals, employed Mark Schlack as Vice President, Worldwide Content, with overall editorial responsibility for website content.
- Schlack’s employment agreement included confidentiality obligations and a 12-month post-employment noncompete barring work for a “direct competitor” as defined in the contract.
- Schlack resigned after about one year to accept employment with ITworld.com, a subsidiary of IDG, which was developing an IT-focused website.
- EarthWeb sued for breach of the restrictive covenant and confidentiality provisions and for misappropriation of trade secrets, seeking to block Schlack from starting at ITworld.com and from using or disclosing confidential information.
- A temporary restraining order issued initially, with EarthWeb agreeing to continue paying Schlack’s salary and benefits during the TRO; after expedited discovery and argument, the court addressed the request for a preliminary injunction.

## Issues

1. Whether EarthWeb showed irreparable harm and a likelihood of success (or serious questions plus favorable hardships) warranting a preliminary injunction.
2. Whether the 12-month noncompete was enforceable under New York law as a reasonable restraint necessary to protect EarthWeb’s legitimate interests.
3. Whether an injunction was justified on a trade-secret theory, including “inevitable disclosure,” based on the risk Schlack would use or disclose confidential information at ITworld.com.

## Decision

- The court denied EarthWeb’s motion for a preliminary injunction.
- The court held the one-year noncompete unenforceable as unreasonable in duration and scope in the circumstances of the internet-content business.
- The court declined to enjoin Schlack based on trade-secret misappropriation or “inevitable disclosure,” finding an insufficient showing that disclosure or use was likely.
- The existing TRO was dissolved, and Schlack was not barred from commencing employment with ITworld.com (while remaining subject to any valid confidentiality obligations).

## Legal Principles

- A preliminary injunction requires a showing of irreparable harm and either (a) likelihood of success on the merits or (b) sufficiently serious questions plus a balance of hardships tipping decidedly toward the movant.
- Under New York law, a post-employment restrictive covenant is enforceable only if reasonable and necessary to protect legitimate employer interests, not unduly harsh to the employee, and not harmful to the public.
- Reasonableness of a noncompete depends on the specific context, including the industry’s characteristics and the restriction’s duration and scope.
- Courts are reluctant to use “inevitable disclosure” as a substitute for an overbroad noncompete; injunctive relief requires a concrete, non-speculative risk of trade secret use or disclosure, especially where the employee’s access to core secrets is limited and information may become quickly outdated.

## Conclusion

The court refused to restrain a former executive from joining a competitor where a broadly defined, one-year noncompete was disproportionate to the employer’s protectable interests in a fast-changing internet market, and where the evidence did not show a concrete likelihood that the employee would misappropriate or inevitably disclose trade secrets.


EarthWeb, Inc. v. Schlack, 71 F. Supp. 2d 299 (S.D.N.Y. 1999)