## Facts

- Estée Lauder, headquartered in New York, employed Shashi Batra as a senior executive with worldwide responsibility for the Rodan + Fields brand and North American responsibility for Darphin.
- At hiring, Batra signed a confidentiality, non-solicitation, and non-competition agreement with a 12-month post-employment restriction tied to roles where he could use or disclose confidential information to benefit a competitor or harm Estée Lauder.
- The agreement included a New York choice-of-law clause and required Estée Lauder to pay Batra his full salary during the non-compete period.
- Batra resigned on March 13, 2006 and soon began working for Perricone, a direct competitor in cosmetic dermatology.
- Batra filed an action in California state court seeking a declaration that the non-compete was unenforceable under California policy against employee non-competes.
- Estée Lauder filed suit in federal court in New York seeking to enforce the agreement and moved for a temporary restraining order and preliminary injunction; Batra sought abstention or a stay based on the parallel California case.

## Issues

1. Whether the court should abstain or stay the federal action under the Colorado River doctrine due to the parallel California proceeding.
2. Whether New York or California law governed enforceability of the restrictive covenants in light of the New York choice-of-law clause and California’s statutory policy against non-competes.
3. Whether Estée Lauder satisfied preliminary-injunction requirements (irreparable harm and likelihood of success or serious questions plus equities) to enforce the non-compete and related covenants.
4. Whether the scope (including potential worldwide effect) and duration of the non-compete were reasonable and enforceable, including whether modification was appropriate.

## Decision

- The court denied Batra’s motion for abstention or a stay under Colorado River.
- The court applied New York law pursuant to the agreement’s choice-of-law clause.
- The court granted a preliminary injunction enforcing the restrictive covenants, but reduced the non-compete term from 12 months to 5 months.
- The court enforced the confidentiality and non-solicitation provisions and restrained Batra from soliciting Estée Lauder employees.

## Legal Principles

- Colorado River abstention applies only in exceptional circumstances; parallel state litigation alone does not justify declining federal jurisdiction.
- New York generally enforces contractual choice-of-law clauses when the chosen state has a substantial relationship to the parties or transaction and enforcement is consistent with New York choice-of-law rules.
- A preliminary injunction requires irreparable harm and either likelihood of success on the merits or serious questions going to the merits with equities favoring the movant.
- Under New York law, restrictive covenants are enforceable to protect legitimate interests such as trade secrets and confidential business information, if reasonable in scope and duration.
- Courts applying New York law may partially enforce or modify an overbroad restrictive covenant to render it reasonable, rather than invalidate it entirely.
- Continued salary payments during the restricted period can reduce employee hardship in equitable balancing for injunctive relief.

## Conclusion

The court exercised jurisdiction despite a parallel California declaratory action, enforced the parties’ New York choice-of-law clause, and issued a preliminary injunction to protect Estée Lauder’s confidential strategic information by enforcing the non-compete (as shortened to five months) and the confidentiality and non-solicitation restraints.


Estée Lauder Cos., Inc. v. Batra, 430 F. Supp. 2d 158 (S.D.N.Y. 2006)