## Facts

- Reed, Roberts Associates, Inc. provided employer consulting services on state unemployment laws and operated nationally.
- John J. Strauman joined Reed, Roberts in 1962, rose to senior vice president in charge of operations, and was not responsible for sales or obtaining new customers.
- As a condition of employment, Strauman signed a restrictive covenant that (a) barred him from soliciting the company’s clients and (b) for three years after termination barred him from engaging in a similar business within New York City and Nassau, Suffolk, and Westchester Counties.
- After about eleven years, Strauman left and formed Curator Associates, Inc., a competing business in the same field and locality.
- Reed, Roberts alleged that Strauman and Curator were soliciting Reed, Roberts’ clients and sought injunctive relief to enforce the restrictions.

## Issues

1. Whether a post-employment noncompete restricting competition for three years within a defined geographic area is subject to specific enforcement.
2. Whether a covenant permanently prohibiting a former employee from directly or indirectly soliciting the employer’s clients is enforceable in equity absent trade secrets or unique services.

## Decision

- The trial court declined to enjoin defendants from competing, finding no unique or extraordinary services and no protectable trade secrets, but permanently enjoined solicitation of plaintiff’s clients.
- The Appellate Division affirmed without opinion.
- The Court of Appeals modified by reversing the permanent injunction against solicitation and otherwise left defendants free to compete.
- The court held the restrictive covenant was not a proper subject for specific enforcement because the employer showed neither misappropriation of trade secrets/confidential information nor unique or extraordinary services.

## Legal Principles

- Post-employment restrictive covenants are enforceable only if reasonable in time and area, necessary to protect legitimate employer interests, not harmful to the public, and not unreasonably burdensome to the employee.
- In the employment context, an employer’s legitimate interests sufficient for specific enforcement are limited to: (a) preventing disclosure or use of trade secrets or confidential information, or (b) protecting an employee’s unique or extraordinary services.
- An employer has no protectable interest in merely preventing ordinary competition by a former employee.
- Customer identities and contact information that are readily ascertainable from public or nonconfidential sources generally do not qualify as trade secrets; absent proof of misappropriation, injunctive relief is not warranted.
- High rank, specialized experience, and familiarity with the business do not, without more, render an employee’s services “unique or extraordinary.”
- Overbroad restraints—such as a multi-year, multi-county noncompete untethered to protectable interests and a perpetual nonsolicitation provision—are disfavored in equity.

## Conclusion

The Court of Appeals refused to specifically enforce broad noncompete and permanent nonsolicitation restraints where the employer proved neither trade-secret misuse nor unique services, limiting equitable enforcement of employment covenants to protection against unfair competition rooted in legally protectable confidential information or truly exceptional employee services.


Reed, Roberts Assocs., Inc. v. Strauman, 40 N.Y.2d 303 (N.Y. 1976)