## Facts

- Sybron Corporation operated a New York facility through its Pfaudler division manufacturing and relining glass-lined chemical processing vessels.
- Alfred J. Wetzel worked for Sybron at the New York plant for 34 years in a technical role and allegedly had access to confidential manufacturing and relining information.
- De Dietrich, a nondomiciliary competitor operating a New Jersey facility, recruited Wetzel after he left Sybron to supervise its New Jersey operations.
- Sybron alleged De Dietrich hired Wetzel as part of a plan to obtain and use Sybron’s trade secrets to compete in the same specialized market.
- Sybron alleged De Dietrich had solicited a major New York customer, creating a threat of significant competitive injury in New York if trade secrets were used.
- Sybron sought to enjoin De Dietrich from employing Wetzel and to prevent Wetzel from disclosing or using Sybron’s alleged trade secrets.

## Issues

1. Whether New York courts may exercise long-arm jurisdiction under CPLR 302(a)(3)(ii) over a nondomiciliary competitor whose out-of-state conduct allegedly threatens economic injury in New York through trade-secret misappropriation and competition for New York customers.
2. Whether dismissal of the complaint as to Wetzel was improper where the complaint had not yet been served and factual disputes remained regarding trade secrets and threatened disclosure/use.
3. Whether the Court of Appeals could review the Appellate Division’s reversal of a preliminary injunction.

## Decision

- The Court of Appeals held that CPLR 302(a)(3)(ii) permitted long-arm jurisdiction over De Dietrich based on the threatened injury in New York from alleged trade-secret misuse to obtain sales from Sybron’s New York customers.
- The Court reversed the dismissal of the action as to Wetzel as premature and reinstated the action against him.
- The Court reinstated the action against De Dietrich (rejecting the Appellate Division’s jurisdictional dismissal).
- The Court affirmed the Appellate Division’s reversal of the preliminary injunction, stating it lacked power to review that interlocutory determination.
- The Appellate Division order was therefore affirmed in part and reversed in part.

## Legal Principles

- Under CPLR 302(a)(3)(ii), a nondomiciliary’s out-of-state tortious conduct may support New York jurisdiction when it causes, or credibly threatens, injury within New York, including economic injury to a New York plaintiff tied to competition for New York customers.
- For trade-secret-based claims, threatened loss of significant New York business can satisfy the “injury in New York” requirement; the court did not decide whether loss of a minor New York account alone would suffice.
- Whether a former employee’s new role will necessarily require disclosure or use of alleged trade secrets presents fact questions that generally should not be resolved through early dismissal on a limited record.
- Dismissal is improper where the action has not been served and the record does not permit resolution of disputed facts central to trade-secret protection and threatened misuse.
- The Court of Appeals may lack authority to review certain Appellate Division determinations concerning preliminary injunctive relief, even while resolving jurisdictional and dismissal questions.

## Conclusion

New York could exercise long-arm jurisdiction over an out-of-state competitor alleged to have recruited a former New York employee to misappropriate trade secrets and capture significant New York customers, and the complaint against the former employee could not be dismissed before service and factual development; however, the denial of preliminary injunctive relief remained undisturbed because it was not reviewable.


Sybron Corp. v. Wetzel, 46 N.Y.2d 197, 413 N.Y.S.2d 127, 385 N.E.2d 1055 (N.Y. 1978)