## Facts

- Ticor Title Insurance Company and Chicago Title Insurance Company employed Kenneth C. Cohen from 1981 to 1998, during which he became a senior vice president and managed several major New York accounts.
- In 1995, Cohen signed an employment agreement containing a covenant not to compete for six months after termination in the New York title insurance business.
- In April 1998, Cohen resigned and joined a competing firm, TitleServ.
- Ticor alleged Cohen solicited Ticor clients before and after leaving, targeting client relationships developed during his employment.
- Ticor sued in the Southern District of New York for breach of the non-compete and related duties and sought injunctive relief.
- The district court entered a permanent injunction enforcing the six-month restriction; Cohen appealed.

## Issues

1. Whether Cohen’s services were sufficiently “unique” or “special” under New York law to support injunctive enforcement of the non-compete.
2. Whether Ticor demonstrated irreparable harm absent an injunction.
3. Whether the six-month covenant was reasonable in duration and scope, and therefore enforceable under New York law.
4. Whether the restriction could cover transactions involving out-of-state property when the client relationships and originating work were New York-based.

## Decision

- The Second Circuit affirmed the district court’s injunction enforcing the six-month non-compete.
- The court held that Cohen’s role and long-developed client relationships in a relationship-driven market qualified as “unique” or “special” services for equitable enforcement.
- The court upheld the finding of irreparable harm based on the threatened loss of goodwill and ongoing client relationships not readily measurable in damages.
- The court found the covenant reasonable in duration and scope because it was short, targeted to Ticor’s New York market, and part of a bargained-for compensation arrangement.
- The court approved applying the restriction to out-of-state property transactions when the business originated with New York-based clients Cohen served for Ticor.

## Legal Principles

- Under New York law, a non-compete may be enforced by injunction when it is reasonable in time and scope and protects legitimate employer interests, including customer relationships developed at the employer’s expense.
- “Unique” services are assessed functionally by the employee’s relationship to the employer’s business and the employee’s ability to divert key client relationships, not by celebrity-like talent.
- Loss of goodwill and the likely diversion of repeat business can constitute irreparable harm supporting injunctive relief because the injury is difficult to quantify.
- Geographic reasonableness may be evaluated by the locus of client relationships and business origination, permitting limits tied to a New York-based client base even when insured property is located elsewhere.
- A short, negotiated restraint supported by substantial compensation is less likely to be deemed an unreasonable hardship or contrary to public policy favoring employee mobility.

## Conclusion

The Second Circuit enforced a six-month non-compete against a senior title-insurance executive, holding that his employer-developed client relationships were a protectable interest, that likely loss of goodwill constituted irreparable harm, and that the restraint’s time and market-focused scope were reasonable under New York law, including as applied to out-of-state property transactions originating from New York clients.


Ticor Title Ins. Co. v. Cohen, 173 F.3d 63 (2d Cir. 1999)