“FOREFEITURE-FOR-COMPETITION” PROVISION WAS ENFORCEABLE
Because his former employer took that the position he had forfeited his “Equity Units” by joining a competing company (and becoming its CEO and President) some four months after his termination, a lawsuit was filed by JX with the New York County Supreme Court.
Since the judge found in his former employer’s favor, JX appealed. And on its review, the Appellate Division, First Department, noted that the “forfeiture-for-competition” provision didn;t constitute a “restraint of trade.” Particularly since the agreement wasn’t “ambiguous, unconscionable, or otherwise unenforceable,” the AD1 thought the agreement was valid and binding and not violative of any “public policy” considerations.
Given that backdrop, the outcome was unanimously affirmed.
Now how anti-competitive was that?
# # #
DECISION