August 7th, 2013

A recent case in Supreme Court, New York County, addressed the issue of whether the services provided by the employee to be enjoined were unique such that an injunction was warranted. In OTG Management, LLC v. Konstantinidis, 967 N.Y.S.2d 823 (N.Y. Sup. Ct. 2013), a provider of food and beverage services at airports tried to prevent a former “terminal director,” Konstantinidis, from working for a competitor. 967 N.Y.S. 2d at 824. When OTG hired Konstantinidis, the company required him to promise that if he left OTG he would not work for “a competitor at any airport in the United States” for a full year after leaving. Id. Shortly after being promoted from an “Operations Manager” at LaGuardia to a “Terminal Director” at JFK, Konstantinidis left OTG and began working for a direct competitor, SSP, at a neighboring JFK terminal. Id.

OTG sued Konstantinidis and SSP to try to enforce the non-compete agreement and prevent Konstantinidis from working for SSP. The judge conducted the standard reasonableness test for non-compete agreements and focused on whether Konstantinidis’ services were “unique or extraordinary.” Konstantinidis, 967 N.Y.S.2d at 825. In determining that the non-compete clause was unenforceable, the judge explained that Konstantinidis’ services “were not unique nor is a Terminal Director considered a learned profession.” Konstantinidis, 967 N.Y.S.2d at 825. Furthermore, though OTG was concerned that in working for SSP Konstantinidis would divulge their trade secrets, the court explained that it would be unlikely that his status as a food service manager would require him to disclose or utilize the trade secrets at issue. Konstantinidis, 967 N.Y.S.2d at 825-26.

Konstantinidis reminds us that as much as businesses wish to restrict competition by departing employees, courts disfavor agreements that are unreasonable restraints on the free flow of labor. When employees do not perform a unique service or rely on specialized knowledge, and whose career success was not the product of a significant time or money investment by the original employer, a court will be very reluctant to allow the employer to prevent that employee from changing jobs.

Posted in: Recent Cases