“How did we handle this clause before?”The answer is already in the record.“How did we handlethis clause before?”The answer is alreadyin the record.

Question presented — whether the restrictive covenant in Section 11 of the executive's employment agreement can be enforced against an officer who resigned in June 2023, and whether the three-year restriction survives review under New York law.

Conclusion — the covenant is enforceable in part. The three-year term is longer than the interest it protects and puts partial enforcement at risk, but weighed against the useful life of the confidential information the executive handled and the payment made for the covenant, a two-year restriction limited to the logistics business line and to the states where the executive held customer relationships is likely to be enforced.

Reasonableness — New York enforces a covenant only so far as it is no greater than needed to protect a legitimate interest, not unduly burdensome to the employee, and not injurious to the public. The legitimate interest here is the client list and pricing model the executive built, which is protectable; the duration, the territory and the scope of restricted activity are each tested separately.

Consideration — the executive signed mid-employment and received a covenant payment equal to twelve months of base salary, paid separately from severance. Continued employment alone would likely have sufficed, but a separate payment removes the consideration argument and supports enforcing the restriction as written rather than striking it.

Scope — the agreement restricts “any business of the same or a similar kind,” which leaves the restricted activity unidentified and invites a court to decline partial enforcement as overreaching. Naming the business line the executive ran and the principal competitors in it puts the covenant on far better footing.

Handling — issue a litigation hold, and preserve the list of confidential material the executive could reach at the date of resignation together with the export-log review. If a breach is confirmed, move for a preliminary injunction and plead damages in the same action, and ask for two years rather than three, which is the range a court is most likely to grant.

Addendum (Jan 30, 2024) — the same reasoning was filed in No. 23-cv-31877 (S.D.N.Y.), where the court granted the injunction limited to two years and to New York, New Jersey and Connecticut. Section 11 of the client's standard executive employment agreement was cut to two years shortly afterward.