Breathing new life into “uniqueness” (of an employee’s services) as a legitimate business interest supporting enforcement of non-competition covenants under New York law, the U.S. Court of Appeals for the Second Circuit affirmed the grant of a preliminary injunction barring a designer with an active social media presence from competing with her former employer. JLM Couture, Inc. v. Gutman, No. 21-870-cv (2d Cir. Jan. 25, 2022).
The Second Circuit has jurisdiction over Connecticut, New York, and Vermont.
“Uniqueness” as a protectable interest is not new. In 1999, the Second Circuit held, in Ticor Title Ins. Co. v. Cohen, 173 F.3d 63, 70 (2d Cir.), that uniqueness was a protectable interest warranting enforcement of non-compete under the facts of that case. (In the same year and just six weeks later, New York’s highest court held in BDO Seidman v. Hirshberg, 712 N.E.2d 1220, that an employee’s services were not unique, but goodwill in client relationships supported partial enforcement of restrictive covenant under the facts of that case.)
Over the past two decades, however, courts in the Second Circuit (including state and federal courts in New York) have focused mainly on confidential information, trade secrets, and customer goodwill when analyzing whether an employer has a business interest that warrants binding an employee to a non-compete.
In 2011, Haley Paige Gutman, a bridal dress designer with an active social media presence, entered into an...
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