Wednesday, December 25, 2013

BDO Seidman v. Hirshberg case brief

BDO Seidman v. Hirshberg case brief summary
690 N.Y.S.2d 854 (1999)

Plaintiff in an employment contract dispute appealed from so much of an order of the Appellate Division of the Supreme Court in the Fourth Judicial Department (New York) as affirmed a grant of summary judgment to defendant.

Plaintiff sued to recover under a reimbursement clause that required defendant, as its former manager-level employee, to compensate it for serving any of its clients within eighteen months after the termination of his employment. Both parties moved for summary judgment; defendant's motion was granted on the theory that the clause in question was an invalid and unenforceable restrictive covenant. The appellate court affirmed. Plaintiff sought further review.


  • The court applied the standard of reasonableness. 
  • Although it determined that the clause was unenforceable insofar as it required defendant to account for the lost patronage of clients with whom he had not acquired a relationship during his employment, the court concluded that the unenforceable portion of the clause should have been severed to render the covenant partially enforceable. 
  • Severance, it found, was appropriate because the only change required was to narrow the class of clients to which the covenant applied. 
  • The court thus modified the appellate court's order and remitted plaintiff's claim for further proceedings on the issue of liquidated damages.
The court modified the appellate court's order in light of its conclusion that the restrictive covenant at issue in plaintiff's case was enforceable.

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