Reed, Roberts Associates, Inc. v. Strauman
Court of Appeals of New York
40 N.Y. 2d 202 (1976)
In 1962, John Strauman (defendant) began working at Reed, Roberts Associates, Inc. (Reed Roberts) (plaintiff). As a condition of his employment, Strauman signed a restrictive-covenant agreement containing a clause that permanently prohibited Strauman from soliciting Reed Roberts’s clients in the event of his termination. Strauman was very successful at Reed Roberts and ultimately rose to the position of senior vice president of operations. The position afforded Strauman an opportunity to help shape company policy, but obtaining new customers was not part of Strauman’s duties. Eleven years after joining Reed Roberts, Strauman left to start his own company. Reed Roberts brought a suit to enforce the restrictive covenant, claiming in part that Strauman was soliciting Reed Roberts’s customers for his business, even though the potential customers for Reed Roberts’s business were obtainable through public sources. The trial court permanently enjoined Strauman from using the information he had gained at Reed Roberts to solicit Reed Roberts’s customers. The appellate division affirmed the decision, and Strauman appealed the decision.
Rule of Law
Holding and Reasoning (Wachtler, J.)
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