Solari Industries v. Malady

264 A.2d 53 (1970)

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Solari Industries v. Malady

New Jersey Supreme Court
264 A.2d 53 (1970)

CS

Facts

In March 1969, Joseph Malady (plaintiff) entered an employment contract with Solari Industries, Inc. (Solari) (defendant), a New Jersey corporation. The contract, which stated it was governed by New York law, prohibited Malady from competing with Solari for one year following the termination of his employment for any reason, with no geographic limitation on this restraint. Several months later, after his relationship with his supervisor deteriorated, Malady agreed to the termination of his employment. In so doing, he expressly acknowledged the noncompetition provision of his employment contract and promised to adhere to it. Malady subsequently obtained the rights from another company to distribute products in the United States and Canada that competed with Solari’s products. He also contacted existing and prospective customers of Solari after being advised by his counsel that the noncompetition provision was unreasonable and void because it was not limited to a particular geographic area. Solari sued Malady, seeking injunctive relief to prevent him from violating the noncompetition provision. Solari maintained that because the employment contract was signed in New York and stated it was governed by New York law, New York law, rather than New Jersey law, was controlling. The trial court declined to issue an injunction, holding that even if the noncompetition provision was enforceable in New York, New Jersey public policy did not permit enforcement of a noncompetition provision, like the one in Malady’s employment contract, that contained no geographic limitation. The trial court said that such a provision was unreasonable and void per se. Solari appealed.

Rule of Law

Issue

Holding and Reasoning (Jacobs, J.)

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