Novikoff and Green Successfully Block Injunction
January 25, 2018 | Kenneth A. Novikoff |In an action pending in the Nassau County Commercial Division, Ken Novikoff and Scott Green were successful in persuading the Supreme Court to vacate the TRO initially issued barring its client, Catherine Scalia, from working for TrueCar, an alleged competitor of her former employee, the multi-billion-dollar, multinational company Cox Automotive, and deny Cox’s motion for preliminary injunctive relief seeking to extend the restraint on her ability to work for TrueCar for one year.
The case presented a novel issue in New York concerning the ability of a successor corporation to enforce an otherwise lawful non-compete containing a valid assignment clause (running to the benefit of the successor corporation). Scalia resigned from her employment with Cox, who immediately sought to enforce the non-compete agreement. However, Scalia signed the non-compete while working for another company that some years later was acquired by Cox. Cox claimed that, due to the assignment clause, it could enforce the non-compete as it was transferred to them upon the acquisition. On behalf of Scalia, Novikoff and Green persuaded the Court that Scalia had in fact already complied with the terms of the one-year post-employment restrictions because the restricted period began to run at the time Scalia’s employment with the acquired company ended and not, as Cox argued, at the time of her resignation from Cox.
