Case Name: I. Edward Brown, Inc., Appellant, v. Astor Supply Co., Inc., et al., Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1957-06-25
Citations: 4 A.D.2d 177
Docket Number: 
Parties: I. Edward Brown, Inc., Appellant, v. Astor Supply Co., Inc., et al., Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 4
Pages: 177–181

Head Matter:
I. Edward Brown, Inc., Appellant, v. Astor Supply Co., Inc., et al., Respondents.
First Department,
June 25, 1957.
Victor Brudney of counsel (Harold Oelbaum with him on the brief; Rellerstein & Rosier, attorneys), for appellant.
Louis Rivkin of counsel (Irwin Reicher with him on the brief; Rivkin & Rosen, attorneys), for Astor Supply Co., Inc., respondent.
Leo Bradspies for Isadore Cohen, respondent.

Opinion:
Per Curiam.
In 1950, plaintiff I. Edward Brown, Inc., a dealer in cleaning supplies for office buildings and institutions, engaged defendant Cohen as a [commission salesman] The employment contract, which set forth the rates and terms of his commissions, also contained a covenant not to compete. This negative covenant was [carefully limited both as to time (one year) and place (metropolitan New York, New Jersey and Connecticut) and bound £¡ohen not to solicit plaintiff's customers for another's benefit] A specific exception to the covenant was that it was not to be applicable if, after six months' employment, plaintiff discharged Cohen without cause. Built upon that exception were two additional exceptions, namely, that the covenant would apply even to a discharge without cause after six months' employment if Cohen's sales were less than $400 per month for three consecutive months, or, if plaintiff paid Cohen three months' severance pay, as defined, at termination.
After six years of mutually satisfactory employment, Cohen and plaintiff's president exchanged heated words over an apparently inequitable ruling by the employer as to Cohen's right to approach dormant accounts formerly handled by other of plaintiff's salesmen. Plaintiff's president had the last word. He told Cohen that if he did not like the ruling, inconsistent though it might be, he could leave. Cohen left.
Cohen is now employed by defendant Astor Supply Co., Inc., a competitor of plaintiff. Plaintiff seeks to enjoin Cohen and Astor from soliciting accounts formerly handled by Cohen while in plaintiff's employ, and for an accounting. The injunction sought is for the four months that remain of the one-year period since Cohen left plaintiff's employ.
Special Term dismissed the complaint on a finding that the covenant, even as limited, was against public policy. This was improper. Admittedly, the courts have been reluctant to enforce negative covenants where no special skills, trade secrets or other valuable business properties are involved (Corpin v. Wheatley, 227 App. Div. 212) and have absolutely refused to enforce them when the restraints are not limited reasonably as to time and place (Clark Paper d Mfg. Co. v. Stenacher, 236 N. Y. 312; Kaumagraph Co. v. Stampagraph Co., 197 App. Div. 66, affd. 235 N. Y. 1).
However, contracts designed to restrain for a limited time former employees from soliciting active customers of their former employer are enforcible (Interstate Tea Co. v. Alt, 271 N. Y. 76; Peekskill Coal & Fuel Co. v. Martin, 279 App. Div. 669; Monroe Coverall Service v. Bosner, 283 App. Div. 451). Hence, had Cohen voluntarily left plaintiff's employ or been discharged for cause, the injunction for one year prohibiting solicitation of former accounts would lie.
But it is clear that Cohen did not leave voluntarily. Plaintiff's inequitable treatment, coupled with the fiat that Cohen could leave if he did not like it, forced Cohen's resignation under conditions amounting to a discharge without cause. Cohen had no decent alternative but resignation; and, hence, his letter of resignation was nothing more than a commercial courtesy. This letter ought not be used to enlarge the scope of the covenant not to compete. Cohen, having really been discharged without cause after some six months' employment, the negative covenant by its own terms is not applicable unless plaintiff brings Cohen within one of the two exceptions that extend the six-months' limitation. This, plaintiff has failed to do.
The judgment should be affirmed, with costs to defendants-respondents.