Court Opinion

ID: 5793011
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:13:04.4058+00
Date Added: 2024-06-11T08:42:20.109338
License: Public Domain

Nunez, J. P. (dissenting).
I would reverse and stay arbitration. The December 3, 1971 and March 6, 1972 contracts suffer from two infirmities. First, they are invalid for want of mutuality of obligation. (See Matter of Kaye Knitting Mills v. Prime Yarn Co., 37 A D 2d 951 [1st Dept., 1971] and Matter of Tunis Mfg. Corp. v. Mystic Mills, 40 A D 2d 664 [1st Dept., 1972].) The provision in these two agreements, pursuant to which respondents sought to institute arbitration proceedings, is not a contract for arbitration, but rather a grant to respondents of a unilateral right to arbitrate. Neither party is required to arbitrate; respondents, because the agreement gives them the option to arbitrate or to litigate; petitioner, because the clause is not mutually binding and enforceable. Second, these two agreements were expressly superseded by the January 1, 1973 agreement. Subdivision (d) of paragraph 6 thereof provides: “ This agreement shall supersede all prior agreements and understandings between the parties respecting the subject matter hereof.” I would, therefore, grant a permanent stay of arbitration as to the aforesaid two agreements.
With respect to the agreement of January 1, 1973, I would remand for the purpose of determining, upon an evidentiary hearing, whether the restrictions therein set forth exceed the degree of protection to which the respondents are entitled in order to preserve their legitimate interests. The restrictive covenant is broadly drawn. Three affiliated companies are involved. Whereas the petitioner was hired to solicit customers in the New York and New Jersey areas only, the .proscribed territory includes Washington, D. C., New York, New Jersey, Pennsylvania, Maryland and Virginia. The contract is terminable at will. The petition alleges that respondents and their affiliates conducted a business with annual volume approximating $10,000,000 and that at the time of the execution of the agreement petitioner earned $350 per week as their employee. The record clearly puts in issue the reasonableness of the restraint and whether the agreement unreasonably prevents the petitioner, respondents’ former employee, from pursuing his occu*199pation without harm to respondents. “ Whether a contract or any clause of the contract is unconscionable is a matter for the court to decide against the background of the contract’s commercial setting, purpose, and effect ” (Wilson Trading Corp. v. David Ferguson, Ltd., 23 N Y 2d 398, 403). In seeking to stay arbitration petitioner further alleges that the employment agreements exacted from him are in restraint of trade and violate the provisions of the antitrust laws. (See IT. S. Code, tit. 15, § 13 and New York General Business Law, § 340, subd. 1 [Donnelly Act].) New York’s antitrust law protecting free competition represents a public policy of the first magnitude and its enforcement should not be left within the purview of arbitration. (See Matter of Aimcee Wholesale Corp. [Tomar Prods.], 21 N Y 2d 621; Paramount Pad Co. v. Baumrind, 4 N Y 2d 393.)