Wise v. Transco, Inc.

Jan 24, 1980
Versions:73 A.D.2d 1039
425 N.Y.S.2d 434
1980 N.Y. App. Div. LEXIS 9997

— Order unanimously affirmed, without costs. Memorandum: We agree with Special Term that the issues pertaining to the validity of the restrictive covenant contained in paragraph 9 of the employment contract may not be summarily decided on motion. As stated in Matter of Sprinzen (Nomberg) (46 NY2d 623, 632): "Each case turns upon its own distinct facts. If the restrictive covenant is found, under all the circumstances, to be 'reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably .burdensome to the employee’, it will be subject to specific enforcement.” We are mindful of the decision in Post v Merrill Lynch, Pierce, Fenner & Smith (48 NY2d 84), holding that the "employee choice” doctrine enunciated in Kristt v Whelan (4 AD2d 195, affd 5 NY2d 807) does not apply when an employee is involuntarily discharged without cause. Post v Merrill Lynch, Pierce, Fenner & Smith (supra), however, involved forfeiture of rights under a company-funded pension plan. The court noted the "strong public policy against forfeiture of employee benefits manifested by the Employee Retirement Income Security Act * * * [and that] had the relevant provisions of ERISA been in effect at the time of termination of these appellants’ employment, its mandatory provisions might well have been dispositive in this case and have precluded the forfeiture countenanced by the court below.” (Post v Merrill Lynch, Pierce, Fenner & Smith, supra, p 88.) While plaintiff was involuntarily discharged, this restrictive covenant does not involve a forfeiture of rights under an "employee pension benefit plan” that would be covered by ERISA. We do not think, therefore, that under Post v Merrill Lynch, Pierce, Fenner & Smith (supra), the forfeiture was unreasonable as a matter of law solely because the discharge was involuntary. Special Term did not abuse its discretion in awarding attorneys’ fees in connection with its order granting summary judgment and dismissing plaintiff’s second cause of action which alleged that the Transco profit-sharing plan was not in compliance with ERISA (see US Code, tit 29, § 1132, subd [g]). (Appeals from order of Erie Supreme Court — summary judgment.) Present — Cardamone, J. P., Hancock, Jr., Schnepp, Callahan and Moule, JJ.