Employment and Labor Law

Federal Court Does Not Vacate FINRA Arbitration Award Denying ERISA Claims

Stephen P. Finkelstein v. UBS Global Asset Management (US) Inc. and UBS Securities LLC, 2011 WL 3586437 (S.D.N.Y. Aug 9, 2011)

In a case before the Southern District of  New York, Stephen P. Finkelstein (“Finkelstein”) filed a petition to vacate part of a Financial Industry Regulatory Authority (“FINRA”) Arbitration Award dated October 20, 2010, pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 10. UBS Global Asset Management (US), Inc., and UBS Securities LLC, (collectively “UBS”) filed a cross-motion to confirm the arbitration award pursuant to the FAA, 9 U.S.C. § 9.  The court denied Finkelstein’s motion to vacate and granted UBS’s motion to confirm the arbitration award in their favor.

Case Background

The underlying dispute is based on UBS’s denial of Finkelstein’s claim for a special payment under the UBS severance pay plan, which is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132.  Finkelstein began his employment with UBS in 2002.  In April 2006, he was internally transferred to a hedge fund as a portfolio manager responsible for a variety of subprime securities.  Within a year of his transfer, the hedge fund suspended his trading authority due to losses of over $300 million in his positions.  A few months later, UBS closed the hedge fund based on its overall losses; hedge fund employees were either offered new jobs or terminated.  Finkelstein was terminated without cause in August 2007.

The UBS separation program contained a provision offering a special payment to employees who were terminated on or after October 1, but before the date on which bonuses are usually paid.  As part of the closure of the hedge fund, UBS adopted a supplemental program that amended the special payment provision to provide eligible employees with a special payment at the discretion of the hedge fund’s management, even though these employees were not terminated on or after October 1.

The written eligibility requirements of the supplemental program specified dates of employment and involuntary termination; the hedge fund’s management exercised its discretion to define the formula for calculating the amount of the special payment and to exclude employees who were responsible for substantial losses at the time of the hedge fund’s closure.  Therefore, despite having satisfied the written eligibility requirements of supplemental program, Finkelstein was offered a separation package that did not include a special payment.

Finkelstein’s Claims

Pursuant to the separation program’s grievance procedures, Finkelstein submitted a claim for benefits demanding a special payment that was equivalent to 25-percent of his 2006 bonus, which was in accordance with the formula determined by the hedge fund management.  Although he acknowledged the losses on his 2007 trading book, Finkelstein attempted to explain that greater than half the losing positions were purchased by his partner without his consent and that the remainder of the losses could be recovered over time.

The severance committee denied Finkelstein’s claim, stating that the hedge fund’s management had appropriately exercised its discretion in denying him a special payment.  Finkelstein requested a review of the severance committee’s denial of his claim, and was again denied his demand for a special payment.

In December 2008, Finkelstein filed a Statement of Claim with FINRA seeking an award of the special payment.  FINRA appointed a panel of three arbitrators to hear the matter and, in October 2010, entered an award in favor of UBS without any explanation or rationale.

Finkelstein filed a petition in federal district court to vacate the arbitration award on the following three grounds: (a) the arbitration panel decision was in “manifest disregard” of ERISA, 29 U.S.C. § 1145; (b) the arbitration award was procured through the fraudulent concealment of material information by UBS; and (c) the arbitrators refused to hear evidence pertinent and material to the controversy.

Basis of Manifest Disregard

Vacating an arbitration award on the basis of manifest disregard of the law requires the challenging party to demonstrate that the arbitrators clearly defied the law either by rejecting precedent or pronouncing a decision that strains credulity.  See Stolt–Nielsen SA v. AnimalFeeds Int’l Corp., 548 F.3d 85, 92–93 (2d Cir.2008), reversed on other grounds, 130 S.Ct. 1758 (2010).

However, even if the arbitrators do not explain the reasons for their decision, the court will uphold the arbitration award “if a justifiable ground for the decision can be inferred from the record.”  Id. at 97. In his petition, Finkelstein contended that the FINRA arbitration panel manifestly disregarded ERISA, 29 U.S.C. § 1145, on four different grounds.  The most significant basis for his contention was that the arbitration panel should have rejected UBS’s unwritten, oral modification of the ERISA severance pay plan to exclude employees responsible for substantial losses from special payment eligibility.  Both the ERISA statute, 29 U.S.C § 1102(a)(1), and case law within the Second Circuit require that all amendments to employee benefit plans be in writing.

Court’s Ruling on Manifest Disregard

However, the written documents of the hedge fund supplemental program expressly conferred the hedge fund management with certain discretionary powers; therefore, the court determined that it was not erroneous for the arbitration panel to conclude that the unwritten rule excluding employees who incurred substantially losses was a permissible exercise of this discretionary authority, rather than an oral modification of the supplemental program.  Because the ERISA provision on oral modifications cited by Finkelstein was inapplicable, the arbitration panel had colorable justification to conclude that it was not violated.

Consequently, the court determined that Finkelstein failed to demonstrate manifest disregard of ERISA on these grounds. The court also found that each of the remaining challenged panel determinations was supported by a colorable justification.  Therefore, the court concluded that the arbitration award could not be vacated for manifest disregard of the ERISA statute.

Court’s Ruling on Fraud

Vacating an arbitration award on the basis of fraud under the FAA, 9 U.S.C. § 10(a)(1), requires the challenging party to produce clear and convincing evidence that there was fraud that could not have been discovered during the arbitration process and that such fraud is materially related to the award. Chimera Capital, L.P. v. Nisselson (In re MarketXT Holdings, Corp.), 428 B.R. 579, 590 (S.D.N.Y. 2010) (citing A.G. Edwards & Sons, Inc. v. McCollough. 967 F.2d 1401, 1404 (9th Cir. 1992) (per curiam).   Finkelstein alleged that UBS concealed material information relevant to the dispute.

However, the court determined that UBS could not have fraudulently concealed information that they had no obligation to disclose, and also determined that UBS did voluntarily disclose the challenged information in an accurate manner.  Therefore, the court concluded that the arbitration award could not be vacated on the basis of fraud under the FAA.

Court Ruling on Refusing to Hear Evidence

Vacating an arbitration award on the basis of refusing to hear evidence pertinent to the dispute, 9 U.S.C. § 10(a)(3), has been interpreted by courts to mean that an arbitration award will not be opened to evidentiary review except “where fundamental fairness is violated.”  Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir.1997) (quoting Bell Aerospace Co. Div. of Textron v. Local 516, 500 F.2d 921, 923 (1974)).

The arbitration panel denied Finkelstein’s request for production of evidence concerning the value of any parallel investments held by the UBS Investment Bank.  He contended this evidence was highly relevant because it would have negated UBS’s assertion that his trading activities sustained substantial losses.  It was within the arbitration panel’s broad discretion to determine that the requested materials would have been irrelevant and/or unduly burdensome for UBS to produce.

The court determined that the arbitration panel’s refusal to compel UBS to produce this evidence did not deny Finkelstein a “fundamentally fair” hearing because the scope of inquiry afforded him was sufficient to provide him with a reasonable opportunity to be heard and to enable the arbitration panel to make an informed decision.  Therefore, the court concluded that the arbitration award could not be vacated on the basis of refusing to hear evidence.

The court denied Finkelstein’s petition to vacate the FINRA arbitration award, and entered judgment to confirm the arbitration award in UBS’s favor.

Should you have any questions relating to FINRA, arbitration or employment issues, please do not hesitate to contact Attorney Joseph C. Maya in the firm’s Westport office in Fairfield County, Connecticut at 203-221-3100 or at JMaya@Mayalaw.com.

In Divorce Action, Family Business Deemed Marital Asset, Wife Entitled to One-Half Interest

In a divorce action, the Superior Court of Connecticut, Judicial District of Stamford-Norwalk at Stamford declared, as a marital asset subject to division, a business the husband formed and from which he officially retired but continued working for thereafter. The plaintiff wife and defendant husband were married for thirty-eight (38) years and resided in Stamford. The husband was the primary breadwinner and controlled finances within the marriage. Among a number of businesses and properties in which the husband held interest was one he formed in the early 1990s. This family-run business venture provided lucrative income for the husband, which supported a very comfortable lifestyle. Until the time he retired, the husband was the principal officer of the business, and on January 1, 2012, the husband retired “with the intention of turning it over to his elder daughter.” However, evidence was presented that despite his official retirement the husband remained active with the company, including check-signing power.

In its findings, the trial court did not find credible the husband’s testimony regarding his retirement from the family business, and believed he “continues to play and will continue to play a significant role in the business.” As such, the court believed it proper to consider the husband’s earning capacity while crafting alimony and child support orders. It deemed the business a marital asset, to which the wife had a fifty (50) percent interest in the net proceeds from its sale. The trial court enjoined and prohibited the husband from selling or transferring his interest in the company. If the husband attempted to do so without court approval, it would be in violation of automatic orders, and the sale or transfer would be treated as void ab initio, or from the beginning.

Whether advancing or defending a pre- or post-judgment motion regarding awards of alimony and assignment of property, a divorced individual is best served by consulting with an experienced family law practitioner. Should you have questions regarding matrimonial matters, please do not hesitate to contact Attorney Joseph C. Maya in the firm’s Westport office in Fairfield County at 203-221-3100 or at JMaya@Mayalaw.com.
________________________________________________________________________________
Our family law firm in Westport Connecticut serves clients with divorce, matrimonial, and family law issues from all over the state including the towns of: Bethel, Bridgeport, Brookfield, Danbury, Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, New Fairfield, Newton, Norwalk, Redding, Ridgefield, Shelton, Sherman, Stamford, Stratford, Trumbull, Weston, Westport, and Wilton. We have the best divorce attorneys and family attorneys in CT on staff that can help with your Connecticut divorce or New York divorce today.

If you have any questions or would like to speak to a divorce law attorney about a divorce or familial matter, please don’t hesitate to call our office at (203) 221-3100. We offer free divorce consultation as well as free consultation on all other familial matters. Divorce in CT and divorce in NYC is difficult, but education is power. Call our family law office in CT today.

Joseph Maya selected to 2022 Edition of Best Lawyers in America

FOR IMMEDIATE RELEASE

 

Westport, CT

 

Maya Murphy, P.C. is pleased to announce that Joseph Maya has been included in the 2022 edition of The Best Lawyers in America®. Since it was first published in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence.

Joseph Maya, a Connecticut and New York-based litigation attorney, was recognized in The Best Lawyers in America© 2022 edition. He has been rated Best Lawyers in America and ranks among the top private practice attorneys nationwide. Attorneys listed in this edition of The Best Lawyers in America were selected after an exhaustive peer-review survey that confidentially investigates the professional abilities and experience of each lawyer. Recognition in Best Lawyers® is widely regarded by both clients and legal professionals as a significant honor.

Mr. Maya has been practicing law in Connecticut for more than 25 years. He has been a licensed attorney in New York for more than 30 years.

“Best Lawyers was founded in 1981 with the purpose of highlighting the extraordinary accomplishments of those in the legal profession,” said Best Lawyers CEO Phillip Greer. “We are proud to continue to serve as the most reliable, unbiased source of legal referrals worldwide.”

Lawyers on The Best Lawyers in America list are divided by geographic region and practice areas. They are reviewed by their peers based on professional expertise, and undergo an authentication process to make sure they are in current practice and in good standing.

 

Maya Murphy, P.C. has offices in Westport, CT and New York City. For additional information on Joseph Maya or Maya Murphy, P.C., please visit its website at https://mayalaw.com, or call 203-221-3100.

 

What Is the Law Controlling Drug Testing in the Workplace or in Public Schools in Connecticut?

Among employees there are a variety of times in which they may legally be drug tested in the workplace.  Employees are often tested prior to being hired to prevent employers from hiring people who use illegal drugs.  After an employee is hired, if an employee’s supervisor has reasonable suspicion that the employee is under the influence of drugs or alcohol, they may test the employee for illegal drug use.  Employees in a workplace may also be tested post-accident to determine whether drugs or alcohol contributed to the event.  Lastly, employers may choose to conduct random testing to deter drug use.  However, Connecticut law prohibits private-sector employers from requiring employees to undergo random drug tests.  An employer must have a reasonable suspicion that the employee is under the influence of drugs or alcohol that is affecting, or could affect, his job performance before he may require a test.

State and municipal employees are not covered by the state law that prohibits random drug testing, however they are protected by the Fourth Amendment which prohibits the government from carrying out unreasonable searches.  The Supreme Court has ruled that urine tests are searches and that the Fourth Amendment applies to governments acting as employers.

Federal law and regulations also require the operators of commercial vehicles over a certain size, to undergo drug tests before they are hired, after serious incidents, and when there is a reasonable suspicion.   In the private sector, pre-employment drug testing is fairly common.

There are no federal or state statutes that cover drug testing of students in public schools.  Students do not have the same level of constitutional rights as adults however.  A 2002 Supreme Court decisions permits schools to conduct random drug testing of students who participate in extracurricular activities, but drug testing cannot be a condition for attending school.

If you have any questions regarding employment law in Connecticut, please contact Joseph C. Maya, Esq. at (203) 221-3100 or e-mail him directly at JMaya@Mayalaw.com.

Hurdles Employees Must Jump in Filing a Claim for Unlawful Discrimination

Here in Connecticut and across the nation, employees from all walks of life routinely face unlawful discriminatory practices and treatment in the workplace. Depending on the nature of the claim, he or she may file civil lawsuits under Title VII (which prohibits employment discrimination on the basis of race, color, religion, sex, and national origin) or the Connecticut Fair Employment Practices Act (CFEPA).

However, employees need to keep in mind that before they seek recourse with the courts, they must first exhaust all of their administrative remedies. “The exhaustion requirement exists to afford the administrative agency the opportunity to investigate, mediate, and take remedial action.”[1] Failure to do so will result in dismissal of the case (see, for example, this previously-discussed case).

Furthermore, employees must pay attention to statutory time restrictions for filing administrative charges under Title VII and CFEPA:

To sustain a claim for unlawful discrimination under Title VII in a deferral state such as Connecticut, a plaintiff must file administrative charges with the EEOC [Equal Employment Opportunities Commission] within 300 days of the alleged discriminatory acts.[2] … CFEPA requires that a complainant file the administrative charge with the CCHRO [Connecticut Commission on Human Rights and Opportunities] within 180 days of the alleged discriminatory act.[3]

Courts are particularly cognizant of these requirements and endorse “strict adherence… [as] the best guarantee of the evenhanded administration of the law.”[4] As a result, the time bar will begin running for each individual adverse employment action against the employee on the date it occurred. Failure to timely file a claim may prevent it from being reviewed by the EEOC or CCHRO.

However, employees often endure discriminatory practices over a prolonged period of time, so even if alleged conduct falls outside of the charging period, it may be reviewable. An important exception to strict adherence is the continuing violation exception, which involves incidents occurring both within and outside the time bar. A continuing violation occurs “where there is proof of specific ongoing discriminatory policies or practices, or where specific and related instances of discrimination are permitted by the employer to continue unremedied for so long as to amount to a discriminatory policy or practice.”[5]

As an employee, it is imperative that you understand Connecticut’s statutory scheme surrounding hiring, evaluation, and termination processes, as well as the requirements for filing a lawsuit under State and federal anti-discrimination law. The attorneys at Maya Murphy, P.C., assist clients in Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, and Westport. If you have any questions regarding any employment law matter, please do not hesitate to contact Attorney Joseph C. Maya. He may be reached at Maya Murphy, P.C., 266 Post Road East, Westport, Connecticut (located in Fairfield County), by telephone at (203) 221-3100, or by email at JMaya@mayalaw.com.


[1] Stewart v. United States Immigration and Naturalization Service, 762 F.2d 193, 198 (2d. Cir. 1985).

[2] Flaherty v. Metromail Corp., 235 F.3d 133, 136 n.1 (2d Cir. 2000).

[3] Connecticut General Statutes § 46a-82e.

[4] Mohasco Corp. v. Silver, 447 U.S. 807, 826 (1980).

[5] Cornwell v. Robinson, 23 F.3d 694, 704 (2d Cir. 1994).

NEW LAWS IMPACTING CONNECTICUT EMPLOYERS – WHAT YOU NEED TO KNOW

SEPTEMBER 20 @ 1:00 PM – 2:30 PM

Lauren A. Jacobson, Esq. and Robert G. Brody, Esq. will be presenting “New Laws Impacting Connecticut Employers – What you Need to Know” for the Fairfield County Bar Association.

About the Program 

The Connecticut General Assembly recently enacted a number of significant employment laws at the end of its recent regular and special sessions that will dramatically affect our state. This program will highlight the most prominent legislation passed, and provide important updates on what employers need to know. Topics will include, among others:

  • Mandatory Salary Range Disclosure for Applicants and Employees
  • New Sex Wage Discrimination Standard: Moving from “Equal” to “Comparable” Work
  • Covid Recall-by-Seniority Law for Certain Employees Laid Off in the Hotel, Food Service and Building Service Industries
  • New Workplace Rules for Regulating Recreational Marijuana
  • New Breastfeeding Guidelines
  • The CROWN ACT- “Creating A Respectful And Open World For Natural Hair” – Protection Again Discrimination Based on Race-Based Hair Styles

Click here to register. 

Secretary Sues Board of Ed for Racial Discrimination

A Bronx school employee is suing the Board of Education for $100 million for employment discrimination – saying she was denied a transfer, even though officials knew she was being harassed by her boss. Continue Reading

Dennis Coleman’s Bad Behavior Costs Board of ED $100G

The city’s Board of Education settled a discrimination and retaliation lawsuit brought by a former Bronx School Board employee last week for $100,000. Continue Reading

Connecticut Non-Compete Prohibits Client Solicitation in Investment Services Industry

In Robert J. Reby & Co. v. Byrne, 2006 Conn. Super. LEXIS 2115, Mr. Patrick Byrne worked at Robert J. Reby & Co., a financial firm in Danbury, Connecticut, as a registered investment advisor from June 2005 to July 2005.  The company advises high net worth individuals and families in the areas of trusts, wealth management, and taxation.  Mr. Byrne signed an employment contract with Robert J. Reby & Co. wherein it contained a non-compete agreement that stipulated he be prohibited from soliciting the company’s clients or disclosing any of its confidential information in the event of his termination.  Following Mr. Byrne’s short employment with Robert J. Reby & Co. he began to work at Aspetuck Financial Management, LLC, a wealth management firm based in Westport.   Robert J. Reby & Co. alleged that Mr. Byrne solicited its clients for his new firm, Aspetuck, in direct violation of the non-compete agreement.  Mr. Byrne countered that the provisions of the non-compete were unreasonable in the sense that it placed an excessive restraint on his trade and prevented him from pursuing his occupation.

The court held that the non-compete agreement between Mr. Byrne and Robert J. Reby & Co. contained reasonable terms and was enforceable.  It failed to see any merits in Mr. Byrne’s claim that the agreement was too broad and created an insurmountable occupational hardship.  The provisions of the agreement only restricted a very small segment of Mr. Byrne’s occupational activities.  The terms he agreed to only prevented him from soliciting the specific and limited group of people that were clients of Robert J. Reby & Co..  The court held that the covenant was not a pure anti-competitive clause because it did not prevent him from engaging in the investment services industry as a whole.  This limited scope with regard to the prohibition levied upon Mr. Byrne caused the agreement to be reasonable and therefore enforceable.

The court also took time to discuss the public policy behind finding the non-compete agreement enforceable and establishing the legitimacy of the agreement.  Companies, according to the court, have a legitimate interest in protecting their business operations by preventing former employees from exploiting or appropriating the goodwill of its clients that it developed at its own, and not the employees’, expense.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment contract, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

Keywords: anti-compete, excessive restraint, financial form, goodwill, investment adviser, investment service industry, legitimacy, new firm, occupational hardship, prohibition, pursuing occupation,  former employer, previous employer, job responsibilities, binding, classified information, commercial operations, competing, compete, directly, employer’s interest, indirectly, internet-based, protect, reasonable, restricting disclosures, restricting disclosures, similar products, burden of proof, direct competitor, disclosure of trade secrets, employment contract, enforceability, geographic limitations, headquarters, improper competition, injunction, management responsibilities, non-compete covenant, radius, sales representative, time limitations, unreasonable provisions, attorney, attorneys, employment attorneys, bonus, bonuses, companies, company, connecticut, customary practices, Darien, departing employees, directors, employee, employer, employment law, employment at-will, at-will, legal counsel, executives, New York, Fairfield, Fairfield County, Norwalk, Westport, Weston, Easton, Bridgeport, Stamford, Stratford, severance package, Greenwich, harassment, discrimination, hiring, human resources, job offers, lawyer, lawyers, leaving company, leverage, Maya Murphy, negotiated, negotiating severance packages, negotiation, New Canaan, non-compete, non-competition, non-disparagement, non-solicitation, offer, offer agreement, offer letter, P.C., payroll, position, represent, representation, salary, salaries,  senior management, manager, separation agreement, severance agreements, severance letters, severance package, termination, vacation, vesting, vesting of stock options, law firm, public interest, monopoly, start own business, voluntary, voluntarily left, mediation, burdensome, excessive, geographical, occupation, practice, territorial, violation, restrictive, proprietary knowledge, scope, narrow, broad,

Court Uses Connecticut Law to Supersede Massachusetts Law in Application of Non-Compete Agreement

In Custard Insurance Adjusters v. Nardi, 2000 Conn. Super. LEXIS 1003, Mr. Robert Nardi worked at Allied Adjustment Services’ Orange, CT office beginning in September 1982 as the vice president of marketing, overseeing the adjustment of claims for insurance companies and self-insurers.  The company had Mr. Nardi sign non-compete and confidentiality agreements as a term of his employment.  The agreements established that he could not solicit or accept claims within a fifty-mile radius of Allied’s Orange office for a period of two years following his termination.  The agreements further specified that the names and contact information of Allied’s clients were the company’s confidential property.  The choice of law provision stated that Massachusetts law would be controlling (Allied had its headquarters in Massachusetts).  On September 1, 1997, Allied sold its business and all its assets, including its non-compete agreements, to Custard Insurance Adjusters.  Mr. Nardi became increasingly worried about future employment at Custard when the company restructured its compensation format, allegedly decreasing his annual income by 25%.  At this point, Mr. Nardi began to inquire about employment at other companies and in particular contacted Mr. John Markle, the president of Mark Adjustment, with whom he had a previous professional history.  He also arranged meetings between Mr. Markle and four other current Custard employees to discuss switching companies.  While the companies are competitors in the insurance industry, Mark’s business was restricted to the New England region while Custard operated nationally.  Custard terminated Mr. Nardi and asked the court to enforce the non-compete agreement.

The court first sought to tackle the issue of the choice of law provision since it designated Massachusetts law as controlling but this lawsuit was brought in Connecticut state court.  The court asserted its authority over the issue and case because it could not ascertain any “difference between the courts of Connecticut and Massachusetts in their interpretation of the common law tort breach of fiduciary obligation brought against a former officer of a corporation”.  The court emphasized that above all else, the legal issue at hand was that of contractual obligations and a company’s business operations.  It asserted its authority in this respect by stating it believed “that the Massachusetts courts interpret the tort of tortious interference with contractual and business relationships the same way our [Connecticut’s] courts do”.  Additionally, the court cited that the application of Massachusetts law would undermine Connecticut’s policy to afford legal effect to the Connecticut Unfair Trade Practices Act (CUTPA) and Connecticut Uniform Trade Secrets Act (CUTSA), two-state statutes used by Custard to sue Mr. Nardi.

Next, the court addressed the enforceability of the non-compete agreement signed by Mr. Nardi and Allied.  Mr. Nardi contended that the provisions of the agreement were only binding upon the signatory parties (himself and Allied) and that Custard lacked the authority to enforce its provisions.  He asked the court to deny Custard’s request to enforce the non-compete because it was “based on trust and confidence” between the signatory parties and “was thus not assignable”.  The court rejected this train of thought because the non-compete explicitly contained an assignability clause and it held that the non-compete covenant was properly and legally transferred to Custard under Massachusetts law.

Mr. Nardi based a substantial portion of his defense on the claim that Custard violated, and therefore invalidated, the agreement when it modified his compensation format.  He alleged that he was the victim of unjustified reductions in his professional responsibilities and compensation following Custard’s acquisition of Allied in 1997.  Mr. Nardi however was still an executive at the new company despite a reduction in rank and he himself had expressed excitement about becoming an executive at a national, instead of a regional, company.

The court ultimately found the non-compete to be valid and enforceable, therefore granting Custard’s request for injunctive relief.  It assessed the facts of the case and Mr. Nardi’s current position to amend the time restriction of the agreement, however.  Taking into account that he was starting a family and had a young child in conjunction with estimates that the full restrictions could amount to a 60-70% loss of business for Mr. Nardi, the court reduced the time limitation from two years to six months.  The court concluded that while the provisions were reasonable at face value, they could have unforeseen consequences that would have severely impaired Mr. Nardi’s ability to make a living in order to provide for his family.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.