Posts tagged with "#MayaMurphy"

Can My Spouse Take Everything in the Divorce?

The short answer is simple: no. Contrary to what you may hear, or what you may think, your spouse cannot take everything you own in a divorce. As a whole, our society throws around phrases like “she took him to the cleaners,” or “she bled him dry,” but those statements are far from the truth. In reality, Connecticut courts follow equitable distribution laws when dividing marital property upon divorce. The statute states:

“At the time of entering a decree annulling or dissolving a marriage or for legal separation pursuant to a complaint under section 46b-45, the Superior Court may assign to either the husband or wife all or any part of the estate of the other.” CONN. GEN. STAT § 46b-81(a)

Property Classification

But no court awards all of one spouse’s property to another because the court must follow certain factors and considerations when deciding who gets what. Before such factors are even considered, the couple’s property is first classified to determine which property is even eligible for division. Such classification involves the court determining whether the asset was earned prior to or subsequent to the date of marriage to determine whether the asset is marital property. To simplify, usually property owned before marriage is not subject to division but anything acquired during the marriage is.

Once the property is classified, then the court will apply a bunch of equitable factors to determine who gets what property. For instance, in Connecticut, equitable distribution of property “should take into consideration the plaintiff’s contributions to the marriage, including homemaking activities and primary care taking responsibilities. . . and that a determination of each spouses’ contribution includes non-monetary as well as monetary contributions.” O’Neill v. O’Neill, 13 Conn. App. 311.

Factors to Consider in Property Division

Such factors are also considered alongside the length of the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. C.G.S.A. 46b-81 (c).

These steps the court must take before dividing property upon divorce ensures no one gets “hosed” or “cleaned out” upon divorce. While one spouse may end up feeling one of those ways, the actual distribution is never the ultimate reason why.

If you or someone you know is preparing for a divorce, or needs representation for divorce, feel free to call one of the experienced divorce attorneys at Maya Murphy, PC today. Our attorneys have decades of experience with divorce and family issues in both Connecticut and New York including child custody disputes, high asset divorce, alimony modifications and divorce mediation. Feel free to call 203-221-3100 or email JMaya@mayalaw.com to schedule a consultation today.

Protecting Your Interests in a High-Asset Divorce

Whether or not you consider yourself a high earner or a high worth individual, if you have considerable assets at stake and divorce is knocking at the door, we are here to help. At Maya Murphy, we deal with divorces every day, whether they include athletes, businesses, famous individuals, those with large amounts of wealth or just the average person. Our divorce practice has been established for over a decade and is built on experience gained in both New York and Connecticut tribunals.

We can help you take proactive steps to position yourself for a fair allocation. Not every high-asset divorce is destined for trial. We will explore mediation to resolve or narrow the issues and out-of-court negotiations for everything from IRA, 401(k) and pension savings and alimony to child custody and child support. However, if needed, the high asset divorce attorneys of Maya Murphy are proven litigators who are ready and able to bring a case to trial.

Factors in Settling a High Asset Divorce

When it comes to high asset divorce, there are many more factors that must be considered when reaching an appropriate settlement. Here at Maya Murphy, we are familiar with every nuance of high net worth divorces, including:

  • Valuation of a business or professional license
  • Valuation and sale/refinancing of the marital home
  • Other real estate (vacation homes, rental property)
  • Valuation and division of investment property
  • Variable or seasonal income, as from pro athletes
  • Verification of income from all sources
  • Stock options and deferred compensation
  • The marital portion of IRA, 401(k) and pension savings
  • Validity (enforceability) of prenuptial agreements
  • Other issues of separate property versus marital property
  • Distribution of joint liabilities, and
  • Discovering hidden assets.
High-Asset Divorce Considerations

We realize there are additional considerations in a high-asset divorce beyond the division of assets such as privacy of the individuals, goodwill of a business, or unwanted media attention. We can cater our representation to your needs and your busy schedule. At the onset of representation, we will listen to your goals and come up with a plan to best achieve them. You will be kept informed each step of the way and involved in this process as little or as much as you would like.


So if you are considering divorce, or divorce proceedings have already begun, feel free to contact the high asset divorce group at Maya Murphy today to discuss your options. We are available anytime at 203-221-3100 or by email at JMaya@mayalaw.com. Schedule your free consultation today!

How Long Will My Supervised Visits with My Children Last in Connecticut?

If there was a reason for your agreement to have supervised visits with your children, then you must comply with the agreement until the situation has changed.  Once your prior situation has changed, and you feel you should be entitled to unsupervised visits with your children, you may file a motion to modify visitation.

However, it is important to keep in mind that although you feel confident that your previous situation has changed, the deciding factor is how the court views your progress.  Reports from the children’s guardian ad litem as well as your doctors (etc.), may be the deciding factor in modifying the custody agreement.  If you are not represented by counsel, it would best to consult an experienced family law attorney who can assist you in requesting a change in visitation and educate you on the best steps to take in the future.

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

Ensure Sufficient Insurance to Cover Potential Hazards at Your Home

Do you own a dog or cat? Do you have a pool or a trampoline? Do you ever offer house guests an alcoholic drink?

This is National Safe at Home Week. If you’re like me, you probably haven’t spent a lot of time thinking about how visitors to your home could hurt themselves.

In part, we fail to notice the hidden dangers that lurk in our homes, because we know the risks and have taught ourselves to avoid them. Perhaps your porch railing is wobbly, but you know not to lean against it. Or maybe your dog is aggressive around food, so you have learned to give him a wide berth while he’s eating. Your house guests, on the other hand, might not know to take these precautions.

Then there are the potential dangers we recognize, but choose to live with, in hopes that visitors will also use good judgment. When you invite people to swim in your pool, you assume they know their own swimming ability, and won’t go in unless they’re comfortable around water. If you hold a dinner party, you try to be a good host, but hope that people know when they have had too much to drink.

Importance of Property Insurance

The unfortunate truth is that accidents do happen, and we live in a world where it’s not unheard of for relative to sue relative, friend to sue friend, neighbor to sue neighbor. We need to prepare for the possibility that someone may be injured at our home, and we should all have sufficient insurance coverage to protect us in case that happens.

Whether you own or rent your home, your property insurance should include liability coverage. Liability insurance covers you if someone is injured on your property, and may also cover you for certain injuries that occur away from your home. For example, if someone slips and hurts themselves at your house, your insurance company will cover that person’s medical expenses and the cost to defend you in court if they sue you. If you were walking your dog in the park and he bit someone, your insurance would probably cover that, too. Understand, however, that liability insurance only covers other people who are injured at your home. It doesn’t cover you or your family if you’re injured.

It’s important to discuss your needs with your insurance agent. If you have potential hazards on your property, such as a swimming pool, a dog or a house is in poor repair, find out exactly what you need to do to protect yourself. You may need to buy a separate liability policy to ensure that you’re sufficiently covered.

Dogs

Almost every state has a law that deals with dog bites. These laws can vary a lot from state to state, so you need to check the laws in your area to see how dog bites are treated. Talk to your insurance company about whether your homeowner’s or renter’s insurance policy covers not only dog bites in general, but if it covers your breed of dog.

Dog bites cost insurance companies millions of dollars each year, and it’s not uncommon for an insurance company to refuse to cover certain breeds of dogs, especially those considered by experts to be the “most dangerous.” These breeds include pit bulls, rottweilers, and chow chows, just to name a few.

It’s also common for many insurance companies to increase the insurance premiums or cancel the policy altogether after an owner’s dog bites a victim and costs the company money.

Serving Alcohol

If you serve alcohol to guests at your home, you need to be prepared for the fact that they could be involved in a traffic accident after leaving your home.

A drunk person cannot collect for injury to himself, but a third party injured by the actions of a drunk person can collect from the party’s host under certain circumstances. This is especially important when the drunk person has little or no insurance to cover a serious or fatal injury.

Laws vary widely by state, with some states not imposing any liability at all on social hosts. Other states limit the responsibility of hosts to injury that occurs on the premises where the party is being held. Other states extend hosts’ liability to injuries from traffic accidents involving the person to whom they served alcohol.

Most states impose liability on social hosts where alcohol is served to a minor, if the host was reckless in serving alcohol, or if the host should have recognized the extent of the guest’s intoxication and not served him or her more alcohol.

Swimming Pools

Swimming pools can be fun, but drowning is one of the leading causes of death among young children. If you have a pool, you have an obligation to take all of the necessary steps to ensure the safety of your family, your neighbors, and your guests–even uninvited guests. But you should also be prepared for the worst-case scenario: Accidents can happen, even if you have taken all of the necessary precautions. As a pool owner, you need to protect yourself if an accident occurs.

Purchase swimming pool insurance coverage. Your homeowner’s insurance, renter’s insurance or condo insurance usually will not cover you for pool-related accidents and lawsuits. You may also want to purchase a separate liability policy.

Check with your insurance agent to find out what safety and protective equipment is required by your policy. Also ask whether discounts are available if you install additional types of equipment, such as pool alarms.

By Jennifer King

At Maya Murphy, P.C., our experienced team of personal injury attorneys is dedicated to achieving the best results for individuals and their families and loved ones whose daily lives have been disrupted by injury.  Our personal injury attorneys assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and throughout Fairfield County. If you have any questions relating to a personal injury claim or would like to schedule a free consultation, please contact our Westport office by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

What Does It Mean if My Employee is Subject to Income Withholding in Connecticut?

Child support is often collected through income withholding orders which means it is paid by the non-custodial parent’s employer out of the parent’s wages.  Income withholding can include withholding wages or paychecks, commissions, bonuses, unemployment compensation, worker’s compensation insurance, or retirement benefits.  If an employer receives an income withholding order, the employer must withhold money as required by the court order.  The employer is responsible for sending payments within seven days of withholding the money from the employee’s wages or earnings, and to continue to withhold and send payments until they are notified by the court that the order is suspended or changed.


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

What is “FINRA” and What Does (Should) It Do?

Attorneys here at Maya Murphy frequently are called upon to represent individuals who are the subject of a FINRA inquiry, or a party to a  FINRA arbitration.  We routinely post to our website client alerts regarding FINRA-related decisions but it recently occurred to us that we should take a step back and issue a post about FINRA itself—what it is, what it does (or doesn’t do), and where it came from.  Knowledge is power and because FINRA so pervades the financial industry to be forewarned is to be forearmed.

What is FINRA?

“FINRA” is an acronym for the “Financial Industry Regulatory Authority,” a so-called “Self Regulating Organization.”  On July 30, 2007, the New York Stock Exchange and the National Association of Securities Dealers (“NASD”) combined to form FINRA.  To be sure, FINRA is cloaked in official garments of the purest silk.  It was established under § 15A of the Securities Exchange Act of 1934, 15 U.S.C. § 78o-3, Karsner v. Lothian, 532 F.3d 876, 879 n.1 (D.C. Cir. 2008). It is authorized to exercise comprehensive oversight over “all securities firms that do business with the public.”  Sacks v. SEC, 648 F.3d 945 (9th Cir. 2011) (quoting 72 Fed. Reg. 42170 (Aug. 1, 2007)).

With respect to the creation of FINRA, the NASD, itself, made it clear that the new entity was directed at “the regulation of the financial markets.”  Id. “By virtue of its statutory authority, NASD wears two institutional hats: it serves as a professional association, promoting the interests of its members; and it serves as a quasi-governmental agency, with express statutory authority to adjudicate actions against members who are accused of illegal securities practices and to sanction members found to have violated the Exchange Act or Securities and Exchange Commission  . . . regulations issued pursuant thereto.”  NASD v. SEC, 431 F.3d 803, 804 (D.C. Cir. 2005) (citations omitted).

FINRA is a private corporation and the largest “independent” regulator of securities firms in the United States, overseeing approximately 4,800 brokerage firms, 172,000 branch offices, and 646,000 registered securities representatives.  It (not necessarily by claimant choice or mere happenstance) benefits from up to 9000 arbitration filings every year.  FINRA has a staff of approximately 3,000 employees and in 2009, collected revenue of $775 Million.  Senior FINRA management enjoys seven-figure annual salaries.

Codes for Industry Disputes and Customer Disputes

FINRA maintains two separate but similar “Codes of Arbitration Procedure”: one for “customer disputes” and another for “industry disputes.” In drafting its Industry Code, FINRA has apparently chosen to “trim some of the fat” off of the controlling law.  For example, Rule 13209 (amended December 15, 2008) states: “During an arbitration, no party may bring any suit, legal action, or proceeding against any other party that concerns or that would resolve any of the matters raised in the arbitration.”

In Arnold Chase Family, LLC v. UBS AG, 2008 U.S. Dist. LEXIS 58697 (D. Conn. Aug. 4, 2008), Judge Kravitz (in analyzing the analogous FINRA “customer” Rule 12209) demonstrated remarkable restraint in reminding UBS that within the Second Circuit (which includes Connecticut and New York) since at least 1998, United States District Courts have had not only the right, but also the duty to entertain requests for preliminary injunctions during the pendency of arbitration.  See Am. Express Fin. Advisors, Inc. v. Thorley, 147 F.3d 229, 231 (2d Cir. 1998). But FINRA’s arbitral disdain for the twin plinths of fundamental fairness and the opportunity to confront one’s accusers does not stop there.

Code Requirements

The Code’s §§ 13400-13402 require that at least one “non-public arbitrator” (i.e., one who within the last five years was associated with, or registered through, a broker or a dealer) serve on every three-person arbitration panel.  Given the state of the economy, in general, and the sudden appearance, disappearance, and consolidation of Wall Street firms, in particular, it is not unreasonable for a “non-public arbitrator” to have past connections or future aspirations with respect to a corporate party to the arbitration.[1] 

This ethical tar pit is bottomless, as evinced by Rule 13410, which vests in the “Director of FINRA Arbitration” discretion to retain an arbitrator who fails to make a required disclosure, notwithstanding a timely notice of disqualification by one of the parties See, generally, Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119 (9th Cir. 2005).

Interfering with Productive Arbitration

FINRA also makes it clear that it will not permit its Code to let the discoverable truth get in the way of an otherwise productive arbitration.  Rule 13506(a) ostensibly permits pre-arbitration requests for documents or information, provided such requests do “not require narrative answers or fact finding,” thereby rendering such requests virtually useless.  Rule 13510 states outright that depositions are “strongly discouraged” and permitted “only under very limited circumstances.”  The absence of meaningful pre-arbitration discovery makes the proceeding something akin to “trial by ambush.”  Rule 13604(a) states: “The panel will decide what evidence to admit.  The panel is not required to follow state or federal rules of evidence.”

Finally, Rule 13904 permits rendition by the panel of a skeletal or elliptical award devoid of underlying factual findings or legal reasoning.  Even if the parties jointly request an “explained decision” (requiring an additional $400.00 “honorarium” to the FINRA chairperson), only “general reasons” for the award are required, and inclusion of legal authorities and damage calculations is specifically not required.  Under these circumstances, mere comprehension of the basis for the award, much less meaningful judicial review of the award even under the most stringent “manifest disregard” standard (assuming such standard of review still exists, see Stmicroelectronics, N.V. v. Credit Suisse Securities (USA) LLC 648 F.3d 68, 78 (2d Cir. 2011), is rendered impossible.

The take-away from this is that for financial industry professionals, FINRA rules, investigations, and arbitrations (however unsatisfying) are often the only game in town.  If you find yourself trying to negotiate the FINRA minefield and need help, contact us at the Maya Murphy, P.C. office located in Westport, Connecticut, at (203) 221-3100.

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.


[1] In Arnold Chase Family, LLC v. UBS AG, 2008 U.S. Dist. LEXIS 58697 (D. Conn. Aug. 4, 2008), Judge Kravitz made pointed reference to both the sudden demise of Bear Stearns and the fact that securities customers do not have much say in the writing of FINRA’s rules.  Id. at *8-9, *13-14.

A Summary of Sexual Harassment Workplace Policies in Connecticut

Unfortunately, many instances of sexual harassment in the workplace go unreported, due either to a fear of retaliation or uncertainty as to whether the conduct constituted sexual harassment.  Whatever the case, no employee should feel demeaned in any way while on the job.  The following provides an overview of the various laws and regulations concerning sexual harassment in Connecticut, and the various steps employers must take to ensure compliance with the law.

First and foremost, even before consulting an attorney, anyone with questions or concerns relating to human rights or discrimination issues in Connecticut should consult Connecticut’s Commission on Human Rights and Opportunities (CHRO), which states that its mission “is to eliminate discrimination through civil and human rights law enforcement and to establish equal opportunity and justice for all persons within the state through advocacy and education.”  The site provides valuable resources and links.  With regard to sexual harassment, the site contains a step-by-step guide on what to do if you feel you have been the victim of sexual harassment.

The Commission gets its authority from Connecticut General Statute § 46a-54, which grants the Commission the authority to “require an employer having three or more employees to post in a prominent and accessible location information concerning the illegality of sexual harassment and remedies available to victims of sexual harassment,” and second, “to require an employer having fifty or more employees to provide two hours of training and education to all supervisory employees [ . . . ].”  The statute further provides that the training and education “shall include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment.”

What is sexual harassment?

By way of reference, sexual harassment refers to “any unwelcome sexual advances or requests for sexual favors or any conduct of a sexual nature.”

Employers with 3+ Employees

The information that is required of an employer having three or more employees includes, but is not limited to:

  • The statutory definition of sexual harassment and examples of different types of sexual harassment;
  • Notice that sexual harassment is prohibited by the State of Connecticut’s Discriminatory Employment Practices Law and Title VII of the 1964 Civil Rights Act;
  • The remedies available to a victim of sexual harassment, which can include but are not limited to:
    • Cease and desist orders;
    • Back pay;
    • Compensatory damages; and
    • Hiring, promotion or reinstatement;
  • Notice that the harasser may be subject to civil and/or criminal penalties;
  • The contact information for the CHRO;
  • A statement that Connecticut law requires that a formal written complaint be filed with the Commission within 180 days of the date when the alleged harassment occurred;
  • A large bold-faced notice stating, “Sexual Harassment is Illegal.”
    Employers with 50+ Employees

    An employer with fifty or more employees, in addition to the aforementioned requirements, must provide two hours of specialized sexual harassment training, which “shall be conducted in a classroom-like setting, using clear and understandable language and in a format that allows participants to ask questions and receive answers.”  The statute provides a long list of the specific topics that an employer can and should include in the training.


    It is the hope that the above provides a concise, easy to understand summary of the policies that an employer must abide by when it comes to sexual harassment.  If you feel that you have been the victim of sexual harassment, or even if you are not sure, you should consult with an attorney experienced in employment law.  The attorneys at Maya Murphy, P.C. regularly represent employees throughout the Fairfield County and New York City regions, and are ready to advocate on your behalf.  If you have questions or want to schedule a consultation, please contact Joseph C. Maya, Esq. at 203-221-3100 or at JMaya@mayalaw.com.

    Court Awards Damages for Breach of Non-Compete Agreement

    Van Dyck Printing Co. v. DiNicola, 43 Conn. Supp. 191

    Mr. Anthony DiNicola worked for Van Dyck Printing Company as a sales representative from March 11, 1969, to April 1987.  Mr. Leonard Drabkin, Van Dyck’s president, who had known Mr. DiNicola from Columbia Printing Company where Mr. DiNicola had worked for thirteen years, hired him.  Mr. DiNicola received as wages a car allowance, $150.00 per week draw on his commissions pay, and commissions for sales such that he received at least 7% on the first $100,000 of sales and a higher percentage on sales beyond $100,000.  It was not until a month into working that Van Dyck presented Mr. DiNicola with an employment agreement that the parties both signed.

    The employment agreement contained the finalized commission rate schedule that would apply to Mr. DiNicola’s employment with Van Dyck.  The agreement also contained a covenant not to compete that prohibited him from providing services to Van Dyck’s customers while working for a company that provided services in “any way similar to the type of business conducted by Employer [Van Dyck] at the time of termination of this agreement” for a period of twelve months.  The restrictive covenant further stipulated that the agreement would become enforceable by injunction for an addition twelve months (extending the total duration to twenty-four months) if there was evidence of a breach.

    Breach of Non-Compete

    Mr. DiNicola voluntarily terminated his employment with Van Dyck in April 1987 and immediately began to work for Image Development, Inc., a new company he formed with a second former Van Dyck employee.  He owned 50% of the shares in the company until he sold them in 1989 to his partner.  Van Dyck sued Mr. DiNicola for breach of the non-compete agreement and sought damages since injunctive relief was moot due to the expiration of the time period for enforcement by injunction.

    Mr. DiNicola argued that the agreement was not enforceable and that Van Dyck was not entitled to any damages because the agreement lacked consideration.  He further argued that Van Dyck breached the employment contract during his employment by “unilaterally changing the terms to suit itself”.  The Superior Court in New Haven held that the non-compete agreement was enforceable and granted Van Dyck’s request for relief in the form of damages.

    Past Consideration vs. New Consideration

    As a general contract principle, past consideration cannot be used to legitimate an agreement between an employer and employee once the employee has already commenced employment.  Mr. DiNicola asserted that there was not any new form of consideration when he signed the non-compete agreement that would make its provisions binding on him.

    The court rejected this contention and found that there was indeed new consideration for the non-compete agreement in the form of the finalized commission rate schedule that had previously not existed.  When Mr. DiNicola began with employment with Van Dyck not all of the precise employment provisions were finalized between the parties.  It was the employment contract and non-compete agreement that contained the finalized employment details and resolved any existing questions or issues.

    The Court’s Decision

    The court likewise rejected Mr. DiNicola’s claim that Van Dyck had invalidated the non-compete agreement when it unilaterally changed its provisions to overwhelmingly favor its interests over those of him.  He argued that the company had repeatedly changed the method used to calculate his commission payments.  The employment agreement did not specify a method to be used to calculate Mr. DiNicola’s payments under the commission rate schedule and as such, any change in method would not constitute a breach of Van Dyck’s obligations under the agreement.

    The court recognized that the period allowing injunctive relief had expired but granted Van Dyck’s request for damages.  Damages, according to the court, were calculated and awarded to reflect the loss suffered by the enforcing party (Van Dyck) in relation to Mr. DiNicola’s breach of the non-compete agreement.  The court calculated that Van Dyck lost $169,000.69 in sales in direct connection to Mr. DiNicola’s breach and applied a 35% company profitability rate, a statistic presented during Mr. DiNicola’s testimony.  This meant a total damages award of $59,151.29 for Van Dyck Printing Company.

    The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County. 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.

    Continued Employment is Inadequate Consideration in Absence of At-Will Employment

    Cost Management Incentives, Inc. v. London-Osborne, 2002 Conn. Super. LEXIS 3967

    Cost Management Incentives, Inc. was a company that specialized in the placement of employees in the pharmaceutical industry.  This case addressed covenants signed by the company and two former employees, Ms. Yolanda London-Osborne and Ms. Kristen Herman.  The company presented the two employees with non-compete agreements in May 1996 after several years of employment.  The restrictive covenant contained a one-year non-compete clause and a two-year non-solicitation clause.

    Neither woman was afforded the opportunity to consult with a lawyer to go over the agreement and both felt they were in jeopardy of termination should they refuse to sign.  The agreement did not offer anything in addition to their current salary and benefits.  Mr. David Hallen, the president and Chief Executive Officer of the company, gave them approximately five minutes to skim and sign the agreements, preventing the women from gaining a firm grasp on what their obligations were under the agreement.  The employees continued in their employment in same manner and with the same benefits until the company terminated them.

    Inadequate Consideration

    Cost Management sued the two former employees and asked the court to issue an order preventing any violations of the covenant.  Ms. London-Osborne and Ms. Herman both sought an order declaring that the agreement was unenforceable on the grounds of inadequate consideration and the inappropriate and egregious conduct of the company’s management.  Both former employees further contended that they did not breach the agreement and there was no indication that they were likely to do so.  The court found in favor of the former employees and held that the restrictive covenants were unenforceable because they lacked consideration and their provisions were so broad that they unnecessarily restricted their ability to procure future employment.

    The restrictions in the agreement prohibited employment with any business enterprise engaged in facilitating temporary and/or permanent placement in the pharmaceutical industry for one year after termination.  The court found this specific nation-wide restriction to be reasonable since the company maintained national operations.

    The court however found that the two-year non-solicitation clause was unreasonable and rendered the covenant unenforceable.  This was overly broad and restrictive since 70-75% of Cost Management’s business came from a mere six pharmaceutical companies.  The court commented that Cost Management should have tailored this clause to protect its legitimate business interests without placing such an extensive hardship on former employees.  Analysis of the covenants also led the court to hold that the provisions provided the employer with much more protection than was deemed necessary or permissible.

    The Court’s Decision

    While the finding of unreasonable provisions is sufficient to invalidate a restrictive covenant, the court went on to discuss the lack of consideration, a factor that also renders a non-compete agreement unenforceable.  Connecticut law indicates that continued employment is not adequate consideration for a non-compete agreement for employees that are not working on an at-will basis.  Continued employment is sufficient for employees working on an at-will basis but this was not the case with Ms. London-Osborne and Ms. Herman.

    For these reasons, the court denied Cost Management’s request for injunctive relief and declared that the agreements were unenforceable and void under Connecticut law.


    The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County.  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.

    Sufficient Consideration for At-Will Employees

    Home Funding Group, LLC v. Kochmann, 2007 U.S. Dist. LEXIS 41376

    Home Funding Group, LLC was a New York corporation with primary business operations in Connecticut that engaged in the residential mortgage brokerage business.  The company employed Mr. Nicholas Kochmann and Mr. Patrick Dougherty in its New Jersey office.  They worked at-will for the company from January 2004 to May 1, 2006, and July 18, 2006, respectively.  The company had both employees sign an Employment Agreement that contained non-compete and non-solicitation clauses to protect Home Funding’s business interests.

    The employees later signed an “Invention Assignment Agreement” stating that Home Funding was the sole owner of any invention connected to their employment and that it would maintain full intellectual property rights.  The agreement stated that Connecticut law would govern any legal disputes and litigation in state and/or federal court.  Both employees signed a new restrictive covenant in March 2006 that amended and superseded the 2004 Employment Agreement.

    Misters Kochmann and Dougherty both voluntarily terminated their employment with Home Funding and Hamilton Financial, a direct competitor in the mortgage broker industry, hired them shortly thereafter.  Home Funding sued its two former employees for breach of the non-compete agreements and requested they be enjoined from further employment with Hamilton Financial.

    The Court’s Decision

    Misters Kochmann and Dougherty asserted that the agreements were not legally binding on them because they lacked valid consideration, claiming that continued employment is inadequate consideration for a covenant executed after the start of employment.  The federal court sitting in Bridgeport, Connecticut rejected this argument and held that the agreements were properly executed, contained adequate consideration, and were binding upon the parties.

    The former employees argued that Connecticut law requires an employer to promise to something different from what it is already obligated to do when it wants to modify/amend a restrictive covenant with one or more of its employees.  The court however applied Home Funding’s legal assertion that at-will employees may be terminated at any time at the employer’s discretion and thus continued employment amounted to adequate consideration to support a valid non-compete agreement.

    The court noted that in this case, Home Funding had the burden of proof at trial to demonstrate that the agreement was correctly executed and enforceable.  Home Funding was able to provide such proof and the federal court held in its favor.  Had Misters Kochmann and Dougherty not been at-will employees however, the court would have likely held that the agreement did not have the requisite consideration and could have invalidated the agreement in its entirety.

    The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County.  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.