Lack of Non-Compete Agreement May Deprive New York Employers of Real Protection
Can an employer in New York prevent an employee from working for a competitor if no non-competition agreement was ever signed? Relying on federal and state court decisions in New York labor/employment law Judge Lewis Kaplan concluded that the answer is no.
Recently, American Airlines sued a former employee who possessed sensitive company information and went to work for Delta. Delta investigated the matter and found that the employee never disclosed any of the information to Delta and the former employee offered to destroy or return all materials.
In American Airlines, Inc. v. Charles F. Imhof and Delta Airlines Inc. Judge Lewis Kaplan concluded that there was no material risk of irreparable harm to American Airlines on the taking of the information. Judge Kaplan went on to hold that the inevitable disclosure theory, which bars an employee from working for a competitor because he would be unable to avoid using confidential information gained from working for the former employer to benefit the new employer, only applies when the employee has knowledge of actual confidential information and there is deliberate misappropriation of the information.
