Feiner & Lavy, P.C. v. Zohar

Summary

The Appellate Division, First Department, modified and otherwise affirmed an order denying defendants’ motion for summary judgment in a dispute involving an immigration law firm’s employment and confidentiality agreements. The court held that the employment agreement’s broad noncompetition provision was void and unenforceable insofar as it restricted the former attorney’s practice of law, but that client nonsolicitation and confidentiality claims presented triable issues of fact. The court dismissed the punitive damages claim because punitive damages are not a separate cause of action and the allegations did not support such damages.

Holdings

1. The provision barring Zohar from conducting business activities the same as or similar to plaintiff's within 90 miles of New York City or in the Israeli community is void and unenforceable under Rule 5.6(a)(1).
2. The nonsolicitation provision may be enforceable because it restricts solicitation of plaintiff's clients rather than the practice of law generally, and defendants failed to establish its unenforceability as a matter of law.
3. Summary judgment was properly denied because triable issues remained concerning whether defendants solicited plaintiff's clients and whether Asli disclosed confidential client information in violation of the agreements.
4. Rule 5.6(a)(1) did not render Asli's confidentiality agreement void or unenforceable because the rule applies to agreements restricting a lawyer's right to practice, not to an otherwise enforceable confidentiality agreement.
5. Plaintiff's punitive-damages claim should have been dismissed because there is no separate cause of action for punitive damages and the allegations did not support a demand for such damages.

Questions Presented

1. Whether the employment agreement's noncompetition and nonsolicitation provisions were enforceable under Rule 5.6(a)(1) of the New York Rules of Professional Conduct.
2. Whether defendants established as a matter of law that they did not solicit plaintiff's clients or disclose confidential client information.
3. Whether Rule 5.6(a)(1) rendered Asli's confidentiality agreement void and unenforceable.
4. Whether plaintiff could maintain a separate cause of action or demand for punitive damages.

Disposition

affirmed