Brown & Brown, Inc., et al., Appellants,v.Theresa A. Johnson, et al., Respondents. (AD No. CA 13-00340)BriefN.Y.May 6, 2015APL-2014-00103 To be Argued by: THOMAS J. CAHILL (Time Requested: 20 Minutes) Erie County Clerk's Index No. 12011-605320 Appellate Division, Second Department Docket No. CA-13-00340 C!tnurt nf Appeals nftqc ~tate nf New Vnrk -------+tt.------ BROWN & BROWN, INC. and BROWN & BROWN OF NEW YORK, INC., Plaintiffs-Appellants, -against- THERESA A. JOHNSON and LAWLEY BENEFITS GROUP, LLC, Defendants-Respondents. BRIEF OF PLAINTIFFS-APPELLANTS LIITLER MENDELSON, P.C. 900 Third A venue New York, New York 10022 Tel.: (212) 583-9600 Fax: (212) 832-2719 SATTERLEE STEPHENS BURKE & BURKE LLP 230 Park A venue, Suite 1130 New York, New York 10169 Tel.: (212) 818-9200 Fax: (212) 818-9606 -and- WARD GREENBERG HELLER & REIDY LLP 300 State Street Rochester, New York 14614 Tel.: (585) 454-0700 Fax: (585) 423-5910 Attorneys for Plaintiffs-Appellants Date Completed: July 21, 2014 APPELLANTS'§ 500.1(!) DISCLOSURE STATEMENT Pursuant to§ 500.1(±) of the Rules of Practice of this Court, Plaintiffs-Appellants Brown & Brown, Inc. and Brown & Brown of New York, Inc. state that the following are all parents, subsidiaries and affiliates of Plaintiffs-Appellants: Acumen RE Management Corporation Advocator Group Holding Company, Inc. Aevo Insurance Services, LLC AFC Insurance, Inc. AGIA Premium Finance Company, Inc. Alexander Anthony Insurance, LLC Allocation Services, Inc. American Claims Management - Atlantic Region, LLC American Claims Management, Inc. American Specialty Insurance & Risk Services, Inc. Apex Insurance Agency, Inc. Arrowhead General Insurance Agency - Atlantic Region, LLC Arrowhead General Insurance Agency Holding Corp. Arrowhead General Insurance Agency Superholding Corp. Arrowhead General Insurance Agency, Inc. Arrowhead Specialty Underwriting, LLC A VIRS Acquisition, LLC AxiomRe, LP Azure International Holding Co. B&B Protector Plans, Inc. B&B TN Holding Company, Inc. BB ACQUISITION, LLC BB FL Holding 2, LLC BB FL Holding, LLC Beecher Carlson Brokerage, Ltd. Beecher Carlson Cayman, Ltd. Beecher Carlson Holdings, Inc. Beecher Carlson Insurance Services of Colorado, LLC Beecher Carlson Insurance Services, LLC Beecher Carlson Management, Ltd. Beecher Carlson of Florida, Inc. Braishfield Associates of New York, Inc. Braishfield Associates, Inc. Brown & Brown Acquisition Group, LLC Brown & Brown Agency of Insurance Professionals, Inc. Brown & Brown Benefit Advisors, Inc. Brown & Brown Disaster Relief Foundation, Inc. Brown & Brown Insurance Agency of Virginia, Inc. Brown & Brown Insurance Brokers of Sacramento, Inc. Brown & Brown Insurance of Arizona, Inc. Brown & Brown Insurance of Georgia, Inc. Brown & Brown Insurance of Nevada, Inc. Brown & Brown Insurance Services of California, Inc. Brown & Brown Insurance Services of The Bay Area, Inc. Brown & Brown Lone Star Insurance Services, Inc. Brown & Brown Metro, Inc. Brown & Brown NJ Holding Co., Inc. Brown & Brown of Arkansas, Inc. Brown & Brown of Bartlesville, Inc. Brown & Brown of Central Carolina, Inc. Brown & Brown of Central Michigan, Inc. Brown & Brown of Central Oklahoma, Inc. Brown & Brown of Colorado, Inc. Brown & Brown of Connecticut, Inc. Brown & Brown of Delaware, Inc. Brown & Brown of Detroit, Inc. Brown & Brown of Florida, Inc. Brown & Brown of Garden City, Inc. Brown & Brown of Illinois, Inc. Brown & Brown of Indiana, LLC Brown & Brown of Iowa, Inc. Brown & Brown of Kentucky, Inc. Brown & Brown of Lehigh Valley, LP Brown & Brown of Louisiana, LLC Brown & Brown of Massachusetts, LLC Brown & Brown of Michigan, Inc. Brown & Brown of Minnesota, Inc. Brown & Brown of Mississippi, LLC Brown & Brown of Missouri, Inc. Brown & Brown of Nashville, Inc. Brown & Brown of New Hampshire, Inc. Brown & Brown of New Jersey, LLC Brown & Brown of New Mexico, Inc. Brown & Brown of New York, Inc. Brown & Brown of North Dakota, Inc. Brown & Brown of Northern Illinois, Inc. Brown & Brown of Ohio, LLC Brown & Brown of Oregon, LLC Brown & Brown of Pennsylvania, LP Brown & Brown of South Carolina, Inc. Brown & Brown of Tennessee, Inc. Brown & Brown of Washington, Inc. Brown & Brown of West Virginia, Inc. Brown & Brown of Wisconsin, Inc. Brown & Brown P A Holding Co. 2, LLC Brown & Brown P A Holding Co., LLC Brown & Brown Program Insurance Services, Inc. Brown & Brown Realty Co. Brown & Brown, Inc. Brown Holding, Inc. CC Acquisition Corp. Colonial Claims Corporation Combined Group Insurance Services, Inc. Decus Holdings (UK) Limited Decus Insurance Brokers Limited ECC Insurance Brokers, Inc. Elohssa, Inc. Florida Intracoastal Underwriters, Limited Company Graham-Rogers, Inc. Green Insurance Company Halcyon Underwriters, Inc. Healthcare Insurance Professionals, Inc. Healthcare Professionals Insurance Services, Inc. Hull & Company of New York, Inc. Hull & Company, Inc. ICA, LP Independent Consulting & Risk Management Services, Inc. Industry Consulting Group, Inc. International E & S Insurance Brokers, Inc. Investigation Solutions, Inc. Irving Weber Associates, Inc. Lancer Claims Services, Inc. MacDuff America, Inc. MacDuff Underwriters, Inc. Madoline Corporation Marquee Managed Care Solutions, Inc. Monarch Management Corporation National ConnectForce Claims, Inc. OnPoint Insurance Services, LLC OnPoint Underwriting, Inc. Peachtree Special Risk Brokers of New York, LLC Peachtree Special Risk Brokers, LLC Preferred Governmental Claim Solutions, Inc. Premier Interpreting & Transportation, Inc. Procor Solutions LLC Proctor Financial, Inc. Program Management Services, Inc. Public Risk Underwriters Insurance Services of Texas, LLC Public Risk Underwriters of Florida, Inc. Public Risk Underwriters of Georgia, Inc. Public Risk Underwriters of Illinois, LLC Public Risk Underwriters of Indiana, LLC Public Risk Underwriters of New Jersey, Inc. Public Risk Underwriters of The Northwest, Inc. Public Risk Underwriters, LLC Risk Management Associates, Inc. SIM Insurance Services, LLC Spectrum Wholesale Insurance Services, LLC Superior Recovery Services, Inc. Texas Security General Insurance Agency, Inc. The Advocator Group, LLC Title Pac, Inc. Tribal Nation Insurance Services, LLC TSG Premium Finance, LLC USIS, Inc. Y ouZoom Insurance Services, Inc. TABLE OF CONTENTS PRELIMINARY STATEMENT ............................................................................... 1 QUESTIONS PRESENTED ...................................................................................... 8 STATEMENT OF JURISDICTION .......................................................................... 9 PRESERVATION OF QUESTIONS FOR REVIEW ............................................... 9 STATEMENT OF FACTS ...................................................................................... 11 A. B&B' s Insurance Intermediary Business ............................................ 11 B. Johnson's Employment with B&B ...................................................... 12 C. B&B Introduced Johnson to Its Actual and Prospective Customers and Enabled Her to Develop Relationships and Goodwill with Them at B&B's Expense ............................................ 15 D. The Decline in Johnson's Job Performance ........................................ 17 E. Johnson's Solicitation of B&B Clients ............................................... 17 THE PROCEEDINGS BELOW .............................................................................. 19 A. Pleadings ............................................................................................. 19 B. Defendants' Summary Judgment Motion ........................................... 20 C. The Trial Court's Decision and Order ................................................ 20 D. The Fourth Department Appea1 ........................................................... 22 E. The Fourth Department's Order .......................................................... 22 DISCUSSION .......................................................................................................... 23 POINT I. THE AVAILABILITY OF PARTIAL ENFORCEMENT SHOULD BE DETERMINED UNDER FLORIDA LAW .......................... 23 1 A. Under New York Law, the Public Policy Exception to Honoring Otherwise Reasonable Choice of Law Is Narrowly Applied ................................................................................................ 24 B. Florida Law Governing Partial Enforcement of Restrictive Covenants Raises No Policy Concerns Under New York Law and Should Be Applied Here ............................................................... 28 C. The Fourth Department's Ruling Precluding Partial Enforcement as a Matter of Law Is Reversible Error Under Florida Law ......................................................................................... 34 POINT II. THE FOURTH DEPARTMENT'S RULING PRECLUDING PARTIAL ENFORCEMENT AS A MATTER OF LAW IS REVERSIBLE ERROR UNDER NEW YORK LAW .................. 36 A. Partial Enforcement of Restrictive Covenants Under New York Law ...................................................................................................... 36 B. Partial Enforcement Is Warranted Here .............................................. 39 C. There Is No Basis Under New York Law for the Fourth Department's Ruling Barring Partial Enforcement of the Non- Solicitation Covenant .......................................................................... 41 i. The Timing of Johnson's Receipt of the Employment Agreement Is Not Evidence of Bad Faith ................................ .41 ii. B&B Was Not Required to Tailor the Non-Solicitation Covenant to BDO Seidman ...................................................... .44 iii. The Severability Clause Is Not Evidence of Bad Faith ........... .48 D. B&B Has Not Had a Fair Opportunity to Take Discovery on the Issue of Partial Enforcement ............................................................... 52 CONCLUSION ........................................................................................................ 55 11 TABLE OF AUTHORITIES Page(s) CASES Ashland Mgt. Inc. v. Altair Invs. NA, LLC, 59 A.D.3d 97 (1st Dep't 2008) ....................................................... 6, 7, 37, 38, 42 Austin v. Mid State Fire Equip. of Cent. Florida, Inc., 727 So. 2d 1097 (Fla. Dist. Ct. App. 5th Dist. 1999) ................................... 32, 34 Awwad v. Capital Region Otolaryngology Head & Neck Group, No. 5334-07, 2007 WL 4623509 (N.Y. Sup. Ct. Albany Cty. Nov. 27, 2007) ................................................................................................................... 50 BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) .................................................................................. passim Boss v. Am. Exp. Fin. Advisors, Inc., 15 A.D.3d 306 (1st Dep't 2005), aff'd, 6 N.Y.3d 242 (2006) ............................ 26 Chiarizia v. Xtreme Rydz Custom Cycles, 43 A.D.3d 1353 (4th Dep't 2007) ....................................................................... 50 Colucci v. Kar Kare Auto. Grp., Inc., 918 So. 2d 431 (Fla. Dist. Ct. App. 4th Dist. 2006) ........................................... 32 Cooney v. Osgood Machinery, Inc. 81 N.Y.2d 66 (1997) ........................................................................................... 25 Dym v. Gordon, 16 N.Y.2d 120 (1965) ............................................................................... 4, 24, 25 Edwards v. Harris, 964 So. 2d 196 (Fla. Dist. Ct. App. 1st Dist. 2007) ............................................ 33 Exch. Int'l, Inc. v. Vacation Ownership Relief LLC, No. 6:Hkv-1273-0rl-35DAB, 2010 WL 4983669 (M.D. Fla. Oct. 27, 2010) ................................................................................................................... 33 Flaherty v. Coughlin, 713 F.2d 10 (2d Cir. 1983) ................................................................................. 54 111 Flickenger v. R.I. Fitzgerald & Co., Inc., 732 So. 2d 33 (Fla. Dist. Ct. App. 2d Dist. 1999) .............................................. 35 Globaldata Mgt. Corp v. Pfizer Inc., No. 600506/2005, 2005 WL 3487845 (N.Y. Sup. Ct. Nov. 23, 2005) .............. 53 GPS Indus., LLC v. Lewis, 691 F. Supp. 2d 1327 (M.D. Fla. 2010) .............................................................. 33 Hugh O'Kane Elec. Co., LLC v. MasTec N. Am., Inc., 19 A.D.3d 126 (1st Dep't 2005) ......................................................................... 27 Hylan Elec. Contracting, Inc. v. Mastec N. Am., Inc., No. 10052/02 (N.Y. Sup. Ct. Richmond Cty. Aug. 12, 2010) ........................... 30 IRE-Brasil Resseguros, S.A. v. Inepar Investments, S.A., 20 N.Y.3d 310 (2012) ......................................................................................... 46 Karpinski v. Ingrasci, 28 N.Y.2d 45 (1971) ........................................................................................... 36 Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34 (1961) ............................................................................................. 27 Koob v. IDS Fin. Servs., Inc., 213 A.D.2d 26 (1st Dep't 1995) ......................................................................... 26 Landmark Land Co., Inc. v. Sprague, 701 F.2d 1065 (2d Cir. 1983) ............................................................................. 54 Malcolm Pirnie, Inc. v. Werthman, 280 A.D.2d 934 (4th Dep't 2001) ....................................................................... 37 Mun. Capital Appreciation Partners, I, L.P. v. Page, 181 F. Supp. 2d 379 (S.D.N.Y. 2002) ................................................................ 51 N. Am. Products Corp. v. Moore, 196 F. Supp. 2d 1217 (M.D. Fla. 2002) .......................................................... 3, 35 PartyLite Gifts, Inc. v. MacMillan, 895 F. Supp. 2d 1213 (M.D. Fla. 2012) .............................................................. 33 lV Portware, LLC v. Barot, No. 603738/05, 2006 WL 516816 (N.Y. Sup. Ct. Mar. 2, 2006) ...................... .42 Sanders v. Winship, 57 N.Y.2d 391 (1982) ......................................................................................... 25 Scheiber v. St. John's Univ., 84 N.Y.2d 120 (1994) ......................................................................................... 25 Schultz v. Boy Scouts of Am., 65 N.Y.2d 189 (1985) ......................................................................................... 27 Scott, Stackrow & Co. v. Skavina, 9 A.D.3d 805 (3d Dep't 2004) .......................................................... 38, 44, 45, 47 Spinal Dimensions, Inc. v. Chepenuk, No. 4805-07, 2007 WL 2296503 (N.Y. Sup. Ct. Albany Cty. Aug. 9, 2007) ................................................................................................................... 37 State v. Welch-Richards, 209 A.D.2d 847 (3d Dep't 1994) ....................................................................... .41 Trans-Continental Credit & Collection Corp v. Foti, 270 A.D.2d 250 (2nd Dep't 2000) ..................................................................... .40 US/ Ins. Servs. LLC v. Miner, 801 F. Supp. 2d 175 (S.D.N.Y. 2011) ................................................................ 50 Vega v. Restani Constr. Corp., 18 N.Y.3d 499 (2012) ................................................................................... 44, 48 Weiser LLP v. Coopersmith, 74 A.D.3d 465 (1st Dep't 2010) ......................................................................... 37 Welsbach Elec. Corp. v. MasTec N. Am., Inc., 7 N.Y.3d 624 (2006) ........................................................................... 5, 25, 30, 47 William J. Jenack Estate Appraisers and Auctioneers, Inc. v. Rabizadeh, 22 N.Y.3d 470 (2013) ......................................................................................... 48 STATUTES CPLR 2221(d) .......................................................................................................... 21 v CPLR 3212(±) ........................................................................................................... 52 CPLR 5602 ................................................................................................................. 9 Fla. Stat. § 542.335(l) ....................................................................................... passim OTHER AUTHORITIES Donald J. Aspelund & Joan E. Beckner, Employee Noncompetition Law § 10:15 (2013) ..................................................................................................... 49 John A. Grant, Jr. & Thomas T. Steele, Restrictive Covenants: Florida Returns to the Original "Unfair Competition" Approach for the 21st Century ................................................................................................................ 32 MichaelS. Melbinger, CCH Executive Compensation 1455 (2012) ...................... 51 NY PJI 4:1, Comment .............................................................................................. 37 Restatement (Second) of Conflict of Laws § 187 .................................................... 27 Vl Plaintiffs-Appellants Brown & Brown, Inc. ("BBI") and Brown & Brown of New York, Inc. ("BBNY", and together with BBI, "B&B"), appeal from the February 7, 2014 Order of the Appellate Division, Fourth Department (the "Order"), pursuant to that court's Order of May 2, 2014, which granted plaintiffs' motion seeking leave to appeal to the Court of Appeals. PREL~INARYSTATEMENT This action arises from repeated breaches by defendant Theresa A. Johnson ("Johnson") of certain covenants contained in an employment agreement between Johnson and B&B (the "Employment Agreement"). While this case has involved a variety of issues arising from Johnson's multiple breaches of the Employment Agreement, which the trial court and the Fourth Department considered under the mandate of BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), and other authority, the focus of the instant appeal is the agreement's non-solicitation covenant- in particular, whether the non-solicitation covenant may be partially enforced to limit its application to only those customers with whom Johnson directly dealt while a B&B employee. The arguments set forth below are essentially twofold. First, that consistent with the Employment Agreement's choice-of-law clause, Florida law should be applied in order to determine whether the non-solicitation covenant may be partially enforced and that under Florida law, partial enforcement is fully available. 1 Second, that even applying New York law, as the Fourth Department erroneously did, there is no basis on this early summary judgment motion for a ruling precluding even the possibility of partial enforcement as a matter of law. Johnson had at one time been a valued B&B employee, in whose professional development B&B had invested considerable time, effort, and resources. B&B had, among other things, introduced Johnson to numerous of its key clients, with whom Johnson then worked during her B&B employment. After Johnson had been with B&B for just over three years, however, there was a decline in her job performance, which, following numerous warnings by B&B, ultimately resulted in the termination of her employment. Directly thereafter, Johnson was hired by defendant Lawley Benefits Group, LLC ("Lawley") and promptly began soliciting the very B&B clients with whom she had worked during her tenure with B&B, in direct violation of the Employment Agreement's non-solicitation covenant. B&B unquestionably has a compelling legitimate business interest in enforcing the non-solicitation covenant in order to prevent Johnson from soliciting the B&B customers with whom she actively worked while employed by B&B. See BDO Seidman, 93 N.Y.2d at 392 ("The employer has a legitimate interest in preventing former employees from exploiting or appropriating the goodwill of a client or customer, which had been created and maintained at the employer's 2 expense, to the employer's competitive detriment."); N. Am. Products Corp. v. Moore, 196 F. Supp. 2d 1217, 1228 (M.D. Fla. 2002). After all, the relationships Johnson has cultivated with these clients are directly attributable to the opportunities provided to her by B&B, and the goodwill these clients have toward Johnson was "created and maintained" at B&B's expense. BDO Seidman, 93 N.Y.2d at 392. Nonetheless, despite undisputed evidence that Johnson had in fact engaged in improper solicitation and incorrectly applying New York law in violation of the parties' Florida choice-of-law clause, the Fourth Department ruled that the non- solicitation covenant was unenforceable. Critically, the Fourth Department did not simply hold that the non-solicitation covenant was overbroad as written. It also held that partial enforcement of the non-solicitation covenant - i.e. "blue- penciling" the provision to limit its application to only those B&B clients with whom Johnson had previously dealt on B&B's behalf- was precluded as a matter of law. The Fourth Department based this ruling on its factual determination that B&B had engaged in bad faith conduct and overreaching despite the fact that because this motion was initially made at the inception of the litigation, no meaningful discovery had yet been conducted on this or any other factual issue. As fully set forth herein, the Fourth Department's holding that partial enforcement of the restrictive covenants is barred as a matter of law is 3 unsustainable. This is equally true irrespective of whether Florida or New York law governs. As an initial matter, it is clear that while partial enforcement is warranted under both New York and Florida law, the Fourth Department clearly erred in not applying Florida law consistent with the parties' intent. This is particularly true given that the Fourth Department expressly held the choice of Florida law to be a reasonable one in light of the multiple contacts linking Florida with the parties and transaction at issue. See Order at 3. Indeed, the Fourth Department's sole basis for nullifying the choice of Florida law was its conclusion that two provisions in the governing Florida statute - specifically, a bar on considering employee hardship in evaluating restrictive covenants and a mandate that such covenants be construed so as to protect legitimate business interests1 -were "truly obnoxious" to New York policy. This, according to the Fourth Department, warranted a sweeping invalidation of Florida law for all purposes of this action. Order at 3-4. This holding was erroneous. In fact, the public policy exception to honoring an otherwise reasonable choice-of-law clause is only sparingly applied, see Dym v. Gordon, 16 N.Y.2d 120, 128 (1965), and should be strictly limited to those rare situations where applying the chosen jurisdiction's law would give rise to a result 1 See Fla. Stat. § 542.335(1). 4 that is "truly obnoxious" to a fundamental New York policy. See Welsbach Elec. Corp. v. MasTec N. Am., Inc., 7 N.Y.3d 624,629 (2006). Here, applying Florida law to the issue of partial enforcement of the non- solicitation covenant gives rise to no public policy concerns whatsoever and certainly would not result in an outcome "truly obnoxious" to a fundamental New York public policy. On the contrary, from a policy perspective, Florida law governing partial enforcement is fundamentally aligned with New York law insofar as both jurisdictions permit- and regularly utilize - the blue-pencil mechanism to render what is otherwise determined to be an overbroad covenant enforceable where an employer has demonstrated a legitimate business interest in the restriction. 2 The two specific provisions of the Florida statute which the Fourth Department characterized as "truly obnoxious" to New York policy are unrelated to the issue of partial enforcement and provide no basis for invalidating the application of Florida law as to this issue. Moreover, even if the Court were to evaluate the public policy implications of the two Florida statutory provisions cited by the Fourth Department- and on this appeal, there is no reason for the Court to do so, given their irrelevance to 2 While New York and Florida have somewhat differing approaches to this issue- Florida provides for partial enforcement under most circumstances whereas in New York, partial enforcement, while widely available, is based on a case-specific analysis - this is a difference in degree rather than of fundamental policy. Certainly, Florida law governing partial enforcement is in no sense "truly obnoxious" to New York public policy. See Order at 4. 5 partial enforcement - it is clear that the provisions present no genuine public policy concerns. In fact, the guiding principles of Florida and New York law in evaluating restrictive covenants are strikingly similar: both jurisdictions require an employer seeking to enforce a restrictive covenant to show the existence of a legitimate business interest, both jurisdictions seek to guard against harmful and anticompetitive restrictions on market competition, and both jurisdictions have shown a consistent willingness to impose limits on overbroad and anticompetitive restrictions. In short, it was error for the Fourth Department to invalidate the Florida choice-of-law clause on policy grounds, and Florida law should be applied on this appeal. Under Florida law, the Fourth Department's ruling that partial enforcement is barred as a matter of law due to B&B 's supposed bad faith conduct is not sustainable. In particular, Florida law provides that a specific factual inquiry as to the employer's conduct with respect to seeking the covenants at issue is not a prerequisite to partial enforcement. Rather, partial enforcement of overbroad covenants is generally available where an employer has shown it seeks to protect a legitimate business interest. See, e.g., Ashland Mgt. Inc. v. Altair Invs. NA, LLC, 59 A.D.3d 97, 106 (1st Dep't 2008) (finding partial enforcement of non-compete covenant warranted where unlimited durational term was overbroad but employer had otherwise established interest in protecting information). Thus, applying 6 Florida law to the issue of partial enforcement, as this Court should, it is unequivocally clear that the Fourth Department's ruling must be reversed. Moreover, and just as importantly, while the Fourth Department erred in not applying Florida law, it is equally clear that the Fourth Department's ruling barring partial enforcement as a matter of law is unsustainable even if New York law is applied. New York courts routinely grant partial enforcement of non-solicitation covenants and other post-employment restrictions where, as here, the employer seeks no more than to protect a legitimate business interest. See, e.g., Ashland Mgt. Inc., 59 A.D.3d at 106. The Fourth Department's hasty conclusion that B&B acted in bad faith - the grounds for its ruling - is based on a fundamental misreading of both controlling New York precedent and the documentary record. The few instances of supposed bad faith which the Fourth Department cited - such as the timing of the agreement's initial signing, the fact that B&B did not tailor the agreement to New York law (which would have required disregarding the Florida choice-of-law clause), and the inclusion of a standard severability clause in the Employment Agreement- do not in fact reflect any improper conduct on B&B' s part. Certainly, there was no basis for the Fourth Department to conclude on this summary judgment motion - where B&B must be afforded the benefit of every evidentiary inference and where, as noted, the evidentiary record is incomplete - that B&B acted in bad faith as a matter of law. 7 In sum, the Fourth Department's ruling barring partial enforcement as a matter of law is erroneous irrespective of whether Florida law or New York law is applied and should unquestionably be reversed by this Court. QUESTIONS PRESENTED Question One: Did the Fourth Department err in ruling that the Employment Agreement's reasonable choice-of-law clause designating Florida as the applicable law should be nullified in favor of New York law as to all issues in controversy between the parties based on its finding that two statutory provisions of Florida law are truly obnoxious to some fundamental New York public policy? Answer: Yes. Question Two: Did the Fourth Department err in holding that under New York law, partial enforcement of the Employment Agreement's non-solicitation covenant, such that the covenant would cover only those customers with whom Johnson had dealt while a B&B employee, was precluded as a matter of law based on that court's fact-based determination that B&B entered into the agreement in bad faith, despite the fact that the parties had conducted only limited discovery? Answer: Yes. 8 STATEMENT OF JURISDICTION The Court of Appeals has jurisdiction to entertain this appeal and review the questions raised pursuant to CPLR 5602 and the May 2, 2014 Order of the Appellate Division, Fourth Department, which (i) granted plaintiffs' motion for leave to appeal to the Court of Appeals, certifying the question "Were the Orders of this Court entered February 7, 2014 properly made?" and (ii) denied defendants' cross-motion for leave to appeal to the Court of Appeals. PRESERVATION OF QUESTIONS FOR REVIEW 1. In papers submitted to the Supreme Court, Erie County, in connection with defendants' motion for summary judgment, the parties addressed the enforceability of the Florida choice-of-law clause contained in the Employment Agreement, including the issue of whether public policy concerns precluded application of Florida law in New York. Addendum to Brief of Plaintiffs- Appellants ("ADD") at 8-11, 36-44, 63-67. In the August 27, 2012 Order of the Supreme Court, Erie County, ruling on defendants' motion for summary judgment (the "Supreme Court Order"), the Supreme Court addressed the parties' respective arguments regarding enforcement of the Florida choice-of-law clause contained in the Employment Agreement, ruling that the clause was unenforceable due to insufficient contacts of the parties and transactions with the state of Florida. Record on Appeal ("R. ") at 20-23. 9 In appellate briefs submitted to the Fourth Department, the parties again addressed the issue of the enforceability of the parties' choice of Florida law, including whether New York public policy precluded application of Florida law in New York. ADD at 210-223, 261-93. The Fourth Department's February 7, 2014 Order reversed the Supreme Court's determination that the parties and transaction had insufficient connection with Florida for the choice-of-law clause to be enforceable and ruled that the Employment Agreement's choice of Florida law was reasonable. Order at 2-3. However, the Fourth Department ruled that Florida law could nonetheless not be applied to any issue because portions of the Florida statute governing restrictive covenants were repugnant to New York public policy. ld. at 3-5. 2. In papers submitted to the Supreme Court, Erie County, in connection with defendants' motion for summary judgment, the parties addressed, inter alia, the issue of whether the non-solicitation covenant and other restrictive covenants contained in the Employment Agreement were enforceable under New York authority, including BDO Seidman v. Hirshberg. ADD at 11-24,45-56,67-76. The Supreme Court Order addressed and ruled on, inter alia, the application of BDO Seidman to the enforcement of restrictive covenants contained in the Employment Agreement, R. at 27-36, including a specific ruling that the non- solicitation covenant, while overbroad, could be enforced to the extent evidence 10 showed that Johnson's solicitation of customers on Lawley's behalf traded on or used relationships she developed while working at B&B, R. at 32-35. In appellate briefs submitted to the Fourth Department, the parties again addressed the issue of the enforceability of the non-solicitation covenant and other restrictive covenants under BDO Seidman and other New York authority, including whether partial enforcement was warranted. ADD at 120-23, 155-77. The Fourth Department's Order subsequently ruled on the application of BDO Seidman to the enforcement of restrictive covenants contained in the Employment Agreement, holding, inter alia, that BDO Seidman barred both enforcement and partial enforcement of the agreement's non-solicitation provision. Order at 6-7. STATEMENT OF FACTS A. B&B's Insurance Intermediary Business. BBI and BBNY are insurance intermediaries. R. at 264. They serve as brokers between insurers who write policies and issue coverage, including coverage for employee benefits, and customers purchasing insurance. /d. In addition, they analyze customers' insurance needs and assist in negotiations concerning insurance policies and coverage, premiums to be paid, and rate renewals. /d. BBI, which operates through subsidiaries across the country, has its principal office in Florida. R. at 265. BBNY is one such subsidiary, and it carries out BBI's operations in western New York, including in Erie County. /d. 11 B. Johnson's Employment with B&B. B&B hired Johnson on December 1, 2006. R. at 265. At the time of Johnson's hiring, health insurers in Buffalo were moving from community-rated premiums, whereby an employer's premiums are calculated based on the geographic region where they are located, to experience-rated premiums, whereby premiums are calculated by estimating the employer's future claims based on the past experience and utilization of coverage by the specific employer or group. !d. Before joining B&B, Johnson had worked as an underwriter at BlueCross/BlueShield ("BCBS") in Buffalo, where she had analyzed utilization data and calculated experience rates. !d. B&B hired Johnson to provide actuarial analysis of its clients' utilization and experience data so that B&B could use this analysis in negotiating more competitive rates for its customers. !d. B&B was the first insurance intermediary in the locality to employ an underwriter to provide this type of analysis, which gave it a competitive advantage in the marketplace. !d. Johnson was hired pursuant to a written Employment Agreement, which, among other things, provided for a salary of $175,000 per annum. R. at 265, 284- 89. The Employment Agreement contained certain covenants, including non- solicitation, non-inducement, and confidentiality covenants. R. at 285-87. The non-solicitation covenant provided as follows: 12 R. at 286. For a period of two (2) years following termination of employment hereunder (whether voluntary or involuntary), Employee specifically agrees not to solicit, divert, accept, nor service, directly or indirectly, as insurance solicitor, insurance agent, insurance broker, insurance wholesaler, managing general agent, or otherwise, for the Employee's account or the account of any other agent, broker, insurer or other entity, any insurance or bond business of any kind or character from any person, firm, corporation, or other entity that is a customer or account of the New York offices of the Company during the term of this Agreement, or from any prospective customer or account to whom the Company made proposals about which Employee had particular knowledge, or in which Employee participated, during the last six months of Employee's employment with Company. For purposes of this Agreement, Employee acknowledges that informing existing clients or prospects that Employee is or may be leaving Company prior to leaving employment of Company shall be deemed to constitute prohibited solicitation under this Agreement absent the Company's written consent. When B&B hired Johnson, Cynthia Smith ("Smith"), Accounting Operations Leader in B&B's Buffalo office, presented Johnson with a copy of the Employment Agreement, along with certain other materials regarding her employment. R. at 279. Smith expressly advised Johnson that she should review the Employment Agreement before signing it to be sure that she understood its terms. !d. Smith made clear to Johnson that she was available to answer any questions Johnson had about the Employment Agreement or the terms therein. !d. Smith specifically brought the non-solicitation covenant to Johnson's attention and 13 reminded her that pursuant to these provisions, she was agreeing to certain restrictions which would extend for the limited period of two years after leaving B&B' s employ. R. at 266, 280. Johnson did not ask any questions or request any modifications to the Employment Agreement before executing it and returning it to Smith. R. at 280. Nor did Johnson request any additional time for her or her attorney to review the Employment Agreement- despite B&B, as a matter of course, making additional time available for newly hired employees to review their employment agreements with their attorneys, an opportunity which other new employees took advantage of. !d. B&B invested considerable time and resources in Johnson's training, education, and licensure. R. at 268. When B&B hired her, Johnson had no experience working for an insurance broker in any capacity, no training for such a job, and no license to serve as a broker. !d. Among its other efforts on Johnson's behalf, in February 2007, B&B paid Johnson's tuition for a week-long, pre-broker licensing course and allowed her to take time off from work, with pay, to attend the course. Id.; see also R. at 304-05. B&B also paid for Johnson to take her licensing exam and obtain her Life, Accident & Health insurance broker license. R. at 268. Further, when Johnson traveled with her husband to Florida for B&B 's annual 14 meeting in March 2007, B&B paid all of their expenses, which enabled Johnson to attend training sessions and meetings, as well as meet her B&B colleagues. /d. B&B also educated and trained Johnson on the insurance brokerage industry in general and specifically on the data systems that health insurance carriers other than her former employer used and on the use of B&B 's software and computer programs. R. at 268-69. B&B continued to invest in Johnson's education and training long after she became licensed. R. at 269. For example, during the last twelve months of her employment alone, B&B facilitated Johnson's participation in a number of seminars, including Brown & Brown National Healthcare Reform Update (March 23, 2010), Allstate Voluntary Products (April15, 2010), Employer Compliance (June 7, 2010), Delta Dental-lunch and learn (August 18, 2010), Principle Life- Under 50 Ancillary & Automated Benefits Platform (September 14, 2010), Independent Health Fall Broker Meeting (September 23, 2010), and Univera Broker Open Enrollment Training (September 28, 201 0). /d. C. B&B Introduced Johnson to Its Actual and Prospective Customers and Enabled Her to Develop Relationships and Goodwill with Them at B&B's Expense. The insurance brokerage business is based on relationships. R. at 272. Johnson, who, as noted, had never worked as an insurance broker prior to her employment with B&B, had no customers or prospective customers for any 15 brokerage services at the time she joined B&B. R. at 271. Throughout the course of her employment, B&B introduced Johnson to various customers and prospective customers, enabling her to develop relationships with them. R. at 272. In this fashion, Johnson regularly had opportunities to meet with, learn about, and cultivate relationships with customers and prospective customers- customers with whom, but for B&B, she would have had no contact. Id. In addition to facilitating Johnson's introduction to and relationships with these customers and potential customers, B&B compensated Johnson for all the time she spent meeting with them and paid for all of her expenses in connection with such meetings. /d. In addition to introducing Johnson to key customers and enabling her to develop relationships with them, B&B also entrusted Johnson with confidential customer information, including the following: 1. Data concerning customers' premium costs, including commissions paid; 2. Renewal dates for particular policies of specific customers; and 3. Customers' experience and utilization data, including data concerning claims made, utilization of coverage and benefits, and specific risk characteristics. R. at 269. None of this customer information is publicly available, readily ascertainable, or easily duplicated. Id. Johnson's access to this data permitted her to further cultivate relationships with B&B clients. R. at 270. 16 The precondition to B&B' s willingness to introduce Johnson to key customers, facilitate her development of relationships with them, and provide her with confidential information concerning such customers was Johnson's agreement to the non-solicitation covenant contained in the Employment Agreement. R. at 271-72. This provision protected B&B against Johnson's improper use of these customer relationships. D. The Decline in Johnson's Job Performance. B&B was pleased with Johnson's job performance for the first three years of her employment through 2009. R. at 273. However, over the course of 2010, her performance deteriorated significantly, and B&B was ultimately forced to terminate her employment. R. at 273-7 5. E. Johnson's Solicitation of B&B Clients. Within a month of her termination in February 2011, Johnson joined Lawley, a direct competitor ofB&B operating in the same Buffalo area. R. at 275. Upon joining Lawley, Johnson began soliciting B&B customers with whom she had previously dealt on B&B' s behalf, using B&B 's confidential information and exploiting the relationships and goodwill that she had developed with B&B' s customers at B&B's expense. /d. In this fashion, Johnson indisputably solicited and diverted numerous customers and prospective customers to Lawley. R. at 275- 76. 17 Johnson's improper solicitation of these B&B customers is evidenced by, among other things, emails which customers mistakenly sent to her former B&B email account and which confirm that Johnson had solicited these customers on Lawley's behalf and that she had used B&B's confidential information in so doing. R. at 276; see 311-18. In addition, in late July 2010, around the time ofB&B's initial discussions concerning Johnson's unacceptable behavior and job performance, Johnson emailed to her home computer a detailed analysis of the experience and utilization data for National Fuel, one ofB&B's customers. R. at 276, 319. The information Johnson took is precisely the type that B&B keeps confidential and which provides it with a competitive advantage. R. at 276. Johnson ultimately diverted National Fuel's business away from B&B via improper solicitation. R. at 276-77. Johnson has not denied soliciting the customers she worked with while in B&B's employ and diverting their business to Lawley. R. at 276. Johnson would also have been unable to solicit these customers on Lawley's behalf but for her employment with B&B, her access to its confidential information, and her steady contact with its customers and accounts, all of which were subsidized by B&B. R. at 277. Indeed, in a February 2, 2011 email to her supervisor attempting to rebut the fact that she had not been a "team player" and had not been "performing [her] job responsibilities," Johnson outlined the prospect meetings, conference calls, and 18 client meetings in which she had participated during 2010 in the course of her employment with B&B. R. at 277; see 154-156. As Johnson's email illustrates, many of the customers that she solicited and diverted from B&B to Lawley were the very customers with whom she had recently worked at B&B. Id. THE PROCEEDINGS BELOW A. Pleadings. B&B commenced this action by Summons and Complaint filed September 29, 2011. R. at 49-76. In their Complaint, B&B asserted four causes of action, as follows: first, as against Johnson, for breach of the Employment Agreement, including breaches of the non-solicitation, confidentiality, and non-inducement covenants; second, as against Johnson, for misappropriation of confidential, proprietary, and trade secret information; third, as against Johnson and Lawley, for tortious interference with B&B' s prospective advantage and business relations with the customers at issue; and fourth, as against Lawley, for tortious interference with the Employment Agreement between Johnson and B&B. R. at 57-69. Thereafter, defendants answered and asserted certain counterclaims. R. at 77-96. B&B subsequently moved to dismiss the counterclaims, at which point defendants served amended answers, purporting to correct deficiencies in their counterclaims. R. at 97-120. Plaintiffs withdrew their motion to dismiss and answered the counterclaims, denying liability. R. at 121-27. 19 B. Defendants' Summary Judgment Motion. On November 30, 2011, before the parties had an opportunity to conduct any significant discovery, defendants moved for summary judgment. R. at 129-30. In their motion, defendants argued that the Employment Agreement's Florida choice- of-law clause was unenforceable- both on the basis of a supposed lack of contacts with Florida and on public policy grounds. Defendants also argued that B&B was barred from enforcing the restrictive covenants in the Employment Agreement because Johnson was supposedly terminated without cause, there was no basis for plaintiffs' tortious interference claims, and Johnson had not misappropriated confidential data. R. at 141, 256. Defendants further sought dismissal of all claims for breach of restrictive covenants, including the non-solicitation covenant. ADD at 21-24. B&B opposed the motion by, inter alia, submitting factual evidence contravening the arguments defendants raised concerning the Florida choice-of- law provision, the circumstances of Johnson's termination, and the protectability of confidential information improperly taken by Johnson. R. at 258-358. C. The Trial Court's Decision and Order. By Order dated August 27, 2012, the trial court granted in part and denied in part defendants' motion for summary judgment. R. at 12-37. In particular, the trial court held the parties' Florida choice-of-law clause to be unenforceable. R. at 20 20-26. In addition, the trial court granted dismissal of B&B's first cause of action insofar as it related to Johnson's breach of the confidentiality covenant, but not as to the non-solicitation covenant. R. at 30-35. The trial court dismissed the second and third causes of action for misappropriation and tortious interference with prospective advantage/business relations respectively, R. at 32, 36, but held that questions of fact precluded dismissal of the fourth cause of action against Lawley for tortious interference, R. at 36 The trial court rejected defendants' argument that the Employment Agreement was unenforceable because of the circumstances of Johnson's termination. R. at 29. Finally, the trial court ruled that while the non-solicitation covenant was overbroad, it would deny defendants summary judgment on B&B' s claims for breach of the non-solicitation covenant because defendants had not established a prima facie case that Johnson, in soliciting customers on Lawley's behalf, did not trade on or use client relationships she had developed while working at B&B. R. at 35. B&B thereafter filed a motion to reargue, pursuant to CPLR 2221(d), seeking reinstatement of that portion of plaintiffs' first cause of action alleging that Johnson breached the non-inducement covenant. R. at 549. The trial court granted B&B's motion for reargument and thereafter ruled that the cause of action for breach of the non-inducement covenant should be reinstated because the court 21 "overlooked the fact that defendants had failed to submit any evidence in their moving papers to support their claims that Ms. Johnson did not violate the [non- inducement] covenant." R. at 41, 46. D. The Fourth Department Appeal. Defendants appealed from the trial court's August 27, 2012 Order to the extent it had denied defendants' motion. R. at 6. Defendants also appealed from the trial court's ruling reinstating B&B' s cause of action for breach of the non- inducement clause. R. at 39. B&B cross-appealed from those portions of the trial court's August 27, 2012 Order which ruled against applying Florida law and granted defendants partial summary judgment on B&B' s claim for breach of the confidentiality covenant, for misappropriation of trade secrets, and for interference with prospective advantage/business relations. R. at 9. E. The Fourth Department's Order. The Fourth Department issued its Order and Opinion on February 7, 2014. The Fourth Department rejected defendants' argument that the restrictive covenants were unenforceable because Johnson was allegedly terminated without cause, Order at 5, and reversed the trial court's order granting defendants summary judgment on B&B' s claims for breach of the confidentiality covenant, for misappropriation of trade secrets, and for tortious interference with prospective and existing business relationships, Order at 7-8. The Fourth Department also upheld 22 the trial court's ruling reinstating B&B's claim for breach of the non-inducement covenant. Order at 8. These portions of the Order are not the subject of this appeal. The portions of the Order before the Court on this appeal - and which B&B respectfully contends are reversible error- include the Fourth Department's ruling that the non-solicitation covenant was impermissibly overbroad as written and that partial enforcement of the covenant was precluded as a matter of law because of what it considered evidence of B&B 's bad faith and coercive conduct. Order at 6- 7. In addition, the Fourth Department made two rulings applicable to the Order as a whole which B&B now appeals to the extent they apply to the issue of the availability of partial enforcement: (1) the Employment Agreement's Florida choice-of-law clause should not be honored on public policy grounds, Order at 3-4 and (2) summary judgment was not premature insofar as plaintiffs had not demonstrated the need for further discovery, Order at 2. DISCUSSION POINT I THE AVAILABILITY OF PARTIAL ENFORCEMENT SHOULD BE DETERMINED UNDER FLORIDA LAW The Fourth Department's sweeping ruling invalidating the Employment Agreement's choice-of-law clause for all purposes on public policy grounds - 23 notwithstanding its express finding that the selection of Florida law was otherwise reasonable - was erroneous. Looking at Florida law, particularly as it applies to the availability of partial enforcement of the non-solicitation covenant - the sole issue before the Court - it is clear that there are no public policy concerns which preclude applying Florida law to determine this issue. Moreover, even considering the statutory provisions which the Fourth Department cited as the basis for its ruling - provisions which are entirely unrelated to the issue of partial enforcement - it is clear that no aspect of these laws are "truly obnoxious" to a fundamental New York public policy so as to warrant judicial nullification of the parties' otherwise reasonable choice of Florida law. A. Under New York Law, the Public Policy Exception to Honoring Otherwise Reasonable Choice of Law Is Narrowly Applied. The public policy exception to enforcing reasonable choice-of-law agreements should be used sparingly. As the Court of Appeals cautioned in Dym v. Gordon: Public policy, per se, plays no part in a choice of law problem. [citations omitted] Moreover, as stated in Loucks v. Standard Oil Co. (supra), "The courts are not free to refuse to enforce a foreign right at the pleasure of the judges, to suit the individual notion of expediency or fairness. They do not close their doors unless help would violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal." 24 16 N.Y.2d at 128. Consistent with the above, the bar for invoking the public policy exception to enforcement of a choice-of-law clause is extraordinarily high. It is only where application of the foreign law's jurisdiction would be "truly obnoxious" to a fundamental New York policy that the public policy exception comes into play, Welsbach, 7 N.Y.3d at 629, as the court below recognized, Order at 3. By contrast, a mere difference in emphasis or factors to consider in making a ruling does not by itself give rise to a public policy exception. Dym, 16 N.Y.2d at 127-28. Were the law otherwise, choice-of-law clauses would be rendered "meaningless," as "[c]ourts invariably would be forced to prefer New York law over conflicting foreign law on public policy grounds." Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 79 (1997). Unsurprisingly, there are very few public policies in New York that are so truly "fundamental" to the state's legal fabric so as to trigger a public policy exception to enforcing a choice-of-law clause. Welsbach, 7 N.Y.3d at 630. See, e.g., Scheiber v. St. John's Univ., 84 N.Y.2d 120, 125 (1994) ("Human Rights Law ... effects this State's fundamental public policy against discrimination by establishing equality of opportunity as a civil right."); Sanders v. Winship, 57 N.Y.2d 391, 395 (1982) (legislation outlawing discrimination in the sale of cooperative real estate interests is a "fundamental State policy"). 25 Notably, the mere fact that the employment law of the parties' chosen jurisdiction affords less protection to an employee than New York law is not sufficient to invalidate full enforcement of a parties' reasonable choice-of-law clause on public policy grounds. See, e.g., Boss v. Am. Exp. Fin. Advisors, Inc., 15 A.D.3d 306, 308 (1st Dep't 2005) (fact that Minnesota law is less protective of employees' interests than New York law does not give rise to public policy concerns sufficient to invalidate Minnesota choice-of-law clause), affd., 6 N.Y.3d 242 (2006). Indeed, and unsurprisingly, B&B is unaware of a single decision where the New York courts have held that some aspect of Florida restrictive covenant law (or the restrictive covenant law of any other jurisdiction) raises sufficient public policy concerns to vitiate a reasonable choice-of-law clause. Moreover, even in those rare cases where some aspect of the chosen jurisdiction's law arguably poses a potential public policy concern, this by itself does not in any sense justify a sweeping, preemptive invalidation of the chosen jurisdiction's law for all purposes. The law on this point is quite clear. The enforcement of reasonable choice-of-law provisions is strongly favored, as the Fourth Department recognized. Order at 3; see, e.g., Koob v. IDS Fin. Servs., Inc., 213 A.D.2d 26, 33 (1st Dep't 1995) ("It is the policy of the courts of this State to enforce contractual provisions for choice of law and selection of a forum for litigation."). Accordingly, the chosen jurisdiction's law should be fully applied 26 except as to the specific issues where application of a portion of the chosen jurisdiction's law would be genuinely obnoxious to a fundamental New York policy. As to all other issues, the chosen jurisdiction's law should fully apply. See, e.g., Hugh O'Kane Elec. Co., LLC v. MasTec N. Am., Inc., 19 A.D.3d 126, 127 (1st Dep't 2005) (where the choice-of-law analysis leads to the application of foreign law, a court may only refuse to apply that law if its application would violate public policy, "some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal," and would be "truly obnoxious") (emphasis added) (citations omitted) (internal quotation marks omitted); Schultz v. Boy Scouts of Am., 65 N.Y.2d 189, 202 (1985) ("The public policy doctrine is an exception to implementing an otherwise applicable choice of law in which the forum refuses to apply a portion of foreign law because it is contrary or repugnant to its State's own public policy.") (emphasis added). See also Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34, 40 (1961) (sustaining plaintiffs cause of action under Massachusetts wrongful death statute, but "refus [ing] on public policy ground to enforce one of its provisions" limiting damages); see generally Restatement (Second) of Conflict of Laws§ 187, Comment g (public policy may supersede law of chosen jurisdiction when applying law of chosen jurisdiction to "particular issue" contravenes fundamental public policy) (emphasis added). 27 B. Florida Law Governing Partial Enforcement of Restrictive Covenants Raises No Policy Concerns Under New York Law and Should Be Applied Here. Applying the well-settled principles of jurisprudence discussed above, it is clear that Florida law should be used to determine the issue of partial enforcement now before this Court, consistent with the parties' intent. In nullifying the parties' choice of Florida law, the Fourth Department cited two statutory provisions which it held were contrary to New York's policy of disfavoring restrictive covenants and protecting employees from undue hardship. Order at 3-4. First, the Fourth Department cited Fla. Stat. § 542.335(1)(g)(l) which provides that "[i]n determining the enforceability of a restrictive covenant, a court ... [s]hall not consider any individualized economic or other hardship that might be caused to the person against whom enforcement is sought." Second, the Fourth Department cited Fla. Stat.§ 542.335(l)(h), which provides that in evaluating the enforceability of restrictive covenants, the court "shall not employ any rule of contract construction that requires the court to construe a restrictive covenant narrowly, against the restraint, or against the drafter of the contract." Order at 4. However, in finding that these two specific statutory provisions were contrary to New York public policy, the Fourth Department sweepingly invalidated application of all aspects of Florida law, making no attempt to analyze how 28 application of the cited statutory provisions would give rise to a result contrary to a fundamental New York public policy. This was clearly erroneous. Indeed, even assuming, arguendo, that the cited statutory provisions were somehow contrary to a fundamental New York public policy (and, as further discussed below, this is not the case), this would in no way justify not applying Florida law to the specific issue of partial enforcement now before the Court. On the contrary, the two statutory provisions do not in any way pertain to the issue of partial enforcement, and the purported public policy concerns with the Florida statute which the Fourth Department identified therefore have no application to this particular issue. Looking specifically at Florida law governing the availability of partial enforcement, as the Fourth Department should have done, it quickly becomes clear that there are no public policy impediments to determining this issue under Florida law. Far from posing a threat to public policy, Florida's law is fully aligned with New York law from a policy perspective. Both jurisdictions permit partial enforcement as a means of ensuring that a covenant protects an employer's legitimate business interests, and in both jurisdictions, partial enforcement is routinely applied by the courts. The differences between New York and Florida law concerning partial enforcement merely reflect differences in the circumstances under which partial 29 enforcement is allowed. Thus, under Florida law, "[i]f a contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest or interests, a court shall modify the restraint and grant only the relief reasonably necessary to protect such interest or interests." Fla. Stat.§ 542.335(1)(c). New York law, of course, also permits partial enforcement, except that it also considers the employer's conduct in entering into the covenants at issue before determining whether partial enforcement is warranted. BDO Seidman, 93 N.Y.2d at 394. Thus, while it is fair to say that under Florida law, the partial enforcement mechanism is more immediately available (given that a factual inquiry is not needed), this is a distinction in evidentiary requirements rather than a core policy difference. Cf Welsbach, 7 N.Y.3d at 632 (noting New York policy to protect against "oppressive use of bargaining power" in evaluating enforceability of pay- if-paid contracts but nevertheless allowing application of conflicting Florida law); Hylan Elec. Contracting, Inc. v. Mastec N. Am., Inc., No. 10052/02, slip op. at 3 (N.Y. Sup. Ct. Richmond Cty. Aug. 12, 2010) (despite New York law protecting contractors, applying pay-if-paid provision of contract governed by Florida law was "not of such an egregious nature as to necessitate the voiding of the parties choice of law"). Certainly, applying Florida law to the partial enforcement issue 30 could not remotely be characterized as "truly obnoxious" to a fundamental New York public policy. Moreover, even if the Court does choose to consider the purported public policy concerns the Fourth Department raised with respect to the Florida statute - and there is no reason to do so, given that these statutory provisions have no bearing on the issue of partial enforcement - it is clear that there was no basis for the Fourth Department's ruling that Florida law is "truly obnoxious" to New York public policy. In fact, while the portions of the Florida statute cited by the Fourth Department reflect a difference in emphasis of factors considered by Florida and New York courts, they do not evidence a fundamental policy distinction between the jurisdictions. That Florida's law is not fundamentally repugnant to New York policy is best illustrated by reviewing what the two jurisdictions have in common. Perhaps most critically, Florida law, like New York law, requires restrictive covenants to be "supported by a legitimate business interest." Fla. Stat. § 542.335(l)(b). Indeed, Florida law mandates that "[a]ny restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable." /d. Moreover, the Florida statute requires that a person seeking to enforce a restrictive covenant "plead and prove that the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction." 31 Fla. Stat.§ 542.335(1)(c). See also John A. Grant, Jr. & Thomas T. Steele, Restrictive Covenants: Florida Returns to the Original "Unfair Competition" Approach for the 21st Century, Fla. B.J., Nov. 1996, at 55 ("The express adoption of the 'reasonably necessary' test for relief ensures that relief must fit the interest or interests established."). As applied by the Florida courts, the "legitimate business requirement" has been consistently enforced. Indeed, Florida courts do not hesitate to limit or void restrictive covenants which exceed what could reasonably be construed as the employer's legitimate business interests. See, e.g., Colucci v. Kar Kare Auto. Grp., Inc., 918 So. 2d 431, 440 (Fla. Dist. Ct. App. 4th Dist. 2006) ("[W]e cannot uphold an agreement whose sole purpose is to prevent competition per se; such agreements are void as a matter of public policy."). Nor do Florida courts disregard restrictions on an employee's ability to secure a livelihood. In fact, the reverse is true. In case after case, Florida courts have shown a willingness to curb employer attempts to unnecessarily hinder a former employee from competing in the market. See, e.g., Austin v. Mid State Fire Equip. of Cent. Florida, Inc., 727 So. 2d 1097, 1098 (Fla. Dist. Ct. App. 5th Dist. 1999) (finding that while an injunction prohibiting employee from divulging price information or approaching employer's customers was warranted, such injunction was overbroad insofar as it tried to prohibit employee from working for employer's 32 competitors); GPS Indus., LLC v. Lewis, 691 F. Supp. 2d 1327, 1336 (M.D. Fla. 201 0) (refusing to grant employer preliminary injunction to enforce restrictive covenants containing temporal limitation but no geographic limitation and finding such "refusal serves the public interest by disallowing unreasonable restrictive covenants to unfairly restrain trade"); PartyLite Gifts, Inc. v. MacMillan, 895 F. Supp. 2d 1213, 1227 (M.D. Fla. 2012) (holding non-solicit covenant without temporal limitation to be presumptively unreasonable under Florida statute). In sum, Florida, like New York, restricts an employer's ability to engage in anticompetitive conduct, and this in tum provides a critical protection to the former employee - insofar as it places clear limits on an employer's ability to restrict the former employee from competing in the market. See, e.g., Edwards v. Harris, 964 So. 2d 196, 197 (Fla. Dist. Ct. App. 1st Dist. 2007) ("restrictive covenant may be unreasonable when it inflicts an unduly harsh or unnecessary result upon the employee"); Exch. Int'l, Inc. v. Vacation Ownership Relief LLC, , No. 6: 10-cv- 1273-0rl-35DAB, 2010 WL 4983669, at *8 (M.D. Fla. Oct. 27, 2010) (citing Edwards). In light of the above Florida jurisprudence, it is respectfully submitted that there is no basis for characterizing Florida law as "truly obnoxious" to New York policy. 33 C. The Fourth Department's Ruling Precluding Partial Enforcement as a Matter of Law Is Reversible Error Under Florida Law. Applying Florida law to the issue of partially enforcing the non-solicitation covenant, it is clear that the Fourth Department's ruling barring partial enforcement as a matter of law is unsustainable. As noted, Florida statutory law specifically provides that a court shall modify a facially overbroad restrictive covenant such that its scope extends only to protection of the employer's legitimate business interests. Fla. Stat.§ 542.335(1). Florida law requires no evidentiary showing as to the employer's conduct. Rather, the salient inquiry for the court considering partial enforcement is to determine whether the covenant at issue, as modified, protects a legitimate business interest. See, e.g., Austin, 727 So. 2d at 1098 (blue-penciling covenant so that it protects only legitimate business interests of employer and does not unreasonably restrict competition). Applying Florida law to partial enforcement of the non-solicitation covenant here, it is clear that there are no grounds for the Fourth Department's barring partial enforcement as a matter of law, given that a factual inquiry into B&B's conduct is not necessary. It is likewise clear that B&B readily satisfies the standard under Florida law for permitting partial enforcement, insofar as the non- solicitation clause as modified would protect B&B' s legitimate business interest in preventing Johnson from soliciting the customers with whom she actively dealt 34 while a B&B employee. N. Am. Products Corp., 196 F. Supp. 2d at 1228 ("There is little question under Florida law that an employer has a legitimate business interest in prohibiting solicitation of its customers with whom the employee has a substantial relationship."). In fact, it is respectfully submitted that under Florida law, B&B is not merely entitled to a reversal of the Fourth Department's ruling barring partial enforcement as a matter of law. It is also entitled to a ruling that partial enforcement of the non-solicitation covenant is warranted, so that the covenant applies only to those clients with whom Johnson had contact while a B&B employee. See, e.g., Flickenger v. R.J. Fitzgerald & Co., Inc., 732 So. 2d 33, 34- 35 (Fla. Dist. Ct. App. 2d Dist. 1999) (direction by District Court of Appeals that overbroad covenant be modified so as to render it enforceable under Florida law). There is no obstacle to such a ruling, given that a factual inquiry as to B&B' s conduct is not required and that blue-penciling the covenant so that it applies only to customers Johnson dealt with while a B&B employee would be protective of a legitimate business interest under Florida law (and also New York law). Such a ruling would ensure that B&B 's interests are appropriately protected without unreasonably hindering Johnson's ability to compete in the market, consistent with the approach of both Florida and New York courts. 35 POINT II THE FOURTH DEPARTMENT'S RULING PRECLUDING PARTIAL ENFORCEMENT AS A MATTER OF LAW IS REVERSffiLE ERROR UNDER NEW YORK LAW As set forth above, the Fourth Department's ruling barring partial enforcement of the non-solicitation covenant as a matter of law is directly contrary to Florida law, which is the law under which this issue should be determined, consistent with the parties' intent as reflected in the Employment Agreement's choice-of-law clause. However, it is equally clear that even analyzing the availability of partial enforcement under New York law, the Fourth Department's holding is reversible error. Indeed, in barring even the possibility of partial enforcement as a matter of law, the Fourth Department misapplied controlling New York precedent, misconstrued the factual record- a record which, given the absence of meaningful discovery, is necessarily limited and insufficient - and improperly failed to construe evidentiary inferences in favor of B&B as the non-movant. A. Partial Enforcement of Restrictive Covenants Under New York Law. New York courts have long been willing to blue-pencil the language of an otherwise reasonable non-solicitation covenant or other restriction on post- employment activity in order to render the provision fully enforceable. Karpinski v. Ingrasci, 28 N.Y.2d 45 (1971) (holding that court may sever permissible from 36 the impermissible and then uphold covenant to the extent it is reasonable); see generally NY PJI 4:1, Comment ("Where a non-compete provision is overbroad in that it is more restrictive than is necessary to protect the employer's legitimate interests, the court may grant partial enforcement[.]"). This reflects New York's now well-settled adoption of the "prevailing, modem view" which "rejects a per se rule that invalidates entirely any overbroad employee agreement not to compete." BDO Seidman, 93 N.Y.2d at 394. Consistent with the Court of Appeal's adoption of the modem view, partial enforcement of restrictive covenants is permissible - and indeed warranted - where the employer has acted in good faith to protect a legitimate business interest. See Spinal Dimensions, Inc. v. Chepenuk, No. 4805- 07,2007 WL 2296503 (N.Y. Sup. Ct. Albany Cty. Aug. 9, 2007). See generally Ashland Management, 59 A.D.3d 97 (modifying restrictive covenant to render it enforceable where evidence showed employer sought covenant to protect legitimate business interests); Weiser LLP v. Coopersmith, 74 A.D.3d 465 (1st Dep't 2010) (appropriate to modify overly broad restrictive covenant to render it enforceable); Malcolm Pirnie, Inc. v. Werthman, 280 A.D.2d 934, 935 (4th Dep't 2001) (overbroad restrictive covenants are partially enforceable "to the extent necessary to protect [the employer's] legitimate business interests"). 37 The availability of partial enforcement under New York law does not depend upon any one factor but rather must be determined through a fact-intensive, case- specific analysis, as the BDO Seidman court expressly held. 93 N.Y.2d at 390. Generally, partial enforcement is refused where it is decisively clear that the employer has engaged in coercive overreaching in order to achieve an anticompetitive purpose. /d. This, for example, was the situation in Scott, Stackrow & Co. v. Skavina, 9 A.D.3d 805 (3d Dep't 2004), a case relied upon but fundamentally misconstrued by the court below. In Scott, the employer did not even attempt to argue that it had not engaged in anticompetitive misconduct and effectively conceded this point. Rather, the employer simply demanded partial enforcement as a supposed matter of right "because the restrictive covenant can be partially enforced, [and] it should be." /d. at 807. Given the employer's failure to even attempt to show an absence of bad faith, the Third Department ruled that partial enforcement was not available. /d. By contrast, there is no basis to summarily deny partial enforcement where the record before the court shows that an employer has sought a post-termination restriction in good faith in order to protect a genuine business interest. Ashland Management, 59 A.D.3d at 106-07. 38 B. Partial Enforcement Is Warranted Here. Based on the above jurisprudence, the non-solicitation covenant at issue here is very well-suited to the mechanism of partial enforcement. This was recognized by the trial court when it ruled that although the non-solicitation covenant was overbroad, defendants should nonetheless be denied summary judgment on plaintiffs' claim for breach of non-solicitation covenant because defendants had not established a prima facie case that in soliciting customers on Lawley's behalf, Johnson did not "trade on or use relationships "developed while she was a B&B employee. R. at 34-35. Thus, under the trial court's ruling, the non-solicitation covenant could be fully enforced to the extent it covered customer solicitation by Johnson in which she traded on or used customer relationships she developed while she was a B&B employee. The trial court's ruling in this regard is well-grounded. In seeking partial enforcement, B&B is not pursuing an anticompetitive purpose or acting in bad faith but rather merely seeking to protect its legitimate business interests in preventing Johnson from soliciting key B&B clients with whom Johnson closely worked during her B&B employment. Notably, B&B invested substantial time, effort, and resources in the development of client goodwill - including the goodwill of the clients with whom Johnson dealt while in B&B's employ and whom she is now improperly soliciting. Simply put, it was B&B which enabled 39 Johnson to cultivate relationships with these clients. It is B&B 's interest in these clients and Johnson's bad faith solicitation of them in collusion with Lawley that supports the use of the partial enforcement mechanism in the context of this case. Importantly, partial enforcement of the non-solicitation covenant would involve nothing more than a limited blue-penciling of the provision's language so that Johnson is barred from soliciting only those clients with whom Johnson dealt directly. BDO Seidman, 93 N.Y.2d at 393. Such a narrowly tailored and reasonable restriction on Johnson's post-employment conduct would impose no meaningful hardship on Johnson's ability to earn a living, would be narrowly protective of B&B' s legitimate business interests, and would be fully consistent with BDO Seidman and its progeny. See, e.g., Trans-Continental Credit & Collection Corp v. Foti, 270 A.D.2d 250 (2nd Dep't 2000) ("[A]ny unenforceable provisions of the agreement are severable from the confidentiality provision and may be partially enforced to the extent necessary to protect the legitimate interests of [the employer]."). In sum, consistent with the trial court's ruling and contrary to the Fourth Department's ruling, the non-solicitation provision is precisely the type of covenant for which partial enforcement is fully warranted. 40 C. There Is No Basis Under New York Law for the Fourth Department's Ruling Barring Partial Enforcement of the Non- Solicitation Covenant. In rejecting even the possibility of partial enforcement of the non-solicitation covenant, the Fourth Department held that supposed evidence of B&B' s bad faith conduct and coercive overreaching precluded partial enforcement as a matter of law. The Fourth Department pointed to just three instances of supposed bad faith conduct: first, that Johnson was presented with the Employment Agreement on her first day of employment; second, that the non-solicitation covenant was not tailored to the holding in BDO Seidman; and third, the presence of a severability clause in the Employment Agreement. Order at 6-7. As discussed below, none of these factors, whether considered individually or in the aggregate, provide a sustainable basis for the Fourth Department's conclusion on a summary judgment motion that B&B acted in bad faith. See, e.g., State v. Welch-Richards, 209 A.D.2d 847, 850 (3d Dep't 1994) (questions concerning a party's subjective belief or intent are best resolved by the trier of fact). i. The Timing of Johnson's Receipt of the Employment Agreement Is Not Evidence of Bad Faith. The Fourth Department found that B&B acted in bad faith because Johnson was given the Employment Agreement on her first day of work and therefore supposedly did not receive "any benefit from plaintiffs beyond her continued 41 employment" in exchange for consenting to the Employment Agreement's terms. Order at 7. This conclusion, however, misconstrues both controlling legal precedent and the documentary record before the court. The mere fact that Johnson received the Employment Agreement on her first day of work in no way evidences the bad-faith "coercive use of dominant bargaining power" that BDO Seidman cautions against. See 93 N.Y.2d at 394. On the contrary, New York courts have been consistently willing to permit partial enforcement of restrictive covenants in situations where the employee was provided with the covenant on the first day of work and have rejected attempts to render this per se evidence of bad faith by the employer. See, e.g., Ashland, 59 A.D.3d at 106-07 ("[A]lthough [employee] was asked to sign the agreement when he commenced his employment, there is no evidence that plaintiff was motivated by 'some general plan to forestall competition' or otherwise 'imposed the covenant in bad faith, knowing full well that it was overbroad.' Rather viewing the evidence in the light most favorable to plaintiff as we must, it was legitimately attempting to protect information that it had taken years to develop.") (citations omitted); Portware, LLC v. Barot, No. 603738/05, 2006 WL 516816, at *4 (N.Y. Sup. Ct. Mar. 2, 2006) ("Although [employee] was required to sign the contract at the beginning of his employment, there is no evidence of coercion. I am aware of no 42 case law indicating that imposition of a restrictive covenant in an employment agreement is coercive per se."). The contrary approach taken by the Fourth Department here - triggering an automatic finding of bad faith based upon the day the employment agreement was provided to the employee - is fundamentally at odds with the BDO Seidman directive that a finding of bad faith or coercive misconduct must be based on a case-specific inquiry. 93 N.Y.2d at 394. Moreover, the court's conclusion that B&B acted in bad faith by providing Johnson with the Employment Agreement on her first day of employment fails to take into account the totality of the documentary record. Most glaringly, the Fourth Department failed to consider the evidence showing that, even though the Employment Agreement was given to Johnson on her first day, there was no pressure for her to sign it immediately. R. at 279-80. She was not told that she had to sign at that moment or her position would be revoked. Had Johnson asked- which she did not - she would have been given the opportunity to review it with her attorney and to propose changes, as many other B&B employees had done. /d. That she signed the documents immediately of her own choice does not render the circumstances improperly coercive. Furthermore, the Fourth Department's conclusion that Johnson received nothing "beyond her continued employment" is simply incorrect and ignores key 43 facts in the record. At the time of her hire, Johnson had valuable actuarial experience but she had never served as a broker, nor was she licensed to do so. R. at 268-69. By coming on board at B&B, she received not only training and experience in becoming a broker but also received her broker's license, paid for by B&B. !d. Surely this was of significant value to her, and given the opportunities, training, and experience which B&B afforded her, it was more than reasonable for B&B to ask that she refrain from trading on the relationships that B&B thereby permitted her to develop with B&B' s customers. In sum, the totality of the facts and circumstances surrounding plaintiffs initial employment and her signing of the Employment Agreement are not even suggestive of bad faith - and certainly cannot sustain a finding of bad faith on a summary judgment motion, where every inference must be construed in favor of B&B as the non-movant. See, e.g., Vega v. Restani Constr. Corp., 18 N.Y.3d 499, 503 (2012) (on a summary judgment motion, facts must be construed in the light most favorable to the non-moving party). ii. B&B Was Not Required to Tailor the Non-Solicitation Covenant to BDO Seidman. The Fourth Department also found that B&B acted in bad faith by not tailoring the language of the non-solicitation covenant to the standard set forth in the BDO Seidman holding. Order at 7. In making this ruling, the Fourth Department cited to the Scott decision, where an employer's failure to adapt the 44 terms of its restrictive covenants to governing New York law was held to be evidence of "the employer's knowledge that the covenant was overly broad," thereby demonstrating that the employer had acted in bad faith. Scott, Stackrow & Co., 9 A.D.3d at 807. Examining the facts in the Scott case, however, it is readily apparent that the holding is inapposite to the case at bar. Unlike in the Scott case, the Employment Agreement here specified that Florida law would govern the Employment Agreement. Given that B&B reasonably believed that Florida law and not New York law would govern, there is no basis to conclude that the BDO Seidman holding would have put B&B on notice "that the covenant was overly broad." Scott, Stackrow & Co., 9 A.D.3d at 807. This is especially so given that the Fourth Department itself "conclude[ d) that Florida law 'bears a reasonable relationship to the parties or the transaction."' Order at 3. In light of the Employment Agreement's Florida choice-of-law clause, and the Fourth Department's finding that Florida law bears a reasonable relationship to the parties and the transaction, the Fourth Department's finding that B&B acted in bad faith by not tailoring the non-solicitation covenant to BDO Seidman is plainly erroneous. Indeed, an inference of bad faith under these circumstances would have to be predicated on B&B 's somehow knowing or having been able to predict that 45 the Employment Agreement's Florida choice-of-law clause would ultimately be invalidated on public policy grounds. In fact, B&B had no reason to believe its Florida choice-of-law clause would be invalidated, especially given the multiple contacts with Florida supporting enforceability of the clause and New York's '"strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements."' Order at 3; see also IRE-Brasil Resseguros, S.A. v. Inepar Investments, S.A., 20 N.Y.3d 310, 315-16 (2012) (concluding that when there is an express choice of New York law in a contract pursuant to General Obligations Law § 5-1401, there is no need for a court to undertake a conflict-of-laws analysis; New York law will govern the contract in order to, among other things, "maintain predictability for the parties"). Moreover, while the Fourth Department invalidated the choice-of-law clause on policy grounds - holding that Florida law regarding the consideration of employee hardship was "truly obnoxious" to New York public policy - B&B had no reason to foresee that such a ruling would occur some seven years after Johnson signed the Employment Agreement. Indeed, prior to the Fourth Department's ruling, no New York court had determined that such a fundamental policy conflict between New York and Florida law on restrictive covenants exists. In fact, to B&B's knowledge, it appears the ruling below was the 46 first to hold that New York policy regarding restrictive covenants is so fundamental as to override an otherwise reasonable choice of any other state's law. Simply put, BDO Seidman could only serve to provide actual "knowledge" to B&B that the restrictive covenant was overly broad if B&B were clairvoyant enough to predict that a New York court would rule, some seven years hence, that while Florida law was a reasonable choice of law, it was nonetheless "truly obnoxious" to New York public policy, thereby invalidating the parties' choice-of- law clause. The Fourth Department offered no explanation as to why demanding this level of foresight is even reasonable, much less mandated as a matter of law. The plain fact is that B&B had no reason to believe there was controlling precedent contrary to the terms of the Employment Agreement because it did not in good faith have any reason to believe that New York law would be applicable to the Agreement's enforcement. This is especially so given this Court's pronouncement that an opponent of such a choice-of-law clause bears the '"heavy burden' of proving that application of Florida law would be offensive to a fundamental public policy of this State." Welsbach, 7 N.Y.3d at 632. Accordingly, notice of the BDO Seidman holding does not equate with "the employer's knowledge that the covenant was overly broad." Scott, Stackrow & Co., 9 A.D.3d at 807. Based on the facts before the courts below, there is no basis 47 to conclude that B&B "imposed the covenant in bad faith, knowing full well that it was overbroad." BDO Seidman, 93 N.Y.2d at 395. iii. The Severability Clause Is Not Evidence of Bad Faith. The Fourth Department also held that the inclusion of a severability clause in the Employment Agreement- i.e., a clause authorizing a court to blue-pencil- was itself conclusive evidence of B&B' s bad faith. Order at 7. To draw this inference at all requires overlooking key facts in the record, but to even suggest that it is the only logical inference is a clear disregard of the mandate to construe the facts in the light most favorable to B&B on this motion for summary judgment. See William J. Jenack Estate Appraisers and Auctioneers, Inc. v. Rabizadeh, 22 N.Y.3d 470, 475 (2013); Vega, 18 N.Y.3d at 503. In effect, it amounts to a pronouncement by the Fourth Department that inclusion of a severability clause as a matter of law precludes severance if a covenant is found overbroad - a conclusion that has no foundation in law or logic and indeed has now created an impossible Catch-22 for contracting parties. A severability clause is, of course, a non-controversial feature of innumerable contracts, including employment contracts, and is so standard as to be near ubiquitous. The reason for the prevalence of such clauses is not hard to fathom; a severability clause is nothing more than a prudent and practical mechanism, ultimately beneficial to all parties to a contract, to ensure that a ruling 48 invalidating a portion of an agreement will not vitiate the agreement as a whole. See, e.g., Donald J. Aspelund & Joan E. Beckner, Employee Noncompetition Law§ 10: 15 (20 13) (discussing widespread prevalence of severability clauses in employment contracts containing restrictive covenants and noting that "good practice" dictates their use). Thus, the determination by the Fourth Department that inclusion of such a standard provision somehow creates an inference of bad faith is not only baseless and without precedent but contrary to well-established commercial practice in the employment and other industries. Here, the severability clause served particularly useful purposes given that the Employment Agreement was drafted not under New York law, but rather the law of Florida. While the Fourth Department acknowledged there was a reasonable relation to Florida, any choice-of-law provision does create the narrow possibility that a given state will fmd one or more provisions of the chosen law to be unenforceable. Inclusion of a severability clause, by itself, indicates nothing more than the recognition of this possibility, and not- as the Fourth Department held - that the employer "imposed the covenant in bad faith, knowing full well that it was overbroad." Order at 7 (citations omitted). Tellingly, there is absolutely nothing in the factual record that could give rise to an inference that B&B was, in bad faith, including an overbroad clause. Once again, it is not enough - even if true - that B&B knew that under BDO 49 Seidman, its clause was overbroad under New York law; the Fourth Department's conclusion necessarily depends upon B&B "knowing full well" that the choice of Florida law would one day be deemed "truly obnoxious" to New York law and thus unenforceable. There is simply no evidence in the record to support such a conclusion. Finally, it must be emphasized that the Fourth Department's ruling, if allowed to stand, will place employers - and indeed potentially other contracting parties - in a highly untenable position. In determining whether to "sever and grant partial enforcement for an overbroad employee restrictive covenant," BDO Seidman, 93 N.Y.2d at 394, some courts have noted that the inclusion of a severability clause is a factor in determining whether partial enforcement is appropriate - and arguably is a prerequisite for the court to proceed with partial enforcement. See, e.g., Awwad v. Capital Region Otolaryngology Head & Neck Group, No. 5334-07, 2007 WL 4623509, at *6 n.2 (N.Y. Sup. Ct. Albany Cty. Nov. 27, 2007) (favorably noting parties' inclusion of clause allowing partial enforcement); US/ Ins. Servs. LLC v. Miner, 801 F. Supp. 2d 175, 188 n.9 (S.D.N.Y. 2011) (noting that employment agreement would by its terms "permit the Court to 'blue-pencil'"). Cf. Chiarizia v. Xtreme Rydz Custom Cycles, 43 A.D.3d 1353, 1354 (4th Dep't 2007) ("Whether a contract is entire or severable generally is a question of intention, to be determined from the language employed 50 by the parties, viewed in the light of the circumstances surrounding them at the time they contracted.") (citations omitted) (internal quotation marks omitted); Mun. Capital Appreciation Partners,/, L.P. v. Page, 181 F. Supp. 2d 379, 395 (S.D.N.Y. 2002) ("[T]here was no severability clause, which militates against a finding of severability."). Indeed, a leading treatise on employment agreements says, for this very reason, that a specific clause allowing modification should be included with respect to restrictive covenants. See MichaelS. Melbinger, CCH Executive Compensation 1[455 (2012) ("Other states only permit a judge to modify the written covenant where the employment agreement explicitly permits such modification. Accordingly, the employment agreement should invite and encourage the court to modify any provision the court deems invalid or unenforceable to the extent and in the manner necessary to render the same valid and enforceable."). Given the above, it is clear that were the Fourth Department's ruling to stand, employers and other contracting parties would face an insoluble dilemma: either fail to include a clause authorizing blue-penciling, and a court may determine that the parties did not intend to allow it, or include such a clause, and risk having a court hold it to be conclusive evidence of bad faith, as the Fourth 51 Department so found. This would plainly be an untenable outcome and for this reason, among others, the Fourth Department's decision should be reversed. D. B&B Has Not Had a Fair Opportunity to Take Discovery on the Issue of Partial Enforcement. As set forth above, the Fourth Department was incorrect in ruling that partial enforcement was precluded as a matter of law - particularly in light of the evidence that B&B sought enforcement of the non-solicitation covenant to protect a legitimate business interest and the absence of any indicia of bad faith conduct by B&B. At a bare minimum, however, the Fourth Department should have deferred any ruling on the availability of partial enforcement until B&B was provided a full and fair opportunity to take discovery on this issue. As the trial court expressly acknowledged, defendants made this motion shortly after the commencement of this litigation and concurrently with service of their amended answer, "prior to any significant discovery." R. at 19-20, 35. When defendants' motion was filed, no meaningful document discovery had been conducted, and no depositions had been taken, including the potentially critical deposition of defendant Johnson, as further discussed below. Because BDO Seidman and its progeny have made clear that the availability of partial enforcement depends upon a case-specific, fact-intensive inquiry, the lack of an opportunity to take any substantial discovery is particularly prejudicial to B&B in the context of this case. See CPLR 3212(f) (if party opposing summary 52 judgment demonstrates "that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion or may order a continuance to permit affidavits to be obtained or disclosure to be had"). As this Court has instructed- and as the Fourth Department expressly recognized - the question of partial enforcement requires "a case specific analysis." Order at 7. See BDO Seidman, 93 N.Y.2d at 394; Globaldata Mgt. Corp v. Pfizer Inc., No. 600506/2005, 2005 WL 3487845, at *8-9 (N.Y. Sup. Ct. Nov. 23, 2005) (factual development of record required before court may rule upon availability of partial enforcement of restrictive covenant). Plainly, determining the suitability of partial enforcement under New York law is precisely the sort of inquiry as to which a full and fair opportunity to develop an appropriate evidentiary record through discovery proceedings is crucial to a fair determination. It is fundamentally inequitable to place B&B in a position where it must now muster evidentiary support for its position on a fact-intensive issue in a dispositive motion when the most basic of discovery proceedings have yet to be conducted. Indeed, permitting the parties to proceed with basic discovery before rendering a dispositive decision on the partial enforcement issue could shed crucial light on facts and circumstances surrounding the signing of the Employment Agreement. For example, B&B has had no opportunity to take a deposition or 53 obtain any other meaningful discovery from Johnson concerning her receiving and executing the Employment Agreement. Indeed, Johnson made no claims in her affidavit that support any allegation of coercion or whether she considered the restrictive covenants onerous or, indeed, whether she had read them at all. R. at 134-35. Such facts would surely be relevant to the "case-specific" inquiry that BDO Seidman mandates, and there is no question that B&B should have been afforded the opportunity to develop these and other relevant facts through the discovery process. In short, the Fourth Department's ruling denying partial enforcement as a matter of law was, at a minimum, very premature, and any ruling on this issue should have been deferred until the close of discovery. See, e.g., Landmark Land Co., Inc. v. Sprague, 701 F.2d 1065, 1070 (2d Cir. 1983) (reversing grant of summary judgment for plaintiff where material issue of fact persisted as to plaintiffs state of mind and limited discovery had been conducted prior to motion); Flaherty v. Coughlin, 713 F.2d 10, 13 (2d Cir. 1983) ("[C]aution should be exercised in granting summary judgment where state of mind is in issue or when the party opposing the motion has been denied relevant discovery."). 54 CONCLUSION For all of the foregoing reasons, it is respectfully submitted that that portion of the Fourth Department's Order which ruled that partial enforcement of the Employment Agreement's non-solicitation covenant is precluded as a matter of law should be reversed. Dated: July 21, 2014 New York, New York Respectfully submitted, SA TIERLEE STEPHENS BURKE & BURKE LLP /1 ~ -. ( 11/?W-.C-