Brown & Brown, Inc., et al., Appellants,v.Theresa A. Johnson, et al., Respondents. (AD No. CA 13-00340)

Brief

N.Y.May 6, 2015

STATE OF NEW YORK To be Argued by: PRESTON L. ZARLOCK Time Requested for Argument: (20 Minutes) Qtnurt nf Apptala APL-2014-00103 BROWN & BROWN, INC. and BROWN & BROWN OF NEW YORK, INC., Plaintiffs-Appellants, vs. THERESA A. JOHNSON and LAWLEY BENEFITS GROUP, LLC, Defendants-Respondents. Erie County Index No.: I2011-605320. Appellate Division Docket Number: CA 13-00340. BRIEF FOR DEFENDANTS-RESPONDENTS PRESTON L. ZARLOCK WILLIAM J. SIMON Of Counsel PHILLIPS LYTLE LLP Attorneys for Defendants-Respondents One Canalside 125 Main Street Buffalo, New York 14203-2887 Telephone: (716) 847-8400 Facsimile: (716) 852-6100 Date of Completion: October 3, 2014. BATAVIA LEGAL PRINTING, INC.- Telephone (866) 768-2100 CORPORATE DISCLOSURE STATEMENT Defendant-Respondent Lawley Benefits Group, LLC ("Lawley") states that it is a wholly-owned subsidiary of Lawley Insurance Services, Inc. Lawley's affiliates are: Lawley Properties LLC, Lawley Agency LLC, Lawley Agency LLC d/b/a Lawley Construction Solutions, Lawley Genesee LLC, Lawley Tradition LLC, Lawley Westchester Group LLC, Lawley Andolina Verdi LLC, Lawley Vivacqua Scheff LLC, and Lawley Sachs LLC. - 1 - TABLE OF CONTENTS CORPORATE DISCLOSURE STATEMENT .......................................................... i TABLE OF AUTHORITIES .................................................................................... vi QUESTIONS PRESENTED ..................................................................................... 1 PRELIMINARY STATEMENT ............................................................................... 1 STATEMENT OF FACTS ........................................................................................ 2 A. BACKGROUND FACTS ..................................................................... 2 1. The Parties .................................................................................. 2 11. Ms. Johnson's Background And Training .................................. 3 111. Ms. Johnson's Hiring By BBNY ................................................ 5 1v. The Agreement And Its Presentation To Ms. Johnson On Her First Day Of Employment. ............................................ 5 v. Ms. Johnson's Employment At BBNY ...................................... 8 vi. Ms. Johnson's Involuntary Termination By BBNY .................. 8 v11. Ms. Johnson's Post-Termination Activities And Communications With Plaintiffs ................................................ 9 B. PROCEEDINGS ................................................................................. 10 1. Pleadings And Motions ............................................................ 10 11. The Trial Court's Summary Judgment Decision And Order ... 11 111. The Appellate Division's Order ............................................... 12 ARGUMENT .......................................................................................................... 15 POINT I THE APPELLATE DIVISION CORRECTLY REJECTED THE AGREEMENT'S FLORIDA CHOICE-OF-LAW CLAUSE ................................................................................... 15 - 11 - A. It Is Undisputed That The Appellate Division Correctly Determined That Florida Law On Restrictive Covenants Violates Fundamental New York Public Policy ................................................ 15 B. Plaintiffs' Arguments That The Appellate Division Erred By Not Partially Applying The Florida Choice-Of-Law Clause Are Unpreserved And Without Merit. ................................................................ 19 L Plaintiffs Failed To Preserve Their Argument. ... 19 11. There Is No Basis For Partial Application Of The Florida Choice-Of-Law Clause .................... 23 a. There Is No Precedent For Partial Application And No Basis To Do So Here ...................................................... 23 b. The Other States To Consider The Florida Restraint Of Trade Statute Have Rejected Florida Law In Toto . ......... 29 111. The Florida Blue-Penciling Sub-Section Itself Violates New York Public Policy ........................ 31 a. The Florida Blue Penciling Sub-Section Violates New York Public Policy Because It Still Prohibits Consideration Of Hardship To The Employee And Bars The Court From Narrowly Construing The Restraint ............................................. 31 b. There Is No Precedent To Pluck And Apply A Few Words From A Foreign Statute And No Basis To Do So Here ....... 33 c. The Mandatory Language Of The Florida Blue-Penciling Sub-Section Also Violates New York Public Policy By Prohibiting Judicial Discretion ..................................... 35 - 111 - C. The Order's Rejection Of Florida Law Should Also Be Affirmed On The Basis That Florida Law Lacks A Reasonable Relationship To The Agreement ............. 41 D. Plaintiffs' Request For Affirmative Relief On Appeal Should Be Rejected ........................................... 45 POINT II THE APPELLATE DIVISION DID NOT ABUSE ITS DISCRETION IN REFUSING TOP ARTIALL Y ENFORCE PLAINTIFFS' RESTRICTIVE COVENANT ..... 46 A. This Court's Review Is Limited To Whether The Appellate Division Abused Its Discretion As A Matter Of Law ................................................................ 46 B. The Appellate Division Did Not Abuse Its Discretion In Refusing To Partially Enforce The Overbroad Restrictive Covenant. ..................................................... 4 7 1. The Appellate Division Correctly Considered Plaintiffs' Use Of Dominant Bargaining Power In Imposing The Restrictive Covenant As An Initial Condition Of Ms. Johnson's Employment. ........................................................ 50 11. Plaintiffs Were On Notice That The Restrictive Covenant Was Overbroad ...................... ; ............. 54 111. The Appellate Division Correctly Analyzed The Severability Clause ....................................... 57 C. The Appellate Division's Order Should Also Be Affirmed On The Grounds That The Agreement Is Unenforceable Due To The Absence Of A Mutuality · Of Obligation With Ms. Johnson ................................... 60 POINT III THE APPELLATE DIVISION DID NOT ABUSE ITS DISCRETION IN DENYING PLAINTIFFS' BELATED AND BASELESS CLAIM THAT THEY REQUIRED DISCOVERY ........................................................................... 63 - IV - A. Plaintiffs' Argument Regarding The Alleged Need For Discovery Was Improperly Raised For The First Time On Appeal. ................................................... 64 B. The Appellate Division Correctly Rejected Plaintiffs' Argument ........................................................................ 65 1. Plaintiffs Failed To Seek Discovery Below ........ 65 11. Plaintiffs Failed To Demonstrate That Facts Essential To Their Opposition Existed Within Defendants' Exclusive Possession ....................... 66 CONCLUSION ....................................................................................................... 69 -v- TABLE OF AUTHORITIES CASES Am. Equities Group, Inc. v. Ahava Dairy Prods. Corp., No. 01 Civ. 5207(RWS), 2004 WL 870260 (S.D.N.Y. Apr. 23, 2004) ................................................................................................................... 42 Am. Home Assurance Co. v. Hapag Lloyd Container Linie, GMBH, No. 03 CV 5462, 2004 WL 1616379 (S.D.N.Y. Jul. 19, 2004) ......................... 41 AM Medica Commc 'ns Grp. v. Kilgallen, 261 F. Supp. 2d 258 (S.D.N.Y. 2003), aff'd90 F. App'x 10 (2d Cir. 2003) ............................................................................................................ 47 American Exp. Travel Related Servs. Co. v. Assih, 26 Misc. 3d 1016 (N.Y. Sup. Ct. 2009) ............................................................. 26 Appalachian Ins. Co. v. Gen. Elec. Co., 20 Misc. 3d 1122(A) (N.Y. Sup. Ct. 2008) ........................................................ 25 Arakelian v. Omnicare Inc., 735 F. Supp. 2d 22 (S.D.N.Y. 2010) ............................................................ 61, 63 Arrow Comm 'n Labs. v. Pico Prods., 206 A.D.2d 922 (4th Dep't 1994) ...................................................................... 64 Atomic Tattoos, LLC v. Morgan, 45 So. 3d 63 (Fla. Dist. Ct. App. 2d Dist. 2010) ................................................ 40 Austin v. Mid State Fire Equip. of Cent. Florida, Inc., 727 So. 2d 1097 (Fla. Dist. Ct. App. 5th Dist. 1999) ................................... 39, 40 BDO Seidman v. Hirschberg, 93 N.Y.2d 382 (1999) ................................................................................. Passim Bingham v. New York City Transit Authority, 99 N.Y.2d 355 (2003) ............................................................................ 20, 22, 56 Boss v. Am. Exp. Fin. Advisors, Inc., 15 A.D.3d 306 (1st Dep't 2005) ................................................................... 23, 24 - Vl - Boss v. Am. Express Fin. Advisors, Inc., 6 N.Y.3d 242 (2006) .......................................................................................... 24 Bradley v. Benchmark Mgt. Corp., 294 A.D.2d 879 (4th Dep't 2002) ...................................................................... 64 Brown & Brown, Inc. v. Ali, 494 F. Supp. 2d 943 (N.D. Ill. 2007) ................................................................. 55 Brown & Brown, Inc. v. Ali, 592 F. Supp. 2d 1009 (N.D. Ill. 2009) ......................................................... 18, 30 Brown & Brown, Inc. v. Mudron, 379 Ill. App. 3d 724 (Ill. App. Ct. 3d Dist. 2008) .................................. 18, 29, 30 Evolution Mkts, Inc. v. Penny, 23 Misc. 3d 1131(A), 2009 WL 1470451 (N.Y. Sup. Ct. May 20, 2009) ................................................................................................................... 62 Carson v. Obor Holding Co., LLC, 318 Ga. App. 645 (Ga. Ct. App. 2012) ........................................................ 18, 30 Clever Ideas v. 9999 Restaurant Corp., 2007 WL 3234747 (N.Y. Sup. Ct. N.Y. Cty., Commercial Division, Oct. 12, 2007) ..................................................................................... 42 Clifton Steel Corp. v. Gen. Elec. Co., 80 A.D.2d 714 (3d Dep't 1981) ......................................................................... 27 Clifton Steel Corp. v. Gen. Elec. Co., 80 A.D.2d 715 (3d Dep't 1981) ......................................................................... 27 Columbia Ribbon & Carbon Mfg. Co. A-1-A Corp., 42 N.Y.2d 496, 499 (1999) ................................................................................ 13 Cooney v. Osgood Machinery, Inc., 81N.Y.2d66 (1993) .......................................................................................... 23 Cooper v. City of New York, 81N.Y.2d584 (1993) ........................................................................................ 20 Crippen v. United Petroleum Feedstocks, Inc., 245 A.D.2d 152 (1st Dep't 1997) ....................................................................... 49 - Vll - Culbert v. Rois Cap. Co., 184 A.D.2d 612 (2d Dep't 1992) ....................................................................... 41 Del Monte Fresh Produce, N.A., Inc. v. Chiquita Brands Int'! Inc., 616 F. Supp. 2d 805 (N.D. Ill. 2009) ........................................................... 18, 30 DePuy Orthopaedics, Inc. v. Waxman, 95 So. 3d 928 (Fla. Dist. Ct. App. 1st Dist. 2012) ............................................. 40 DeZimm v. Connelie, 64 N.Y.2d 860 (1985) .................................................................................. 46, 48 Dill v. Continental Car Club, Inc., No. E2013-00170-COA-R3-CV, 2013 WL 5874713 (Tenn. Ct. App. Oct. 31, 2013) ...................................................................................... 18, 30 Dillon v. Spilo, 275 N.Y. 275 (1937) .......................................................................................... 21 Earthweb, Inc. v. Schlack, . 71 F. Supp. 2d 299 (S.D.N.Y. 1999) .................................................................. 54 Educ. Res. Institute, Inc. v. Piazza, 17 A.D.3d 513 (2d Dep't 2005) ......................................................................... 26 Edwards v. Harris, 964 So. 2d 196 (Fla. Dist. Ct. App. 1st Dist. 2007) ........................................... 40 Elexco Land Servs., Inc. v. Hennig, No. 1 l-CV-00214(A)(M), 2011WL9368970 (W.D.N.Y. Dec. 28, 2011) ................................................................................................................... 54 Exch. Int'!, Inc. v. Vacation Ownership Relief LLC, No. 6:10-cv-1273-0rl-35DAB, 2010 WL 4983669 (M.D. Fla. Oct. 27, 2010) ............................................................................................................. 40 FC Bruckner Assocs., L.P. v. Fireman's Fund Ins. Co., 95 A.D.3d 556 (1st Dep't 2012) ......................................................................... 25 Fireman's Fund Ins. Co. v. Schuster Films, Inc., 811 F. Supp. 978 (S.D.N.Y. 1993) ..................................................................... 44 - Vlll - Fox v. Ashland Oil, Inc., 134 A.D.2d 850 (4th Dep't 1987) ...................................................................... 23 Fullman v. R&G Brenner Income Tax Consultants, 24 Misc. 3d 1214(A) (N.Y. Sup. Ct. 2009) .................................................. 49, 54 Gen. Motors Corp. v. Fiat S.P.A., No. 08 Civ. 4999(DAB), 2009 WL 5088739 (S.D.N.Y. Dec. 17, 2009) ................................................................................................................... 42 Genesee Valley Trust Co. v. The Waterford Group, LLC, Index No. 2011-07672 (N.Y. Sup. Ct. Dec. 19, 2013) ...................................... 53 Gilman & Ciocia, Inc. v. Randello, 24 Misc. 3d 1216(A) (N.Y. Sup. Ct. 2007) ............................ ; ........................... 53 Gimbel Bros. v. White, 256 A.D. 439 (3d Dep't 1939) ........................................................................... 61 Globaldata Mgt. Corp. v. Pfizer Inc., No~ 600506/2005, 2005 WL 3487845 (N.Y. Sup. Ct. Nov. 23, 2005) ................................................................................................................... 68 GPS Indus., LLC v. Lewis, 691 F. Supp. 2d 1327 (M.D. Fla. 2010) ............................................................. 40 Gramercy Park Animal Ctr., Inc. v. Nowicki, 41 N.Y.2d 874 (1977) .................................................................................. 17, 18 Grassi & Co, CP As, P. C. v. Janover Rubinoff, LLC, 82 A.D.3d 700 (2d Dep't 2011) ................................................................... 14, 61 Haynes v. Haynes, 83 N.Y.2d 954 (1994) ........................................................................................ 20 Heartland Sec. Corp. v. Gerstenblatt, No. 99 CIV 3694 WHP, 2000 WL 303274 (S.D.N.Y. Mar. 22, 2000) ................................................................................................................... 58 Heritage Hills Society, Ltd. v. Heritage Dev. Group, Inc., 56 A.D.3d 426 (2d Dep't 2008) ......................................................................... 67 - lX - Holterman v. Holterman, 3 N.Y.3d 1 (2004) •H••••······················································································· 46 Hugh O'Kane Elec. Co., LLC v. MasTec N. Am., Inc., 19 A.D.3d 126 (1st Dep't 2005) ......................................................................... 28 In re Fishman, 268 A.D.2d 651 (3d Dep't 2000) ....................................................................... 63 In re UFG Int'!, Inc., 225 B.R. 51 (S.D.N.Y. 1998) ............................................................................. 61 Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34 (1961) ............................................................................................ 27 Koslow v. Morrison, 4 Misc. 2d 158 (Sup. Ct. Kings Cty. 1956) ........................................................ 61 Levo v. Greenwald, 66 N.Y.2d 962 (1985) ........................................................................................ 47 Lobdell v. South Buffalo Railway Co., 159 A.D.2d 958 (4th Dep't 1990) ...................................................................... 68 M&T Bank v. HR Staffing Solutions, Inc., 106 A.D3d 1498 (4th Dep't 2013) .................................................................... 66 Mary Lincoln Candies, Inc. v. Dep 't of Labor, 289 N.Y. 262 (1942) .......................................................................................... 21 Matter of Von Bulow, 63 N.Y.2d 221 (1984) ........................................................................................ 47 Mazzaferro v. Barterama Corp., 218 A.D.2d 643 (2d Dep't 1995) ....................................................................... 64 Meath v. Mishrick, 68 N.Y.2d 992 (1986) ........................................................................................ 65 Medi-Weight/ass Franchising USA, LLC, v. Medi-Weight/ass Clinic of Boca Raton, LLC, No. 8:11-cv-2437-T-30MAP, 2012 WL 260902 (M.D. Fla. Jan. 3, 2012) ..................................................................................... 40 -x- Medi-Weight/ass Franchising USA, LLC v. Sadek, No. 8:09-cv-2421-T-24MAP, 2010 WL 1837767 (M.D. Fla. Mar. 11, 2010) ............................................................................................................. 40 Merrill Lynch Pierce Fenner & Smith v. Dunn, 191 F. Supp. 2d 1346 (M.D. Fla. 2002) ............................................................ 55 Morris v. Schroder Cap. Mgmt. Int'/., 7 N.Y.3d 616 (2006) .................................................................................... 60, 61 N. Am. Prods. Corp. v. Moore, 196 F. Supp. 2d 1217 (M.D. Fla. 2002) ............................................................. 41 Nadeau v. Connell, 243 A.D.2d 1009 (3d Dep't 1997) ..................................................................... 63 Patrician Plastic Corp. v. Bernadel Realty Corp., 25 N.Y.2d 599 (1970) ............................................................................ 21, 22, 46 Pavlou v. City of New York, 8 N.Y.3d 961 (2007) .......................................................................................... 46 People v. Cascia, 191 A.D. 376 (2d Dep't 1920) ........................................................................... 61 Plymack v. Copley Pharm., Inc., 1995 WL 606272 (S.D.N.Y. 1995) .................................................................... 26 Pollicina v. Misericordia Hosp., 82 N.Y.2d 332 (1993) ........................................................................................ 36 Post v. Merrill Lynch, Pierce, Fenner & Smith, 48 N.Y.2d 84 (1979) ............................................................................. 16, 60, 61 Progressive Cas. Ins. Co. v. Baker, 290 A.D.2d 676 (3d Dep't 2002) ....................................................................... 64 PartyLite Gifts, Inc. v. MacMillan, 895 F. Supp. 2d 1213 (M.D. Fla. 2012) ............................................................. 40 Purchasing Assoc. v. Weitz, 13 N.Y.2d 267 (1963), rearg. den., 14 N.Y.2d 584 (1964) ........................ 13, 16 - Xl - Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC, 813 F. Supp. 2d 489 (S.D.N.Y. 2011) .......................................................... 49, 54 Reed Roberts Assoc. v. Strauman, 40 N.Y.2d 303 (1976), rearg. den., 40 N.Y.2d 918 (1976) ................... 13, 16, 46 Rosemont Enters., Inc. v. Irving, 41 N.Y.2d 829 (1977) ........................................................................................ 59 Rosen v. Rosenholc, 303 A.D.2d 230 (1st Dep't 2003) ....................................................................... 20 Salina v. Cimino, 1 N.Y.3d 166 (2003) .......................................................................................... 20 Schultz v. Boy Scouts of Am., 65 N.Y.2d 189 (1985) ................................................................................... 27, 28 Scott, Stackrow & Co. v. Skavina, 9 A.D.3d 805 (3d Dep't 2004), lv. denied, 3 N.Y.3d 612 (2004) ............... Passim Scott v. Beth Israel Med. Ctr., 41 A.D.3d 222 (1st Dep't 2007) ......................................................................... 61 SIFCO Indus., Inc. v. Advanced Plating Techs., Inc., 867 F. Supp. 155 (S.D.N.Y. 1994) ..................................................................... 61 Simpson v. Loehmann, 21 N.Y.2d 990 (1968) ........................................................................................ 20 Southwest Stainless L.P. v. Sappington, No. 07-CV-0334-CVE-PJC, 2008 WL 918706 (N.D. Okla. Apr. 1, 2008) ................................................................................................................... 19 Town of Massena v. Niagara Mohawk Corp., 45 N.Y.2d 482 (1978) .................................................................................. 41, 60 Unisource Worldwide v. South Cent. Ala. Supply, 199 F. Supp. 2d 1194 (M.D. Ala. 2001) ...................................................... 18, 29 Vital Crane Servs., Inc. v. Micucci, 118 A.D.3d 1404 (4th Dep't 2014) .................................................................... 53 - Xll - Wausau Bus. Ins. Co. v. Horizon Admin. Servs. LLC, 803 F. Supp. 2d 209 (E.D.N.Y. 2011) ................................................................ 25 Welch Foods, Inc. v. Wilson, 277 A.D.2d 882 (4th Dep't 2000) ...................................................................... 66 Welsbach Elec. Corp. v. MasTec N. Am. Inc., 7 N.Y.3d 624 (2006) .......................................................................................... 23 Wright v. Shapiro, 16 A.D.3d 1042 (4th Dep't 2005) ...................................................................... 66 Zinter Handling, Inc. v. Britton, 46 A.D.3d 998 (3d Dep't 2007) ......................................................................... 68 Zurich Ins. Co. v. Shearson Lehman Hutton, 84 N.Y.2d 309 (1994) ......................................................................................... 25 STATUTES Banking Law §14-a(l) ............................................................................................. 26 CPLR §3212(f) ............................................................................................ 11, 64, 66 CPLR §550l(b) ....................................................................................................... 19 CPLR §5612(b) ....................................................................................................... 46 FLA. STAT. §542.335 ................................................................................................ 41 FLA. STAT. §542.335(1)(c) .................................................... 1, 15, 24, 30, 31, 36, 37 FLA. STAT. §542.335(1 )(g)(l) ................................................................................. 17 FLA. STAT. §542.335(1 )(h) ...................................................................................... 18 General Obligations Law §5-501 ............................................................................ 26 General Obligations Law §5-511 ............................................................................ 26 Insurance Law § 1102 .............................................................................................. 5 7 Labor Law §193(1) .................................................................................................. 23 - Xlll - Labor Law § 198-c ................................................................................................... 23 Labor Law §593(3) .................................................................................................. 63 Lien Law §12-a(2) ................................................................................................... 27 Lien Law §34 ........................................................................................................... 27 New York Insurance Law .......................................................................................... 2 Penal Law § 190.40 .................................................................................................. 26 12 NYCRR 195.1 ..................................................................................................... 23 OTHER AUTHORITIES Buffalo Business First "Book of Lists" ..................................................................... 4 Cohen and Karger, The Powers of the New York Court of Appeals ................. 46, 47 N.Y. CONST. art. VI, §3 ..................................................................................... 19, 21 - XlV - QUESTIONS PRESENTED 1. Did the Appellate Division properly hold that Florida law on restrictive covenants, embodied in FLA. STAT. §542.335 (entitled, "Valid restraints of trade or commerce" [the "Florida Restraint of Trade Statute"]), violates New York public policy, and thus the employment agreement's Florida choice-of-law clause is unenforceable? Answer: Yes. The Florida Restraint of Trade Statute is not only directly contrary to fundamental New York public policy as expressed by this Court, but Florida choice-of-law clauses in employment agreements have also been rejected in toto by Courts in the five states that have considered the same issue (Illinois, Alabama, Georgia, Tennessee, and Oklahoma). 2. Did Plaintiffs raise before the Appellate Division, and preserve for review by this Court, the principal argument in their brief - i.e., that the Appellate Division should have partially applied Florida law by applying the mandatory blue-penciling sub-section of the Florida Restraint of Trade Statute? Answer: No. Plaintiffs failed to raise that argument at the Trial Court or at the Appellate Division until their reargument motion, which was denied. In addition, there is no merit to that argument. Not only is there no precedent for partially applying a choice-of-law clause, the sub-section of the Florida Restraint of Trade Statute requiring blue-penciling is itself contrary to fundamental New York public policy. 3. Did the Appellate Division abuse its discretion as a matter of law by refusing to partially enforce Plaintiffs' admittedly overbroad restrictive covenant? Answer: No. Not only have Plaintiffs failed to raise the issue of abuse of discretion (and thereby waived it), the Appellate Division was well within its discretion (and correct under any standard) in refusing to partially enforce the overbroad covenant. - 2 - PRELIMINARY STATEMENT Plaintiffs-Appellants Brown & Brown of New York, Inc. ("BBNY") and Brown & Brown, Inc. ("BBi") (collectively, "Plaintiffs") request that this Court reverse the unanimous Decision and Order ("Order") of the Appellate Division, Fourth Department that rejected, as contrary to New York public policy, the Florida choice-of-law clause contained in the employment agreement (the "Agreement") Plaintiffs presented to Ms. Johnson on her first day of work, after inducing her to leave her former employment with BlueCross/BlueShield ("BlueCross"). This Court should instead affirm the Order. Not only is the Florida Restraint of Trade Statute directly contrary to New York public policy as expressed by this Court, but the Appellate Division also correctly aligned New York with the five other states that have considered Florida choice-of-law clauses in connection with employment agreements and rejected Florida law, in toto. Plaintiffs' argument that the Appellate Division erred in not partially applying Florida law by enforcing the mandatory blue-penciling sub-section of the Florida Restraint of Trade Statute fails on every level. Initially, this argument was never raised until Plaintiffs' unsuccessful motion for reargument and is, therefore, not before this Court. Second, there is no authority for partially applying a contractual choice-of-law clause in New York (and certainly no persuasive authority from other states, each of which rejected the Florida Restraint of Trade Statute in toto ), and the unified Florida Restraint of Trade Statute provides no basis to do so. Third, Florida's mandatory blue-penciling sub-section itself violates New York public policy by prohibiting consideration of hardship to the employee and requiring that the Court blue-pencil a restraint if it is overbroad. Finally, the Appellate Division certainly did not abuse its discretion as a matter of law by declining to partially enforce the admittedly overbroad restrictive covenant. Plaintiffs have not even argued an abuse of discretion and cannot therefore challenge the Appellate Division's discretion. Moreover, it is undisputed that the Agreement's restrictions are overbroad, and the undisputed facts of Plaintiffs' overreaching not only establish no abuse of discretion, they show that there was no error under any standard. Accordingly, the Order should be affirmed. STATEMENT OF FACTS A. Background Facts. i. The Parties. Ms. Johnson is a resident of New York and a licensed life insurance broker under the New York Insurance Law. (Record on Appeal at ["R:"] 131, 144). Ms. Johnson has never been licensed in any other state and has never acted as a broker or in any other capacity for insurance related services sold outside of New York State. (R:131). During her employment with BBNY, Ms. Johnson worked solely on New York insurance matters. (R: 132). - 2 - PlaintiffBBNY is a New York corporation, with its principal place of business in New York. (R:131, 145-49). BBNY is also licensed only in New York to act as an agent or broker in regard to various insurance products. (Id.). Plaintiff BBi is BBNY' s parent corporation. It is a Florida corporation with its principal place of business in Florida. (R:50). BBi is not licensed with the New York Insurance Department n/k/a the New York Department of Financial Services and cannot legally participate in the insurance business in New York. (R: 132). Lawley is a New York limited liability company with its principal place of business in Buffalo, New York. (R:50). Lawley is licensed only with the State of New York to act as an insurance agent and broker. (R: 109 ). Lawley and BBNY each are licensed independent insurance brokers in New York, acting as intermediaries between insurers and companies purchasing health insurance benefits for their employees. (R: 16, 109). ii. Ms. Johnson's Background And Training. In May of 1985, Ms. Johnson was hired by BlueCross in the position of Statistician, Actuarial & Underwriting Department, and worked with BlueCross in Buffalo, New York for over twenty years. (R:132-33, 360). In her capacity as Director of Actuarial Services for a major insurer, Ms. Johnson worked regularly with brokers, including BBNY and Lawley. (R:360-61). Ms. Johnson also worked - 3 - regularly with ultimate customers at BlueCross. That included working on most, if not all of, the large employers' accounts in the Buffalo area. (R:361). At BlueCross, Ms. Johnson developed extensive experience with underwriting and actuarial aspects of large accounts. (R:3 54 (admitting Statement No. 14, see R:251)). Ms. Johnson worked with underwriting and actuarial aspects of insurance plans for large accounts which included, but was not limited to, the setting of experience rates for policies. (R:132). Ms. Johnson's background and actuarial expertise is only of value with large employer accounts because the small difference in rates she can deliver amounts to a great deal of savings on that scale. (R:361). There are few such large employers in Western New York. The identity and contact information of these few large employers was known to Ms. Johnson at BlueCross, and there are many publications which advise of the principal employers in various areas of business, including the Buffalo Business First "Book of Lists." (R:142, 361, 374-96). Ms. Johnson was promoted by BlueCross to the position of Director, Actuarial Services, where her focus remained underwriting. (R:132). In all, prior to being employed by BBNY, Ms. Johnson had 21 years of underwriting and actuarial experience in insurance analysis at BlueCross. (R:133). - 4 - iii. Ms. Johnson's Hiring By BBNY. It is undisputed that Ms. Johnson was hired by BBNY due to her pre- existing ability, developed during over twenty (20) years of experience at BlueCross, to provide actuarial analysis of utilization and experience data. (See Affidavit of Linda Taylor, Executive Vice President ofBBNY's Buffalo Office, at ~8 (R:265); see also Statement No. 22 (R:354)). Ms. Johnson was recruited by Kevin Gannon ofBBNY. All discussions concerned only compensation, which was eventually agreed upon, without mention of any restrictive covenants. (R:134). Ms. Johnson was eventually offered the position of Vice-President of Underwriting at BBNY, and eventually became Chief Underwriting Officer. (Id.). Ms. Johnson's meetings and discussions prior to being hired were solely with BBNY. At no time did she travel out ofNew York State in relation to her potential hiring, nor did she meet with anyone from BBL (Id.). Based on this offer, Ms. Johnson was induced to leave her Director position at BlueCross to join BBNY. (Id.). Ms. Johnson was never informed that she would be required to sign any restrictive covenants. (Id.). iv. The Agreement And Its Presentation To Ms. Johnson On Her First Day Of Employment. On her first day of work at BBNY, once Plaintiffs knew that she had already left her former employer, Ms. Johnson was suddenly presented with a number of documents she was told to sign, without benefit of counsel, including insurance - 5 - and medical election forms. (R: 132). Plaintiffs do not dispute that Ms. Johnson never saw the Agreement (R:71-7 6) until it was presented to her in a stack of other documents on her first day of work at BBNY. (Statement Nos. 25, 26 [R:354-55]; see also R:134, 193, 217-18, 241-42). Ms. Johnson and BBNY signed the Agreement in New York in 2006. (R:135, 76). Notably, it is undisputed that BBi never signed the Agreement until August 2010 (if at all). (See Affidavit of J. Scott Penny, Regional President of BBi, at ~~3-4 [R:282-83]). Moreover, Mark E. King, BBI's Senior Litigation Counsel, wrote Ms. Johnson a letter on April 4, 2011, and expressly recognized that BBi was not a party to the Agreement. In the first sentence of his letter, he states: It is our understanding that you have recently breached the restrictive covenants in your Employment Agreement with Brown & Brown of New York, Inc. (the "Company") dated December 1, 2006, (the "Agreement"). (R: 160). In fact, the terms of the Agreement itself confirm that BBNY alone was Ms. Johnson's employer. In the first paragraph under "Definitions" it provides that the "Company" that employs the "Employee" is only "Brown & Brown of New York Inc.", except for paragraphs 8-11 of the Agreement. (R:71). Thus, all aspects of employment in the Agreement-Employment (~2), Duties (~4), - 6 - Compensation (il5), Benefits (~6) and Term (~il3, 7)- are between only BBNY and Ms. Johnson. BBi is apparently only included for litigation purposes. (R:71-76). The Agreement is remarkably one-sided. It purports to allow the employee to be terminated at will with or without cause at any time, yet still be subject to a two year restrictive covenant. (Agreement, at ~7 [R:72]). "Cause," is not defined. (Id.). It provides for no severance or post-employment benefits whatsoever (id.), yet it seeks to restrict Ms. Johnson for "two (2) years following termination of employment hereunder (whether voluntary or involuntary)" from soliciting, accepting, or servicing any customer or prospective customer ofBBNY, with no geographic limits, regardless whether Ms. Johnson had acquired any relationship with the customer through Plaintiffs. (R:73, 160). Notably, Plaintiffs require this same overbroad, anti-competitive restrictive covenant from all employees - irrespective of their duties or positions. (R:271 ). Finally, despite the fact that the Agreement concerns only the insurance business in New York and is expressly and admittedly between two New York entities, it purports to be governed by Florida law-the jurisdiction ofBBNY's non-signing parent, BBL (R:75).1 1 BBi is not a party to the provision ('i[18) concerning choice-of-law. (R:71; 72-74). - 7 - v. Ms. Johnson's Employment At BBNY. Ms. Johnson did for BBNY what she did for BlueCross - evaluated insurance costs and proposals from an actuarial point of view. (R:130). Ms. Johnson received no sales manuals, bidding instructions, or training seminars from BBNY. (Id.). Instead, Ms. Johnson performed her calculations and analyses with the skills developed through her actuarial work at BlueCross. (R:136). Plaintiffs concede that Ms. Johnson's actuarial ability, which she brought to BBNY, gave it a competitive advantage with large accounts. (R:359-60). However, other brokers, including Lawley, quickly followed suit by hiring persons with similar backgrounds. (R:360). Plaintiffs provided no training to Ms. Johnson. Plaintiffs' entire investment in Ms. Johnson's development over the course of her employment was limited to $469.93 for a general broker licensing course at Bryant & Stratton College in January 2007, and a licensure fee of$80.00 every two (2) years. (R:366). Ms. Johnson worked at BBNY for approximately 4~ years, and consistently received excellent reviews. (R:136). Ms. Johnson's 2010 review rated her at the highest level in all categories ("Exceptional"). (R:136, 150-53, 306-10). vi. Ms. Johnson's Involuntary Termination By BBNY. Ms. Johnson was involuntarily terminated on Friday, February 25, 2011. (R:139). When terminating Ms. Johnson, Ms. Taylor simply said "[i]t is apparent - 8 - we are not getting along so I have decided to let you go." (Id.). When terminating Ms. Johnson, neither Ms. Taylor nor Cynthia Smith (who was also present) stated that Ms. Johnson was being terminated "for cause," or that she had not followed orders, or that she had in any way not performed her job duties. (Id.). In fact, BBNY presented her with a proposed Separation Agreement and Release ("Separation Agreement") that does not claim that there was any cause for Ms. Johnson's dismissal, but instead offers Ms. Johnson $13,461.54 to release Plaintiffs. (R:139, 157-59). Ms. Johnson refused. (Id.). Ms. Johnson received standard unemployment benefits upon her termination from BBNY, benefits not commonly paid when someone is terminated for misconduct of any kind. (R:370). Ms. Johnson then immediately left the building. She left her work computer, and took nothing, other than the picture of her children. (R:140). Plaintiffs did not then claim that Ms. Johnson had taken any materials or demand the return of any items. (R:140, 371-72). vii. Ms. Johnson's Post-Termination Activities And Communications With Plaintiffs. Ms. Johnson was hired by Lawley effective March 21, 2011. (R:140). In April of 2011, Plaintiffs' senior litigation counsel wrote a letter to Ms. Johnson, which did not claim that Ms. Johnson had been dismissed for any type of cause. (R: 160-67). It did, however, claim that she could not directly or indirectly serve or solicit any BBNY customer or prospective customer for two years. (R: 160). - 9 - On April 15, 2011, Ms. Johnson's former counsel responded to Plaintiffs by letter, asserting that Plaintiffs could not enforce the Agreement because Ms. Johnson had been involuntarily terminated without cause and she had taken no materials. (R: 168). Plaintiffs received, but did not dispute or otherwise respond to this letter. (R:141). Notably, Plaintiffs made no demand to Ms. Johnson for the return of any specific item at any time. (R: 142). Nonetheless, Ms. Johnson did not solicit any of Plaintiffs' customers. (R:371). Any customers that eventually retained Lawley did so by their own decision to reach out to Lawley, not through any solicitation by Ms. Johnson. (Id.). B. Proceedings. i. Pleadings And Motions. On September 29, 2011, seven months after terminating Ms. Johnson, Plaintiffs commenced this action alleging four causes of action. The first cause of action was against Ms. Johnson only, for breach of the Agreement. (R:63-64). The second cause of action was against Ms. Johnson only, for misappropriation of confidential information. (R:64-65). The third cause of action was against Lawley and Ms. Johnson for tortious interference with prospective advantage/business relations. (R:65-67). The fourth cause of action was against Lawley for tortious inference with the Agreement. (R:67-69). - 10 - Ms. Johnson answered the complaint, and asserted several counterclaims. (R:77-86). Lawley also answered. (R:87-96). Plaintiffs moved to dismiss Defendants' counterclaims. Ms. Johnson thereafter served as of right an amended answer with amended counterclaims. (R:97-108). Lawley also served as of right an amended answer with counterclaim. (R: 109-20). Both Defendants cross- moved for summary judgment. Plaintiffs then withdrew their motion to dismiss. (See Memorandum Decision of the Supreme Court, Hon. John A. Michalek, J.S.C. (the "Trial Court") dated June 25, 2012 ("Decision") (R:19-20)). Plaintiffs served no discovery demands before or during the pendency of Defendants' summary judgment motion (discovery was not stayed during the pendency of the motion pursuant to Commercial Part Rule 11 [ d]). Nor did Plaintiffs ever claim they needed discovery to oppose Defendants' motion pursuant to CPLR 3212(f). Defendants, however, pursued discovery, including interrogatories, notices and requests for production, and requests for admission. (Compare R:258-358 [Plaintiffs' submissions in opposition to summary judgment, containing no discovery demands] with R: 197-248 [Plaintiffs' responses to Defendants' discovery demands]). ii. The Trial Court's Summary Judgment Decision And Order. The Trial Court initially determined that the Florida choice-of-law provision in the Agreement was unenforceable because the Agreement bore no reasonable -11 - relationship to the State of Florida, and thus determined that New York law would apply. (R:20-23). The Trial Court granted Defendants' motion for summary judgment with respect to Plaintiffs' first cause of action (against Ms. Johnson for breach of the Agreement), except to the extent that Plaintiffs could establish that Ms. Johnson traded on or used client relationships developed by Plaintiffs. (R:37). The Trial Court granted Defendants' motion with respect to Plaintiffs' second (theft of trade secrets against Ms. Johnson) and third causes of action (tortious interference with prospective business relations against both Defendants), and denied the motion with respect to Plaintiffs' fourth cause of action (against Lawley for tortious interference with the Agreement). (Id.). Defendants appealed (R:6-8) and Plaintiffs cross-appealed to the Appellate Division (R:9-11 ). iii. · The Appellate Division's Order. The Appellate Division, in a unanimous Order, modified the Trial Court order in several respects. It noted that for a choice-of-law clause to be enforced it must "bear[] a reasonable relationship to the parties or the transaction" and must not be "truly obnoxious" to New York's public policy. (Order, at p. 3 [R:591]). The Appellate Division disagreed with the Trial Court and held that there was a - 12 - reasonable relationship to Florida law because of the inclusion, however limited, of the Florida parent (BBi) in the Agreement. (Id.).i Nonetheless, the Appellate Division adhered to the Trial Col,lli's rejection of the Agreement's Florida choice-of-law clause because, after a thorough discussion of New York law and policy and the Florida Restraint of Trade Statute, the Appellate Division found that Florida law was truly obnoxious to New York public policy. (Order, at pp. 3-5 [R:591-93]). It first noted New York's strong public policy against restrictive covenants as enunciated by this Court. (Id. (citing BDO Seidman v. Hirschberg, 93 N.Y.2d 382 (1999); Reed Roberts Assoc. v. Strauman, 40 N.Y.2d 303, 307 (1976), rearg. den., 40 N.Y.2d 918 (1976); Purchasing Assoc. v. Weitz, 13 N.Y.2d 267, 272 (1963), rearg. den., 14 N.Y.2d 584 (1964); Columbia Ribbon & Carbon Mfg. Co. A-1-A Corp., 42 N.Y.2d 496, 499 (1999))). It then carefully considered the Florida Restraint of Trade Statute and determined that it violates fundamental New York public policy by (i) expressly prohibiting consideration of hardship to the employee; (ii) requiring that the court must construe the covenant in favor of finding it is reasonably necessary; and (iii) prohibiting the court from employing any rule of construction against such covenants. (Order, at pp. 3-5 [R:591-93]). Taking into consideration that "other 'J. The Appellate Division's holding on the reasonable relationship issue, as discussed below, finds no support in the Record. - 13 - [states'] courts similarly have determined that the Florida statute conflicts with the public policy of their respective states" (Order, at p. 5 [R:593] (citing cases)), the Appellate Division rejected Florida law and held that "the law of New York should govern this dispute." (Id.). The Appellate Division then considered: the non-solicitation covenant [which] purported to restrict Johnson from, inter alia, soliciting, diverting, servicing, or accepting, either directly or indirectly, 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 [the] Agreement for two years following the termination of Johnson's employment, without regard to whether Johnson acquired a relationship with those clients. (Order, at p. 6 [R:594]). It found the covenant overbroad under BDO: We conclude that the language of the non-solicitation covenant [above] renders it overbroad and unenforceable (see BDO Seidman, 93 N.Y.2d at 393; Scott, Stackrow & Co., C.P.A. 's, P.C., 9 A.D.3d at 806-807). (Order, at p. 6 [R:594] (citing BDO)). The Appellate Division then rejected Plaintiffs' request for partial enforcement, and granted summary judgment severing the non-solicitation covenant entirely. (Id.). In doing so, it expressly applied the factors set forth in BDO and its progeny concerning whether there should be partial enforcement. (Order, at p. 7 [R:595]). It noted that Ms. Johnson was not presented with the - 14 - Agreement until her first day of work after she left her previous employer; that she received no new benefit in exchange for the signing of it; that it was presented to her seven years after BDO, yet was clearly facially overbroad under BDO; and that Plaintiffs expressly anticipated its overbreadth and contractually required enforcement to the greatest extent possible. (Order, at pp. 6-7 [R:594-95]). The Appellate Division then restored Plaintiffs' claim of misappropriation/misuse of confidential/trade secret information, and the related tortious interference claim because, viewing the Record in the light most favorable to Plaintiffs, it determined there were issues of fact. (Order, at p. 8 [R:596]). ARGUMENT POINTI THE APPELLATE DIVISION CORRECTLY REJECTED THE AGREEMENT'S FLORIDA CHOICE-OF-LAW CLAUSE A. It Is Undisputed That The Appellate Division Correctly Determined That Florida Law On Restrictive Covenants Violates Fundamental New York Public Policy. The Appellate Division correctly determined that the Florida Restraint of Trade Statute [FLA. STAT. §542.355] violates New York public policy and that the Agreement's Florida choice-of-law clause is unenforceable. The public policy of New York concerning restrictive covenants is well- settled by this Court, and was directly cited and followed by the Appellate Division in the Order. In New York, post-employment restrictive covenants are strongly - 15 - disfavored "due to public policy considerations which militate against sanctioning the loss of a person's livelihood." Purchasing Assoc. v. Weitz, 13 N.Y.2d at 271; Reed, Roberts v. Strauman, 40 N.Y.2d at 307 (1976) (New York's public policy is rooted in the protection of an individual's fundamental right to work and earn a living, and also in the interest of society itself in a free and open marketplace); Order, at pp. 3-5 (R: 591-93). "So potent is this policy that covenants tending to restrain anyone from engaging in any lawful vocation are almost uniformly disfavored and are sustained only to the extent that they are reasonably necessary to protect the legitimate interests of the employer and not unduly harsh or burdensome to the one restrained." Order, at p. 3 (R: 591) (some emphasis in original) (quoting Post v. Merrill Lynch, Pierce, Fenner & Smith, 48 N.Y.2d 84, 86-87 (1979)). To effectuate New York's public policy, this Court set forth a three-pronged test: "[a] restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public." Order, at pp. 3-4 (R: 591-92) (quoting BDO, 93 N.Y.2d at 388-89). Each of these factors expresses New York public policy, as "[a] violation of any prong renders the covenant invalid." Id.; see also Post, 48 N.Y.2d at 86-87. - 16 - New York's public policy against restrictive covenants also requires courts to carefully scrutinize such agreements and narrowly construe them. Gramercy Park Animal Ctr., Inc. v. Nowicki, 41N.Y.2d874, 874-75 (1977); Order, at p. 4 (R: 592). In Gramercy, this Court stated that the strict interpretation of restrictive covenants is an expression of New York public policy. 41 N.Y.2d at 874-75. Florida's restrictive covenant law, by contrast, is contained in the Florida Restraint of Trade Statute. It eviscerates New York public policy because it "expressly forbids courts from considering the hardship imposed upon an employee in evaluating the reasonableness of a restrictive covenant." Order, at p. 4 (R: 592). Specifically, FLA. STAT. §542.335(1 )(g)(l) 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." (Emphasis added). The laws of Florida and New York do not merely conflict on this issue; the Florida statute abolishes a bedrock public policy factor mandated by this Court for any enforcement of a restrictive covenant in New York. The Florida Restraint of Trade Statute also violates New York public policy because it expressly forbids a court from narrowly and strictly construing a restraint: "A court shall not employ any rule of contract construction that requires the court to construe a restrictive covenant narrowly, against the restraint, or - 17 - against the drafter of the contract." FLA. STAT. §542.335(1)(h); see also Order, at p. 4 (R: 592). This is antithetical to fundamental New York public policy, stated by this Court, that restrictive covenants must be carefully scrutinized and narrowly and strictly construed. Gramercy, 41 N.Y.2d at 874-75. Indeed, the restriction imposed by the Florida statute on how this Court may exercise its review of a contract is unprecedented and unconstitutional. Not even the New York State Legislature could so restrict this Court's fulfillment of its duties. Notably, courts in five other states - Illinois, Alabama, Georgia, Tennessee, and Oklahoma - have already rejected the Florida Restraint of Trade Statute and refused to enforce Florida choice-of-law clauses for the same public policy reasons cited above, including cases involving BBL See Brown & Brown, Inc. v. Mudron, 379 Ill. App. 3d 724, 727-28 (Ill. App. Ct. 3d Dist. 2008) (rejecting BBI's Florida choice-of-law clause as violative of Illinois public policy); Brown & Brown, Inc. v. Ali, 592 F. Supp. 2d 1009 (N.D. Ill. 2009) (rejecting another attempt by BBi to enforce its Florida choice-of-law clause); see also Del Monte Fresh Produce, NA., Inc. v. Chiquita Brands lnt'l Inc., 616 F. Supp. 2d 805, 816-18 (N.D. Ill. 2009) (rejecting another Florida choice-of-law clause); Unisource Worldwide v. South Cent. Ala. Supply, 199 F. Supp. 2d 1194, 1201-02 (M.D. Ala. 2001) (Alabama rejecting Florida law); Carson v. Obar Holding Co., LLC, 318 Ga. App. 645 (Ga. Ct. App. 2012) (Georgia rejecting Florida law); Dill v. Continental Car Club, - 18 - Inc., No. E2013-00170-COA-R3-CV, 2013 WL 5874713, at *11-13 (Tenn. Ct. App. Oct. 31, 2013) (Tennessee rejecting Florida law); Southwest Stainless L.P. v. Sappington, No. 07-CV-0334-CVE-PJC, 2008 WL 918706 (N.D. Okla. Apr. 1, 2008) (Oklahoma rejecting Florida law). Plaintiffs do not mention these cases in their Brief, or their several failed attempts to enforce their Florida choice-of-law clause, much less attempt to distinguish them. Accordingly, the Appellate Division did not err in its unanimous determination that the Florida Restraint of Trade Statute violates New York public policy, and thereby aligned New York with the Courts in the five states that have already found Florida law to be obnoxious to their public policy. Notably, Plaintiffs do not even contest this point, and thereby concede it. (See Brief of Plaintiffs-Appellants ("Plaintiffs' Brief'), at pp. 5-6, 8, 24, 28-29, 31 [conceding that Plaintiffs do not challenge the public policies cited by the Appellate Division]). The alternative arguments Plaintiffs do raise, however, are meritless. B. Plaintiffs' Arguments That The Appellate Division Erred By Not Partially Applying The Florida Choice-Of-Law Clause Are Unpreserved And Without Merit. i. Plaintiffs Failed To Preserve Their Argument. This Court is generally limited to reviewing matters of law, N.Y. CONST. art. VI, §3(a); CPLR §5501(b), and may only consider issues raised below and - 19 - preserved for appeal. Bingham v. New York City Transit Authority, 99 N.Y.2d 355, 357 (2003) ("As we have many times repeated, this Court with rare exception does not review questions raised for the first time on appeal. Unlike the Appellate Division, we lack jurisdiction to review unpreserved issues in the interest of justice."); Haynes v. Haynes, 83 N.Y.2d 954, 957 (1994) ("[N]othing in the record before us establishes that defendant raised the specific objections he now advances, and, thus, the claims were not preserved for our review."); Cooper v. City of New York, 81N.Y.2d584, 588 (1993) (refusing to consider argument raised for the first time before the Appellate Division) (superseded by statute on unrelated grounds). More specifically, this Court will not hear a legal argument that a party raised for the first time in a motion for reargument. Salina v. Cimino, 1 N.Y.3d 166, 173 (2003) ("[p]reemption was not raised in the petition, or before Supreme Court. Petitioner raised preemption for the first time in his motion for 'reargument and/or renewal,' which Supreme Court denied. Neither court below having addressed preemption, we will not be the first to do so.") (emphasis added); Simpson v. Loehmann, 21N.Y.2d990, 991 (1968). Of course, an order denying reargument is not appealable; only an order granting reargument is appealable. Rosen v. Rosenholc, 303 A.D.2d 230, 230 (1st Dep't 2003). Petitioners in this case have been granted permission to appeal to this Court by the Appellate Division. Permissive appeals may be taken to the Court of - 20 - Appeals where the Appellate Division certifies a question of law, "but in such case the appeal shall bring up for review only the question or questions so certified." N.Y. CONST. art. VI, §3 (emphasis added). This Court has refused to perceive the certification procedure as authority to answer questions not expressly decided below. See Mary Lincoln Candies, Inc. v. Dep 't of Labor, 289 N.Y. 262, 265-66 (1942) (refusing to answer certified question not reached by the courts below); Dillon v. Spilo, 275 N.Y. 275, 280 (1937) ("We limit our decision to the questions determined in the court below."). Accordingly, where the certified question is presented in the broad form - i.e., where the question asks whether the Appellate Division order was "properly made" - the "usual practice" of this Court is to interpret the certification to raise only the question of law explicitly decided by the Appellate Division which it "evidently intended to certify." See Patrician Plastic Corp. v. Bernadel Realty Corp., 25 N.Y.2d 599, 604 (1970). Here, the principal issue Plaintiffs seek to present to this Court - that the Florida choice-of-law clause may be partially applied with respect to the mandatory blue-penciling sub-section of the Florida Restraint of Trade Statute (Plaintiffs' Brief, at pp. 28-33)-was never raised below except in Plaintiffs' motion for reargument to the Appellate Division. (Compare Addendum to Brief of Plaintiffs-Appellants: ("Plaintiffs' Add.:") 25-56, 127-86, 187-234, 312-346 [Plaintiffs' principal briefs] with Addendum to Brief of Defendants-Respondents: - 21 - ("Defendants' Add.:") 64-66 [Plaintiffs' motion for reargument papers raising new partial application of choice-of-law clause issue]). Tellingly, Plaintiffs do not claim otherwise in the section of their Brief entitled "Preservation of Questions For Review." (Plaintiffs' Brief, at pp. 9-11). The passages cited by Plaintiffs do not even remotely suggest, much less preserve for appeal, Plaintiffs' new and distinct argument that the Florida choice-of-law clause may still be partially applied if Florida law violates fundamental New York public policy. Moreover, the Appellate Division expressly denied Plaintiffs' motion for reargument, refused to consider this new issue, and, in granting permission to appeal to the Court of Appeals, certified the question for review as follows: "Were the orders of this Court entered February 7, 2014, properly made?" (R:586-87 (emphasis added)). The February 7, 2014 orders did not include an express determination on this issue, because Plaintiffs did not raise the argument until their unsuccessful motion for reargument. The Appellate Division could not have made an order relating to partial application in its February 7, 2014 orders, did not intend for this new issue to be certified, and the issue is outside the scope of the certified question this Court can review. See Patrician Plastic Corp., 25 N.Y.2d at 604. Accordingly, because it was not raised below except on reargument and was not part of the certification to this Court, Plaintiffs' argument that the Florida choice-of-law clause may be partially applied is not properly before this Court. - 22 - ii. There Is No Basis For Partial Application Of The Florida Choice-Of-Law Clause. a. There Is No Precedent For Partial Application And No Basis To Do So Here. A contractual choice-of-law provision will not be honored where the law of the chosen state violates a fundamental public policy of New York. Welsbach Elec. Corp. v. MasTec N. Am. Inc., 7 N.Y.3d 624, 630 (2006); Fox v. Ashland Oil, Inc., 134 A.D.2d 850, 850 (4th Dep't 1987). Such fundamental public policy may be found "in the State Constitution, statutes and judicial decisions." Cooney v. Osgood Machinery, Inc., 81N.Y.2d66, 78 (1993) (citations omitted). Plaintiffs' initial contention that New York's fundamental public policy does not extend to employment issues is spurious, and their citation to Boss v. Am. Exp. Fin. Advisors, Inc., 15 A.D.3d 306, 308 (1st Dep't 2005) for that proposition is highly disingenuous. (See Plaintiffs' Brief, at p. 26 ("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")). First, as this Court made clear, Boss involved the enforcement of a forum selection clause, and the issue of public policy with respect to choice-of-law was expressly not decided: Plaintiffs also argue that the wage deductions were in contravention of Labor Law § 193(1), § 198-c, and 12 NYCRR 195.1, and unreasonable, unjust and contrary to the public policy concerns of New York. ... As a result - 23 - of these provisions ofNew York law, plaintiffs argue that defendants should not be able to enforce the forum selection clause. Plaintiffs argument, however, is misdirected. The issue they raise is really one of choice of law, not choice of forum; it is the choice of law clause that, according to plaintiffs, may not be enforced ... We express no opinion on the merits of plaintiffs' argument. It could and should have been made to a court in Minnesota-the forum the parties chose by contract. If New York's interest in applying its own laws to this transaction is as powerful as plaintiffs contend, we cannot assume that Minnesota courts would ignore it, any more than we would ignore the interests or policies of the State of Minnesota where they were implicated. In short, objections to a choice of law clause are not a warrant for failure to enforce a choice of forum clause. Boss v. Am. Express Fin. Advisors, Inc., 6 N.Y.3d 242, 246-47 (2006) (emphasis in original). In other words, far from stating that employment law does not implicate public policy, this Court in Boss explicitly recognized that it could, but simply did not need to reach the issue because the case concerned a forum selection clause. Second, the issue in Boss - the amount of business deductions - is hardly the same as New York's fundamental public policy disfavoring restrictive covenants. Here, as the Appellate Division correctly recognized, the Florida Restraint of Trade Statute is antithetical to fundamental New York public policy. Desperate to evade New York public policy, Plaintiffs now argue that this Court may "partially apply" the Florida choice-of-law clause so as to enforce the mandatory blue- penciling sub-section of the Florida statute [FLA. STAT. §542.335(1)(c)]. (Plaintiffs' Brief, at pp. 28-33). That argument fails on every level. - 24 - First, Plaintiffs' argument violates the most basic tenet of New York's contractual choice-of-law analysis, which is to choose the single jurisdiction whose substantive law should apply. Zurich Ins. Co. v. Shearson Lehman Hutton, 84 N.Y.2d 309, 317 (1994); Appalachian Ins. Co. v. Gen. Elec. Co., 20 Misc. 3d 1122(A), *7 (N.Y. Sup. Ct. 2008) ("If GE's [theory] is adopted, it will be necessary to apply the law of multiple states to the same issues and contracts. This is contrary to well-established New York law that requires courts to apply the law of the one state with the most significant contacts to the dispute.") (emphasis added); FC Bruckner Assocs., L.P. v. Fireman's Fund Ins. Co., 95 A.D.3d 556, 557 (1st Dep't 2012) ("If [plaintiffs'] position were accepted, the result would be a single policy governed by the laws of different states -precisely what Foster Wheeler sought to avoid. Moreover, applying multiple states' laws to the enforcement of a single [agreement] defies ... the law ... as well as the traditional concerns of judicial economy and uniformity."); Wausau Bus. Ins. Co. v. Horizon Admin. Servs. LLC, 803 F. Supp. 2d 209, 215-16 (E.D.N.Y. 2011) ("[the parties] cite no precedent for applying multiple states' laws to a single [agreement], and I have found none either."). The rationale is obvious: applying the substantive law of multiple states to the same cause of action is unwieldy, burdensome, eliminates uniformity in the application of both states' laws, and the contracting parties could - 25 - not possibly have agreed to the retroactive application of a judicially created, hybrid combination of two different states' substantive laws.1 Indeed, New York Courts have routinely applied New York law to all issues in a cause of action after determining that the law chosen in a choice-of-law clause violates New York public policy; even to those issues that were not explicitly stated to encompass New York public policy. For example, in American Exp. Travel Related Servs. Co. v. Assih, 26 Misc. 3d 1016, 1024-25 (N.Y. Sup. Ct. 2009), the parties' Utah choice-of-law clause violated the New York public policy embodied in General Obligations Law §5-501, Banking Law §14-a(l), and Penal Law§ 190.40. The Court did not reject only that part of Utah law and apply others; it rejected Utah law entirely and applied New York law to all remaining issues, including an issue concerning New York General Obligations Law §5-511, which the Court did not explicitly state was a public policy of New York. Id. 1 It is true that a New York court may apply its own procedural law, while applying the substantive law of a different state. Educ. Res. Institute, Inc. v. Piazza, 17 A.D .3 d 513, 513 (2d Dep't 2005) ("[U]nder common law rules matters of procedure are governed by the law of the forum. On the other hand, matters of substantive law fall within the course chartered by choice of law analysis. New York courts therefore apply contractual choice of law clauses only to substantive issues.") (internal citations omitted). It is also true that New York courts may apply the substantive law of different states to separate causes of action within one lawsuit. See Plymack v. Copley Pharm., Inc., 1995 WL 606272, at *5 (S.D.N.Y. 1995) (Under New York Law, "[a] contractual choice of law provision ... does not bind the parties with respect to non- contractual causes of action."). But Plaintiffs can cite no case where a New York Court has mixed-and-matched various parts of the substantive laws of two different states within the same contractual cause of action. As noted above, New York Courts have routinely rejected such an argument. - 26 - Similarly, in the companion cases of Clifton Steel Corp. v. Gen. Elec. Co., 80 A.D.2d 714 (3d Dep't 1981) and Clifton Steel Corp. v. Gen. Elec. Co., 80 A.D.2d 715 (3d Dep't 1981), the Court held that Connecticut law violated the New York public policy embodied in Lien Law §34. The Court rejected the parties' Connecticut choice-of-law clause in its entirety, and applied New York law to all remaining issues, even an issue concerning Lien Law§ 12-a(2) which the Court did not explicitly state was a public policy. Clifton, 80 A.D.2d at 715. Simply put, New York courts reject contractual choice-of-law clauses in their entirety when any New York public policy is violated, without searching for some aspect of the foreign law that purportedly does not involve New York public policy. Not surprisingly, Plaintiffs do not (and cannot) cite a single case that actually supports their remarkable position. There is no precedent in New York where a Court has rejected a contractual choice-of-law clause, and then revived it for some other aspect of a contract claim. Plaintiffs' reliance on Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34 (1961) and Schultz v. Boy Scouts of Am., 65 N.Y.2d 189 (1985) for the proposition that this Court should reject some parts of Florida's statutory scheme, but accept others (Plaintiffs' Brief, at p. 27), is entirely misplaced. Kilberg and Schultz are distinguishable because they involved choice-of-law determinations in tort actions, where no contractual choice-of-law clauses were involved. In Kilberg, this Court held that Massachusetts law, being - 27 - the place of injury, applied, but in view of New York's public policy against limiting death action damages, treated "the measure of damages as being a procedural or remedial question controlled by our own state policies." 9 N.Y.3d at 41-42 (emphasis added). Similarly, Schultz addressed whether to apply New Jersey's charitable immunity rule, another procedural/remedial question.1 As noted above, the decision whether to apply another state's procedural versus substantive law is clearly distinguishable from mixing the substantive laws of two different states within the same contractual cause of action. Plaintiffs' reliance on Hugh O'Kane Elec. Co., LLC v. MasTec N. Am., Inc., 19 A.D.3d 126, 127 (1st Dep't 2005) is equally misplaced. There, the Court merely enforced a choice-of-law clause; it did not reject the clause as to certain issues, and partially apply it with respect to others. And contrary to Plaintiffs' mischaracterization of the Restatement (Second) of Conflict of Laws §187 (Plaintiffs' Brief, at p. 27), that section states that a choice-of-law clause is unenforceable if it violates "a" public policy of a state; not that every issue must be a public policy. 1 This Court's reference in Schultz to the application of a "portion" of foreign law, which Plaintiffs take out of context (Plaintiffs' Brief, at p. 27), was a clear reference to the distinction between the enforcement of procedural versus substantive law. It has no relevance to the different issue of a contract choice-of-law analysis. - 28 - Plaintiffs' argument also fails for practical reasons. The blue-penciling sub- section of the Florida statute is not a stand-alone provision, but part of a single, comprehensive statute designed to make all aspects of employment agreement law favor employers. The Florida statute violates New York public policy as a whole, and its sub-sections fall together. In sum, the Appellate Division correctly declined to enforce the Florida choice-of-law clause to any extent, and followed New York's well-settled choice- of-law analysis for contracts by applying the law of the single jurisdiction with the most significant relationship to the Agreement, New York. There is no support for Plaintiffs' argument that a choice-of-law clause may be partially applied, and no basis to modify the Order. b. The Other States To Consider The Florida Restraint Of Trade Statute Have Rejected Florida Law In Toto. Other jurisdictions that have rejected the Florida Restraint of Trade Statute as violative of their public policy have refused to enforce any aspect of it. In Unisource Worldwide v. South Cent. Ala. Supply, 199 F. Supp. 2d 1194 (M.D. Ala. 2001 ), the Court held that the Florida Restraint of Trade Statute violated Alabama public policy, rejected the parties' Florida choice-of-law clause in its entirety, and did not enforce any aspect of Florida law. Id. at 1199-1202. The Court in Brown & Brown, Inc. v. Mudron, 379 Ill. App. 3d 724, 727-28 (Ill. App. Ct. 3d Dist. 2008) similarly rejected BBI's Florida choice-of-law clause in its entirety, and - 29 - applied Illinois law to every issue in the case, even those issues (such as the requirement for adequate consideration) that the Court did not explicitly describe to be a public policy of Illinois. Id.; see also Brown & Brown, Inc. v. Ali, 592 F. Supp. 2d 1009, 1046 (N.D. Ill. 2009) (rejecting the Florida statute in its entirety and applying the Illinois standard whether to modify/partially enforce the restraint); Del Monte Fresh Produce, N.A., Inc. v. Chiquita Brands Int'! Inc., 616 F. Supp. 2d 805, 818 (N.D. Ill. 2009) (same); Dill v. Continental Car Club, Inc., No. E2013-00170-COA-R3-CV, 2013 WL 5874713, at *13-18 (Tenn. Ct. App. Oct. 31, 2013) (rejecting the Florida statute in its entirety and applying the Tennessee standard whether to modify/partially enforce the restraint). In fact, in Carson v. Obor Holding Co., LLC, 318 Ga. App. 645, 659 (Ga. Ct. App. 2012), the Court expressly considered FLA. STAT. §542.335(1)(c) and held that its requirement that courts modify, rather than invalidate, any overbroad covenants was itself against public policy. Id. In sum, courts in other states have refused to partially apply a Florida choice-of-law clause. Thus, not only does New York law not permit partial application of choice-of-law clauses, but there is no persuasive authority to do so. - 30 - iii. The Florida Blue-Penciling Sub-Section Itself Violates New York Public Policy. a. The Florida Blue Penciling Sub-Section Violates New York Public Policy Because It Still Prohibits Consideration Of Hardship To The Employee And Bars The Court From Narrowly Construing The Restraint. As demonstrated above, there is no basis to partially apply Florida law. But the clause Plaintiffs seek to except from rejection is equally obnoxious, and Plaintiffs are equally wrong, even ifthe blue-penciling sub-section [FLA. STAT. §542.335(1)(c)] is viewed apart from the rest of the Florida statute. Contrary to Plaintiffs' argument that the specific public policies cited by the Appellate Division (that the court must consider hardship to the employee and narrowly construe the restraint) have "no application" to the partial enforcement analysis (Plaintiffs' Brief, at p. 29), New York's public policy fully extends to that issue. Indeed, even in the limited circumstances where partial enforcement is allowed, an overbroad restrictive covenant is enforced only to the extent permitted by the public policies of this state. If the extent to which Florida law enforces r restrictive covenants violates New York public policy - which the Appellate Division correctly ruled it does here -then Florida's partial enforcement sub- section also violates New York public policy. This is borne out by the plain language of the Florida blue-penciling sub- section: - 31 - ( c) A person seeking enforcement of a restrictive covenant also shall plead and prove that the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction. If a person seeking enforcement of the restrictive covenant establishes prima facie that the restraint is reasonably necessary, the person opposing enforcement has the burden of establishing that the contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the established legitimate business interest or interests. If 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 necessary to protect such interest or interests. (Emphasis added). Even when examined independently, this clause violates New York public policy because it exclusively considers the alleged legitimate business interests of the former employer, and omits any consideration of hardship to the employee.~ New York public policy requires courts to consider hardship to the employee even when the employer has demonstrated a sufficiently broad legitimate business interest. BDO, 93 N.Y.2d at 388-89 ("A violation of any prong renders the covenant invalid."). By precluding any consideration of this factor, the Florida blue-penciling sub-section forces a New York court to partially enforce an overbroad restraint more broadly than New York public policy allows. ~Plaintiffs concede this in their Brief. (See Plaintiffs' Brief, at pp. 34-35). In the section arguing for partial enforcement under Florida law, Plaintiffs abruptly drop the fa9ade that the Florida blue-penciling sub-section accounts for undue hardship (it does not), and argue instead that this Court should exclusively consider their alleged legitimate business interests. (Id.). - 32 - In sum, the public policies cited in the Order are fully applicable to the issue of partial enforcement, and the Florida blue-penciling sub-section violates New York public policy for the same reasons stated in the Order. b. There Is No Precedent To Pluck And Apply A Few Words From A Foreign Statute And No Basis To Do So Here. Recognizing that the Florida blue-penciling sub-section violates New York public policy even when considered alone, Plaintiffs next contend that this Court may partially apply six words of it ("a court shall modify the restraint"), and then tack on New York law concerning the permissible scope of a restrictive covenant. (Plaintiffs' Brief, at pp. 28-33). That argument is absurd. As demonstrated above, there is no precedent in New York for the partial application of a choice-of-law clause to any extent, much less authority for a court to selectively apply a few words from a foreign statute in conjunction with the remainder of New York substantive law. Moreover, Plaintiffs' proposal violates the basic policy goals underlying New York's choice-of-law analysis. First, the "law" that Plaintiffs ask this Court to apply simply does not exist. It is not New York law, which (as set forth more fully below) requires the Court to consider the "conduct of the employer in imposing the terms of the agreement" before any partial enforcement may be allowed. BDO, 93 N.Y.2d at 394. Nor is it Florida law, which prohibits any consideration of hardship to the employee (among other violations ofNew York - 33 - public policy). Plaintiffs are thus not requesting a choice of law; they are attempting to create a new, hybrid law. That is the province of the Legislature, and this Court should decline Plaintiffs' invitation to judicially create new law. Second, Ms. Johnson never agreed to and cannot be bound by the retroactive application of a newly-created, hybrid law . .Q Third, Plaintiffs' argument would eliminate uniformity and predictability in the application of both New York and Florida law. New York's choice-of-law jurisprudence encourages these goals, because the analysis is plainly binary - either the law of the chosen state will apply, or, if the choice-of-law clause fails (which Plaintiffs concede is a possibility accepted by all contracting parties (Plaintiffs' Brief, at p. 49)), the law of the state with the most significant relationship to the agreement will apply (here, New York). Allowing courts to mix-and-match various parts of multiple states' laws would subject parties to uncertainty and unpredictability. In sum, there is no precedent or basis for the partial application of a choice- of-law clause to any extent, much less in the manner Plaintiffs now suggest. .Q It can hardly be said that she considered and agreed to anything in the Agreement under the circumstances in which she was required to sign it. (See supra, at pp. 46-60). - 34 - c. The Mandatory Language Of The Florida Blue-Penciling Sub-Section Also Violates New York Public Policy By Prohibiting Judicial Discretion. Even assuming the public policy analysis permits the partial application of a few words taken from the Florida blue-penciling sub-section (it does not), the mandatory nature of that clause independently violates New York public policy. Absent the judicial discretion to refuse partial enforcement, this Court has recognized that "employers will use their superior bargaining position to impose unreasonable anti-competitive restrictions, uninhibited by the risk that a court will void the entire agreement, leaving the employee free of any restraint." BDO, 93 N.Y.2d at 394. To enforce this public policy, a court must focus "on the conduct of the employer in imposing the terms of the agreement." Id. Partial enforcement may only be justified if an employer demonstrates, in addition to a legitimate business interest, "an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct." Scott, Stackrow & Co. v. Skavina, 9 A.D.3d 805, 807-808 (3d Dep't 2004), Iv. denied, 3 N.Y.3d 612 (2004) (citing BDO, 93 N.Y.2d at 394). "Factors weighing against partial enforcement are the imposition of the covenant in connection with hiring or continued employment - as opposed to, for example, imposition in connection with a promotion to a position of responsibility and trust - the existence of coercion or a general plan of - 35 - the employer to forestall competition, and the employer's knowledge that the covenant was overly broad." Id. at 807 (citing BDO, 93 N.Y.2d at 395). The Florida Restraint of Trade Statute vitiates this fundamental public policy of New York by requiring that "a court shall modify the restraint." FLA. STAT. §542.335(1)(c) (emphasis added). In other words, so long as there is some legitimate business interest supporting the restriction, a court applying Florida law must blue-pencil an overbroad restrictive covenant, no matter how egregiously an employer engaged in overreaching, coercion, or anti-competitive misconduct. The rather obvious effect is that employers are encouraged to engage in overreaching; the employer has nothing to lose, and benefits from a facially overbroad restrictive covenant unless an employee risks the expenses of litigation. This result is absolutely forbidden by the public policy embodied in New York's partial enforcement analysis, which serves as a critical deterrent against employer overreaching. See BDO, 93 N.Y.2d at 394. In fact, in telling this Court what type of order it must issue, the Florida statute exceeds what the New York Legislature could do and violates the New York Constitution. Neither the legislature nor any other body may limit, impair or circumscribe the constitutional powers of the court to determine cases within its jurisdiction. Pollicina v. Misericordia Hosp., 82 N.Y.2d 332, 338-39 (1993). - 36 - Given this clear authority, Plaintiffs cannot seriously contend that mandatory partial enforcement under Florida law is "fully aligned with New York law from a policy perspective." (Plaintiffs' Brief, at p. 29). New York public policy requires courts to consider "the conduct of the employer in imposing the terms of the agreement"; Florida law expressly forbids it. New York public policy forbids partial enforcement where an employer engages in overreaching; Florida law requires partial enforcement no matter how egregious the employer's conduct. New York public policy discourages overreaching by retaining the judicial discretion to deny partial·enforcement; Florida law encourages overreaching by removing judicial discretion, and thus any consequences to the employer. The policies of New York and Florida are diametrically opposed. Compare BDO, 93 N.Y.2d at 394 with FLA. STAT. §542.335(1 )( c ). Plaintiffs, however, contend that Florida law does not offend New York public policy because "[b ]oth jurisdictions permit partial enforcement." (Plaintiffs' Brief, at p. 29). That grossly oversimplifies the law. New York permits partial enforcement, but only when the court is convinced that the employer did not engage in overreaching. Skavina, 9 A.D.3d at 807-08. Nor is partial enforcement "routinely applied by [New York] courts." (Plaintiffs' Brief, at p. 29). New York courts routinely reject partial enforcement, and in circumstances far less egregious than those here. (See infra, at pp. 53-54). - 37 - This issue is not, as Plaintiffs contend, a mere "distinction in evidentiary requirements rather than a core policy difference."1 (Plaintiffs' Brief, at p. 30 (emphasis added)). Florida has completely eliminated the courts' discretion to deny partial enforcement based on the circumstances of the case. Absent that discretion, courts cannot deter employers from engaging in overreaching in the first place, defeating a fundamental New York public policy. The problem is not solved by Plaintiffs' observation that under Florida law, partial enforcement is permitted only to the extent of the former employer's legitimate business interests. (Plaintiffs' Brief, at pp. 30-33). In New York, of course, no enforcement is permitted absent a legitimate business interest. But New York public policy mandates another protection to employees, that the employer must demonstrate "an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct" in addition to a legitimate business interest. Skavina, 9 A.D.3d at 807-08. Plaintiffs' remaining arguments appear to challenge the Appellate Division's ruling that the Florida Restraint of Trade Statute violates the New York public policies specifically cited in the Order- namely, the consideration of hardship to the employee. (Plaintiffs' Brief, at pp. 31-33). These arguments should not even 1 Indeed, Plaintiffs subsequently concede in their Brief that "Florida law requires no evidentiary showing as to the employer's conduct." (Plaintiffs' Brief, at p. 34 (emphasis added)). - 38 - be considered, as Plaintiffs concede throughout their Brief that they do not challenge that part of the Order in this appeal. (Id., at pp. 5-6, 8, 24, 28-29, 31). In any event, Plaintiffs' belabored arguments do not alter the conclusion that Florida law violates New York public policy.~ The conflict between New York and Florida law concerning the reasonableness of a restrictive covenant is not merely a "difference in emphasis of factors." (Plaintiffs' Brief, at p. 31 (emphasis added)). New York law expressly requires consideration of hardship as a matter of public policy; Florida law expressly forbids any consideration of that factor. Plaintiffs are not being candid when they attempt to suggest that Florida courts consider hardship in the manner required by New York public policy. (Plaintiffs' Brief, at pp. 32-33). The cases cited by Plaintiffs actually confirm that Florida law violates New York public policy. In Austin v. Mid State Fire Equip. of Cent. Florida, Inc., 727 So. 2d 1097, 1098 (Fla. Dist. Ct. App. 5th Dist. 1999), the Court declined to enforce a restrictive covenant because it was broader than necessary to protect the former employer's legitimate business interests, not because it caused hardship to the employee. Hardship was not even mentioned, ~Plaintiffs cite the article Restrictive Covenants: Florida Returns To The Original "Unfair Competition" Approach For The 21st Century, 70-NOV Fla. B.J. 53 (Nov. 1996) for the proposition that the Florida Restraint of Trade Statute is reasonable and fair. They fail to mention that the article was co-authored by John A. Grant, Jr., the Senate sponsor of the Florida Restraint of Trade Statute, and Thomas T. Steele, its principal drafter - hardly an objective analysis of a statute that was rejected in its entirety by five other states before the Appellate Division had the opportunity to do so. - 39 - much less considered by the Court. Id.; see also GPS Indus., LLC v. Lewis, 691 F. Supp. 2d 1327, 1336 (M.D. Fla. 2010) (declining to enforce a restrictive covenant because it was broader than the employer's legitimate interests, not considering whether it would cause hardship to the employee); Party Lite Gifts, Inc. v. MacMillan, 895 F. Supp. 2d 1213, 1227 (M.D. Fla. 2012) (same). Plaintiffs' recycled reliance on Edwards v. Harris, 964 So. 2d 196, 197 (Fla. Dist. Ct. App. 1st Dist. 2007) fares no better the second time around. (See Plaintiffs' Brief, at p. 33). As the Appellate Division correctly held, Edwards is distinguishable because there, the court relied on a case decided before the Florida Restraint of Trade Statute became effective. Order, at p. 5 (R: 593 ).2 Plaintiffs conveniently ignore that every other Florida court to have addressed this issue has flatly refused to consider hardship to the employee. See Atomic Tattoos, LLC v. Morgan, 45 So. 3d 63, 66 (Fla. Dist. Ct. App. 2d Dist. 2010) (refusing to consider economic hardship to the employee); DePuy Orthopaedics, Inc. v. Waxman, 95 So. 3d 928, 940 (Fla. Dist. Ct. App. 1st Dist. 2012) (same); Medi-Weight/ass Franchising USA, LLCv. Sadek, No. 8:09-cv-2421-T-24MAP, 2010 WL 1837767, *7 (M.D. Fla. Mar. 11, 2010) (same); Medi-Weight/ass Franchising USA, LLC, v. Medi-Weight/ass Clinic of Boca Raton, LLC, No. 8:11-cv-2437-T-30MAP, 2012 2 Exch. Int'!, Inc. v. Vacation Ownership Relief LLC, No. 6:10-cv-1273-0rl-35DAB, 2010 WL 4983669, at *8 (M.D. Fla. Oct. 27, 2010), which merely cites Edwards, also fails. - 40 - WL 260902, at *9 (M.D. Fla. Jan. 3, 2012) (same); N. Am. Prods. Corp. v. Moore, 196 F. Supp. 2d 1217, 1231 (M.D. Fla. 2002) (same). In sum, the application of any part of FLA. STAT. §542.335 would violate fundamental New York public policy and the Constitutional powers of this Court by requiring the Court to blue-pencil a facially overbroad restrictive covenant, thereby encouraging employers to overreach without fear of judicial consequences. C. The Order's Rejection Of Florida Law Should Also Be Affirmed On The Basis That Florida Law Lacks A Reasonable Relationship To The Agreement. An appellate court may affirm an order on any alternative grounds raised in the record before the trial court. See Town of Massena v. Niagara Mohawk Corp., 45 N.Y.2d 482, 488 (1978). Here, the Order's rejection of the Florida choice-of- law clause can also be based on the lack of a reasonable relationship to Florida. A contractual choice-of-law provision will not be honored where the jurisdiction whose law is to be applied has no reasonable relationship to the agreement. See Culbert v. Rois Cap. Co., 184 A.D.2d 612, 613 (2d Dep't 1992). As discussed below, the Record establishes that BBi was not a party to the Agreement. Nonetheless, even where one party is domiciled in the state of the selected law, that alone does not satisfy the reasonable relationship test. Am. Home Assurance Co. v. Hapag Lloyd Container Linie, GMBH, No. 03 CV 5462, 2004 WL 1616379, at *4 (S.D.N.Y. Jul. 19, 2004) ("The fact that defendant is a - 41 - corporation formed under the laws of the state selected in the choice of law provision is not, alone, enough to trigger the provision."); Gen. Motors Corp. v. Fiat S.P.A., No. 08 Civ. 4999(DAB), 2009 WL 5088739, at *2 (S.D.N.Y. Dec. 17, 2009) (applying New York law, despite Switzerland choice-of-law provision where there were insufficient contacts with Switzerland); Am. Equities Group, Inc. v. Ahava Dairy Prods. Corp., No. 01 Civ. 5207(RWS), 2004 WL 870260, at *8 (S.D.N.Y. Apr. 23, 2004) (no reasonable relationship with New Jersey where the only contacts were that New Jersey was the plaintiffs principal place of business and the agreement was delivered to the plaintiff in New Jersey); Clever Ideas v. 9999 Restaurant Corp., 2007 WL 3234747 (N.Y. Sup. Ct. N.Y. Cty., Commercial Division, Oct. 12, 2007) (no reasonable relationship where only contact was that plaintiff was an Illinois corporation). Here, the Appellate Division's finding of a reasonable relationship was based on items not present in the Record. The Appellate Division held: The Agreement stated that it was "made and entered into by and among [BBi], a Florida corporation ('Parent'), [BBNY], a New York corporation (collectively with Parent, the 'Company'), and [Johnson], a resident of the State of New York." Plaintiffs submitted evidence that BBi directed sales strategies, set sales goals, and provided promotional and educational material for BBNY. Plaintiffs also submitted evidence that Johnson's salary was administered in Florida and paid from a Florida bank account, and that Johnson and her supervisor traveled to Florida to attend training sessions and meet the BBi employees. - 42 - (Order, at p. 3 [R:591]). Initially, the Appellate Division's treatment ofBBI as a party and as the "Company" in the Agreement is contrary to the Record. The Agreement itself confirms that only BBNY was Ms. Johnson's employer. Under "Definitions", it makes clear that the "Company" that employs the "Employee" is only "Brown & Brown ofNew York Inc.", except for paragraph 8-11 of the Agreement. (R:71 ). Thus, all aspects of employment in the Agreement (~~2-7) are between only BBNY and Ms. Johnson. In fact, Plaintiffs' senior litigation counsel acknowledged that the Agreement was only with BBNY. (R:160). It is undisputed that BBI never signed the Agreement until, if at all, August 2010, four years after Ms. Johnson and only four months before BBNY terminated her employment. (R:282-83). All of these undisputed facts were noted by the Trial Court in finding no reasonable relationship to Florida law. (R:20-23). The Appellate Division's holding that BBI "directed sales strategies, set sales goals, and provided promotional and educational material" (Order, at p. 3 [R: 591]).is similarly without support in the Record. Despite being in exclusive possession of any applicable records, Plaintiffs did not submit any sales strategies, goals or other directives issued by BBI to BBNY, any promotional or educational materials issued by BBI to BBNY, or any other documents to support that claim. The alleged payment of Ms. Johnson's salary from a Florida bank account is also without support in the Record. Plaintiffs' sole support for that claim is a document - 43 - described only as an "earnings statement", which explicitly states that it is not a check or payment of any kind. (R:267, 292). Moreover, although the statement is from December 2010, it clearly does not describe Ms. Johnson's salary earnings for 2010 (as the Trial Court aptly observed). (R:22-23). The only "checks" in the Record state they were paid from the "Brown & Brown of NY, Inc. [BBNY] Operating Account", not BBi. (R:294, 300). Even assuming payments were drawn from a Florida bank, that is an arbitrary "contact" that does not create a relationship between Florida and the Agreement. See Order, at p. 3 (R: 591).10 Finally, the one-time trip to Florida where Ms. Johnson trained Plaintiffs' employees (not the other way around), which was not part of her normal job duties, did not create the requisite reasonable relationship. (R:71, 135, 364). In truth, New York was the place of contracting (R:253), the place of contract negotiation (id. at 133-34, 252-53), and the exclusive location for both contract performance and the subject matter of the contract (R:71-76, 249-50, 353, 362). All that is left is the mere fact that non-signer BBi is domiciled in Florida, which is insufficient to create a reasonable relationship with Florida law. lQ Courts have expressly cautioned against the use of such "make-weights" (i.e., meaningless contacts). See Fireman's Fund Ins. Co. v. Schuster Films, Inc., 811 F. Supp. 978, 984 (S.D.N.Y. 1993) (holding that the location of the bank from which a check is drawn or sent is not a proper "contact" for purposes of choice-of-law analysis). - 44 - Accordingly, the Court may affirm the rejection of the Florida choice-of-law clause on the alternative basis that there is no reasonable relationship with Florida. D. Plaintiffs' Request For Affirmative Relief On Appeal Should Be Rejected. Plaintiffs' contention that they are entitled to a ruling that partial enforcement is warranted is not only without merit, it is improper because Plaintiffs did not move for summary judgment and fail to cite any authority that would permitthem to obtain affirmative relief on an appeal from Defendants' motion. (See Plaintiffs' Brief, at pp. 34-35). Moreover, Plaintiffs would never be entitled to simply forbid Ms. Johnson from soliciting any customer she had worked with (see Plaintiffs' Brief, at pp. 34- 35), because that still ignores the consideration of undue hardship. Ms. Johnson is not a general insurance agent. Her specialty, and years of experience, is based upon the underwriting and actuarial aspects of insurance plans for large employer accounts. (R:132-33). There are few such large employers in Western New York to be serviced. (R:361). In a previous brief, Plaintiffs tacitly conceded the crushing anti-competitive effect of the Agreement by suggesting that Ms. Johnson leave the insurance business entirely and "return to her established career as an actuary." (Plaintiffs' Add.:170). Thus, as the Appellate Division correctly recognized, there is no difference to Ms. Johnson between a non-compete and a non-solicit/service clause. See - 45 - Order, at pp. 4-5 (R: 592-93). Enforcement of the clause would effectively exclude Ms. Johnson from servicing large employers in the Western New York area (her only clientele ), a result that would cause hardship to both her and the entire community. R:132-33, 360-61; Reed Roberts Assocs., 40 N.Y.2d at 307. POINT II THE APPELLATE DIVISION DID NOT ABUSE ITS DISCRETION IN REFUSING TOP ARTIALLY ENFORCE PLAINTIFFS' RESTRICTIVE COVENANT A. This Court's Review Is Limited To Whether The Appellate Division Abused Its Discretion As A Matter Of Law. This Court can review matters of discretion "only where there is an abuse of discretion as a matter of law." DeZimm v. Connelie, 64 N.Y.2d 860, 862 (1985). Once this Court determines that the Appellate Division did not abuse its discretion as a matter of law, "further consideration of plaintiffs arguments is beyond [this Court's] review power." Pavlou v. City of New York, 8 N.Y.3d 961, 963 (2007); see also Holterman v. Holterman, 3 N.Y.3d 1, 15 (2004); Cohen and Karger, The Powers of the New York Court of Appeals, at p. 578.11 11 In the absence of a specification of findings of fact in the order granting appeal or the order appealed from, this Court shall presume the factual issues were determined in favor of the respondent in this Court. See CPLR 5612(b). Where the Appellate Division has certified a question of law which also rests, in the alternative, on an issue of discretion or fact, the issue of law will not be decisive. See Patrician Plastic Corp. v. Bernadel Realty Corp., 25 N.Y.2d 599, 604-05 (1970). - 46 - On an abuse of discretion review, "[t]he test generally appears to be whether the particular exercise of discretion is so arbitrary and without rational basis as to amount to abuse as a matter of law, or whether 'the result reached is so outrageous as to shock the conscience'." Cohen and Karger, The Powers of the New York Court of Appeals, at p. 579 (citing Matter of Von Bulow, 63 N.Y.2d 221, 225-26 (1984)). Here, there was not even error, let alone an abuse of discretion. B. The Appellate Division Did Not Abuse Its Discretion In Refusing To Partially Enforce The Overbroad Restrictive Covenant. As the Appellate Division recognized, the decision whether to partially enforce an overbroad restrictive covenant is a matter of judicial discretion. "As the Court of Appeals wrote in BDO Seidman, it previously 'expressly recognized and applied the judicial power to sever and grant partial enforcement for an overbroad employee restrictive covenant,' and the decision whether to do so is left to the discretion of the court after 'a case specific analysis' (93 N.Y.2d at 394)." Order, at p. 7 (R: 595); see also AM Medica Commc 'ns Grp. v. Kilgallen, 26 l F. Supp. 2d 258, 263 (S.D.N.Y. 2003), aff'd, 90 F. App'x 10 (2d Cir. 2003) (declining to exercise discretion to blue-pencil because the contract overreached). Here, the Appellate Division simply substituted is discretion (denying any enforcement of the restrictive covenant) for that of the Trial Court. Thus, there is nothing for this Court to review on the partial enforcement issue. Levo v. Greenwald, 66 N.Y.2d 962, 963 (1985) ("Although the Appellate Division order recited that the reversal - 47 - was 'on the law,' the decision makes plain that the appellate court substituted its discretion for that of the trial court. In such circumstances, there is no question of law for our review.") (citations omitted). Here, Plaintiffs' failure to even mention the abuse of discretion standard in their Brief, much less contend that the Appellate Division abused its discretion on this issue, requires affirmance. DeZimm, 64 N.Y.2d at 862 ("As an exercise of discretion, the determination of the Appellate Division will be disturbed by this court only where there is an abuse of discretion as a matter of law - a contention not urged by petitioner here. We therefore affirm.") (internal citations omitted). In any event, Plaintiffs' arguments are devoid of merit. Initially, Plaintiffs improperly attempt to flip the burden onto Defendants by suggesting that partial enforcement is refused only when it is "decisively clear" that an employer engaged in overreaching. (Plaintiffs' Brief, at p. 38). In truth, it is Plaintiffs' burden to decisively prove the absence of overreaching, dominant use of bargaining power, or other anti-competitive misconduct. BDO, 93 N.Y.2d at 394; Skavina, 9 A.D.3d at 807-08. It is undisputed that Plaintiffs engaged in overreaching, as the non- solicit/service covenant is facially overbroad. It has no geographical limitations and purports to restrict Ms. Johnson from soliciting Plaintiffs' entire customer base and prospective clients, whether or not her direct, substantive work acquired a - 48 - customer relationship. See R:72-73; Order, at p. 6 (R: 594); BDO, 93 N.Y.2d at 393. Plaintiffs' argument thus fails on its face, as an overbroad covenant may never be partially enforced if it is an "essential part of the agreed exchange." BDO, 93 N.Y.2d at 394-95; Fullman v. R&G Brenner Income Tax Consultants, 24 Misc. 3d 1214(A), at *6 (N.Y. Sup. Ct. 2009). Here, Plaintiffs concede they considered the restrictive covenants an essential part of the Agreement. (R:271 ). Contrary to Plaintiffs' argument that partial enforcement would require "nothing more than a limited blue-penciling of the provision's language" (Plaintiffs' Brief, at p. 40), the Court would have to re-write the covenant in its entirety and insert new substantive terms, such as geographical limitations and the identity of specific customers that would be restricted. Courts have routinely denied partial enforcement based on the judicial reluctance to rewrite and retroactively apply a restrictive covenant "that the court, and not the parties themselves, has deemed reasonable." Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC, 813 F. Supp. 2d 489, 508-09 (S.D.N.Y. 2011); Crippen v. United Petroleum Feedstocks, Inc., 245 A.D.2d 152, 153 (1st Dep't 1997).12 Desperate to escape the consequences of their overreaching, Plaintiffs offer only three reasons why the Order should be modified. Each of these arguments is 12 Plaintiffs also contend that blue-penciling the restrictive covenant would not impose hardship on Ms. Johnson's ability to earn a living - an argument already disposed of above. (See supra, at pp. 45-46). - 49 - inaccurate, disingenuous, and misconstrues the applicable legal standards set forth in BDO, Skavina, and their progeny. i. The Appellate Division Correctly Considered Plaintiffs' Use Of Dominant Bargaining Power In Imposing The Restrictive Covenant As An Initial Condition Of Ms. Johnson's Employment. Plaintiffs' first argument, that the Appellate Division should not have considered the timing of Plaintiffs' imposition of the restrictive covenants upon Ms. Johnson, fails on its face. (See Plaintiffs' Brief, at pp. 41-44). The Appellate Division was required to consider whether the restraint was imposed "in connection with hiring or continued employment - as opposed to, for example, imposition in connection with a promotion to a position of responsibility and trust." Skavina, 9 A.D.3d at 807-08; BDO, 93 N.Y.2d at 395. Here, the fact that Ms. Johnson was not informed of the restrictive covenants until her first day of work confirms that the restraints were imposed in connection with her initial hiring. Plaintiffs' argument is also disingenuous, because the Appellate Division did not automatically deny partial enforcement simply because Ms. Johnson received the Agreement on her first day of work. Plaintiffs coyly omit the full reasoning of the Appellate Division: "[h]ere, it is undisputed that Johnson was not presented with the Agreement until her first day of work with plaintiffs, after Johnson already had left her previous employer." Order, at p. 7 (R: 595) (emphasis added). - 50 - As the Appellate Division correctly recognized, the facts establishing Plaintiffs' use of dominant bargaining power and anti-competitive misconduct are undisputed. Plaintiffs recruited Ms. Johnson but never told her that she would have to sign restrictive covenants, and carefully avoided showing her the Agreement until her first day of work. (R:l34). Plaintiffs induced Ms. Johnson to leave her employment at BlueCross by offering her a position at BBNY, which she accepted - again without any mention that she would have to sign restrictive covenants. (Id.). When Ms. Johnson reported for her first day of work, Plaintiffs sprung their trap. Knowing full well that the terms of her employment had been finalized (without any mention of restrictive covenants), and that Ms. Johnson had already left her previous employer on that basis (leaving her without options), Plaintiffs abruptly told Ms. Johnson, for the first time, that she would have to sign the Agreement with its restrictive covenants before she could begin work. (R:134- 35, 271). In other words, Plaintiffs lured Ms. Johnson into the worst negotiating position possible, and then used their dominant bargaining power to take advantage of her by imposing unreasonable restrictive covenants after she had already left her prior job and had no choice but to accept them. Plaintiffs' vague claim that Ms. Johnson could have negotiated (unidentified) terms of the Agreement is misleading. (Plaintiffs' Brief, at p. 43). Plaintiffs offer no evidence that Ms. Johnson (or any employee) had the bargaining - 51 - power to negotiate away the restrictive covenants - the only term of the Agreement relevant here. In fact, Plaintiffs have gone on record that they would have never given Ms. Johnson the materials necessary to perform her job- and thus she could not begin work - unless she agreed "to the covenants in the Employment Agreement." (R:269-71). Plaintiffs' attempt to call this conduct "good faith" is all the more shocking, given their admission that they force all their employees to sign the same facially overbroad restrictive covenants as an initial condition of employment, even long after Plaintiffs were put on notice that their "legitimate interests", if any, were far more limited. R:282; BDO, 93 N.Y.2d at 395; Skavina, 9 A,D.3d at 808-09. Plaintiffs do not even attempt to address (and disingenuously omit from their description of the Order) other anti-competitive conduct cited by the Appellate Division, such as the fact that Ms. Johnson did not receive any benefit in exchange for signing the restrictive covenants beyond her continued employment. Order, at p. 7 (R: 595). Plaintiffs' one-time payment of $469.93 for Ms. Johnson's broker license (R:304) and payment of an $80.00 licensure fee once every two years is not the amount or type of benefit required to justify a restraint, i.e., "a promotion to a position of responsibility and trust." Skavina, 9 A.D.3d at 807. Nor were those payments made in exchange for the restrictive covenants; Ms. Johnson's compensation was finalized before Plaintiffs changed the deal on her first day by - 52 - requiring restrictive covenants. Plaintiffs further demonstrated their anti- competitive intent by attempting to enforce overbroad restrictive covenants against Ms. Johnson after unilaterally terminating her employment. See R:139; 160; Genesee Valley Trust Co. v. The Waterford Group, LLC, Index No. 2011-07672, at p. 5 (N.Y. Sup. Ct. Dec. 19, 2013) (employer's attempt to enforce overbroad restrictive covenants on employee that it had unilaterally terminated constituted overreaching and warranted denial of partial enforcement ).11 The cases cited by Plaintiffs are inapposite, because those employers did not induce the employee to leave her former employment, and only then reveal that restrictive covenants would be required. (See Plaintiffs' Brief, at p. 42 (citing cases)). Moreover, courts have routinely denied partial enforcement on facts far less egregious than those here. In Gilman & Ciocia, Inc. v. Randel/a, the Court denied partial enforcement simply because the covenant as a whole overreached. 24 Misc. 3d 1216(A), at *3 (N.Y. Sup. Ct. 2007) ("The restrictive covenant at issue herein does not contain a geographical limitation, the time limit is for three years and prohibited [the employee] from soliciting the accounting firm's entire client base, all factors which militate against partial enforcement."); see also Vital Crane 11 There is no truth to Plaintiffs' suggestion that they only attempted to enforce the restrictive covenants to the extent of their alleged legitimate business interests. (Plaintiffs' Brief, at p. 39). In their April 4, 2011 letter (R:160-61), Plaintiffs threatened Ms. Johnson not to work with any of Plaintiffs' current or prospective customers, regardless whether she had developed a substantial relationship with the customer through BBNY. Plaintiffs not only overreached in drafting and imposing the restrictive covenants, they overreached in enforcing them. - 53 - Servs., Inc. v. Micucci, 118 A.D.3d 1404 (4th Dep't 2014) (requiring employee to sign employment agreement containing restrictive covenants as an initial condition of continued employment is alone sufficient to deny partial enforcement); Fullman, 24 Misc. 3d 1214(A) at *6 (declining partial enforcement where the former employer imposed the restrictive covenant as an initial condition of employment); Elexco Land Servs., Inc. v. Hennig, No. 11-CV-00214(A)(M), 2011WL9368970, at *4-5 (W.D.N.Y. Dec. 28, 2011) (declining partial enforcement simply because the covenant as a whole overreached); Earthweb, Inc. v. Schlack, 71 F. Supp. 2d 299, 313 (S.D.N.Y. 1999) (same); Pure Power Boot Camp, Inc., 813 F. Supp. 2d at 509 (denying partial enforcement where restraint was drafted by employer's attorneys, and employee was required to sign agreement as a condition of continued employment). In sum, the Appellate Division properly considered the timing of the imposition of the restraints, and given the undisputed proof that Plaintiffs used dominant bargaining power and coercive tactics against Ms. Johnson, it did not abuse its discretion in declining to permit partial enforcement. ii. Plaintiffs Were On Notice That The Restrictive Covenant Was Overbroad. The crux of Plaintiffs' next argument is that they could not have planned to evade the requirements of BDO, or violate the public policy of New York, because they relied upon Florida law. Plaintiffs never raised this argument below except in - 54 - their motion for reargument. (Compare Plaintiffs' Add., passim with Defendants' Add.:61-62). The Appellate Division denied reargument, refused to consider this new argument, and limited the certified question to the orders made on February 7, 2014. (R:586-87). Accordingly, the argument may not be considered now. In any event, Plaintiffs' claim that they were unaware of BDO is spurious. It is undisputed in the Record that BBNY is a New York company operating essentially only in New York with New York employees (including Ms. Johnson) and licensed to engage in the insurance business in New York with the New York Department of Financial Services. (R:249-50; 353). Thus BBNY is required to comply with New York law. Moreover, BDO has been cited hundreds of times in courts throughout the country, including Florida and in cases involving Plaintiffs. See Brown & Brown, Inc. v. Ali, 494 F. Supp. 2d 943, 951 (N.D. Ill. 2007), citing Merrill Lynch Pierce Fenner & Smith v. Dunn, 191 F. Supp. 2d 1346, 1353 (M.D. Fla. 2002), citing BDO, 93 N.Y.2d at 382. Plaintiffs' assertion that they did not "have any reason to believe that New York law would be applicable to the Agreement's enforcement" (Plaintiffs' Brief, at p. 47) is incredible, given their admission a couple pages later that "any choice- of-law provision does create the narrow possibility that a given state will find one or more provisions of the chosen law to be unenforceable." (Plaintiffs' Brief, at - 55 - p. 49). Given the overwhelming contacts with New York, Plaintiffs knew full that New York law could apply. In fact, Plaintiffs not only anticipated that New York law would apply, they prepared for it. Plaintiffs admit that, in "recognHion of this possibility" [that New York law would apply] (see Plaintiffs' Brief, at p. 49 (emphasis added)), they included a severability clause in the Agreement, which Plaintiffs concede is a prerequisite for partial enforcement under New York, but not Florida law (id. at p. 50). As proven by their own words and conduct, Plaintiffs anticipated that New York law would apply, prepared for New York to apply, and cannot now feign ignorance of New York law, such as BDO and its progeny.14 Even assuming that Plaintiffs only anticipated Florida law (they did not), they still imposed the restraint on Ms. Johnson knowing full well that it was overbroad. Plaintiffs concede that, even under Florida law, their alleged legitimate business interests extend only to the customers that Ms. Johnson closely worked with - not to every current and potential customer, without any geographical restraints, as imposed by the Agreement. (Plaintiffs' Brief, at pp. 34-35). 14 The Appellate Division correctly recognized that Plaintiffs cannot take advantage of New York law by including a severability clause in the Agreement (a New York requirement), and simultaneously feign ignorance of New York restrictive covenant law in the vain hope of avoiding a determination that the restrictive covenant was imposed "knowing full well that it was overbroad." Order, at p. 7 (R: 595). - 56 - Plaintiffs therefore not only knew that the restrictive covenant was overbroad under New York law, they knew it was overbroad even under Florida law. In fact, the only honest position Plaintiffs can take is that they did not plan to avoid only BDO. Plaintiffs clearly planned to evade employee-protective laws of every state by including BBi as an unnecessary party to an agreement it had no need to be a part of, except to attempt to foist the.heavy-handed Florida Restraint of Trade Statute on residents of other states. (R:250, 253, 353, 355). Perhaps the most obvious evidence that BBI's inclusion in the Agreement was a blatant end- run to avoid New York law is the undisputed fact that BBi is not even licensed to do insurance business in New York. (R:250, 353; see also Insurance Law § 1102). That BBi could not even legally engage in the subject matter of the contract only confirms that its inclusion was pure pretext to take advantage of the anti- competitive Florida Restraint of Trade Statute. Accordingly, Plaintiffs' claim that they were not trying to evade BDO- just all employee protective laws - hardly establishes an abuse of discretion and provides no basis to modify the Appellate Division's Order. iii. The Appellate Division Correctly Analyzed The Severability Clause. Plaintiffs next contend that the Appellate Division created a categorical rule that the inclusion of a severability clause in an employment agreement - 57 - automatically constitutes bad faith. (Plaintiffs' Brief, at pp. 48-51). The Appellate Division did no such thing. In truth, Plaintiffs argued before the Appellate Division that the mere inclusion of the severability clause in the Agreement automatically warranted partial enforcement. That argument has been flatly rejected by this Court (BDO), by the Third Department ($kavina), and every court since. See, e.g., Heartland Sec. Corp. v. Gerstenblatt, No. 99 CIV 3694 WHP, 2000 WL 303274, at *9-10 (S.D.N.Y. Mar. 22, 2000) (declining partial enforcement even though a severability clause provided that the court could enforce the covenant to the extent found reasonable). The Appellate Division correctly followed this settled authority and held that the severability clause did not automatically require partial enforcement; not that it automatically prohibited partial enforcement. This is obvious from the Order: "Contrary to plaintiffs' further contention, the fact that the Agreement contemplated partial enforcement does not require partial enforcement of the non-solicitation covenant... Furthermore, allowing a former employer the benefit of partial enforcement of overly broad restrictive covenants simply because the applicable agreement contemplated partial enforcement would eliminate consideration of the factors set forth by the Court of Appeals in [BDO]." Order, at p. 7 (R: 595) (citing BDO, 93 N.Y.2d at 394) (emphasis added). - 58 - Plaintiffs' allegation that the Appellate Division pronounced a categorical rejection of severability clauses is also bizarre, considering that the Appellate Division applied the severability clause in the Agreement by severing the unenforceable non-solicit/service clause and allowing the case to continue with respect to the confidentiality and employee non-inducement clauses. (See id. ("We therefore conclude that the non-solicitation covenant should not be partially enforced and must be severed from the agreement.") (emphasis added; citations omitted)). After spending much of their Brief pontificating on severability clauses, Plaintiffs conclude they are necessary "to ensure that a ruling invalidating a portion of an agreement will not vitiate the agreement as a whole." (Plaintiffs' Brief, at pp. 48-49). Here, rather than reject the entire Agreement as it could have done, the Appellate Division severed only the unenforceable non-solicit/service portion. To do so was not an abuse of discretion. In any event, Plaintiffs' argument is not properly before this Court, because it does not involve a decisive question of law. See Rosemont Enters., Inc. v. Irving, 41N.Y.2d829, 830 (1977) (question of law is not decisive where the Appellate Division determination could tum exclusively or alternatively on an exercise of discretion). Even assuming Plaintiffs are correct (they are not), they would not be entitled to a reversal because the Appellate Division based its denial of partial - 59 - enforcement on numerous alternative grounds involving the exercise of discretion, as described above. (See supra, at pp. 46-57). C. The Appellate Division's Order Should Also Be Affirmed On The Grounds That The Agreement Is Unenforceable Due To The Absence Of A Mutuality Of Obligation With Ms. Johnson. As noted above, an appellate court may affirm an order on any alternative grounds raised in the record before the trial court. Town of Massena, 45 N.Y.2d at 488. Here, the one-sided nature of the Agreement and Ms. Johnson's involuntary termination provides an alternative basis to affirm the Order. As this Court has recognized, the fundamental policy of New York State, and the interests a Court must balance in determining whether to enforce a restrictive covenant to any extent, require a mutuality of obligation: Acknowledging the tension between the freedom of individuals to contract, and the reluctance to see one barter away his freedom, the State enforces limited restraints on an employee's employment mobility where a mutuality of obligation is freely bargained for by the parties. An essential aspect of that relationship, however, is the employer's continued willingness to employ the party covenanting not to compete. Where the employer terminates the employment relationship without cause, however, his action necessarily destroys the mutuality of obligation on which the covenant rests as well as the employer's ability to impose a forfeiture. Post, 48 N.Y.2d at 89; see also Morris v. Schroder Cap. Mgmt. Int'!., 7 N.Y.3d 616, 621 (2006) (citing Post). - 60 - The Appellate Division, however, held that the principle expressed in Post - requiring a mutuality of obligation to enforce a restrictive covenant - applies only to forfeiture for competition clauses, and that involuntary termination was only relevant in a balancing of the equities context for an injunction motion. Order, at pp. 5-6 (R: 593-94). Defendants respectfully contend that was error. While the Appellate Division correctly noted that the "employee choice" doctrine set forth in Post and Morris only directly applies in benefit forfeiture cases, that does not render the mutuality of obligation required by Post inapplicable here. Indeed, even viewing the "mutuality of obligation" language in Post as dicta, as the Appellate Division suggests, suchjudicial dicta from this Court is still entitled to substantial deference. See Gimbel Bros. v. White, 256 A.D. 439, 442 (3d Dep't 1939) (recognizing discussion was dicta, but noting that it clearly pronounced Court of Appeals' interpretation of law and was entitled to great weight); Koslow v. Morrison, 4 Misc. 2d 158, 161 (Sup. Ct. Kings Cty. 1956); People v. Cascia, 191 A.D. 376, 384 (2d Dep't 1920) (dissent). Thus, most courts have held (until the Appellate Division's Order) that involuntary termination without cause bars the enforcement of any alleged restrictive covenants.12 12 See e.g., Grassi & Co, CPAs, P.C. v. Janover Rubinoff, LLC, 82 A.D.3d 700, 702 (2d Dep't 2011); Scott v. Beth Israel Med. Ctr., 41A.D.3d222, 224 (1st Dep't 2007); Arakelian v. Omnicare Inc., 735 F. Supp. 2d 22, 41 (S.D.N.Y. 2010); SIFCO Indus., Inc. v. Advanced Plating Techs., Inc., 867 F. Supp. 155, 158 (S.D.N.Y. 1994); In re UFG Int'l, Inc., 225 B.R. 51, 55-56 - 61 - The Appellate Division's logic on this point also fails to withstand examination. It concedes that a termination without cause prohibits an employer from enforcing a forfeiture even when the employee is competing, but it would allow a two (2) year foifeiture of income where Ms. Johnson receives no compensation from Plaintiffs. That result is contrary to all precedent and makes no sense. Nor is there any logic to considering involuntary termination on an injunction motion, but not in a damages suit, as the Appellate Division held. Order, at pp. 5-6 (R: 593-94). It may be correct that "a per se rule that involuntary termination without cause renders all restrictive covenants unenforceable" is not warranted. Order, at p. 5 (R: 593). However, based on the precedent of this Court, whether there is a mutuality of obligation should be a substantial factor to consider in any enforcement. And here, the facts establish that Plaintiffs lack the mutuality of obligation required to enforce the Agreement's restrictive covenants. Affirming the Order under these facts would only incentivize employers to do exactly what Plaintiffs did in this case; require all new employees to sign restrictive covenants for no extra compensation of any kind and then, whenever convenient for the employer, terminate them and cripple their ability to earn a living. (S.D.N.Y. 1998); cf Evolution Mkts, Inc. v. Penny, 23 Misc. 3d 1131(A), 2009 WL 1470451, at *18 (N.Y. Sup. Ct. May 20, 2009). - 62 - Accordingly, this Court may affirm the Order on the alternative basis that Plaintiffs lack the mutuality of obligation to enforce the restrictive covenants.16 POINT III THE APPELLATE DIVISION DID NOT ABUSE ITS DISCRETION IN DENYING PLAINTIFFS' BELATED AND BASELESS CLAIM THAT THEY REQUIRED DISCOVERY Plaintiffs' final argument, that Defendants' motion for summary judgment was premature (Plaintiffs' Brief, at pp. 52-54), does not warrant serious consideration. The Appellate Division certainly did not abuse its discretion as a matter of law in rejecting this argument, because it was improperly raised for the first time on appeal and has no merit. Similarly, the Appellate Division's determination that Plaintiffs waived any claim of prematurity (Order, at p. 2 [R: 590]), was also no abuse of discretion. The determination of whether a summary judgment motion is premature is a matter of discretion. Nadeau v. Connell, 243 A.D.2d 1009, 1010 (3d Dep't 1997) (holding that Supreme Court did not abuse its discretion in granting summary 16 Here, the undisputed facts establish that Ms. Johnson was involuntarily terminated without cause. The reviews of Ms. Johnson proved that her performance was "exceptional" (R:309-1 O; 369-70); when terminating Ms. Johnson, BBNY did not even suggest that it was for cause (R: 139); the proposed Separation Agreement that BBNY presented to Ms. Johnson does not even suggest that there was any cause for her termination but offered Ms. Johnson $13,461.54 to release BBNY (R:157-9), see Arakelian, 735 F. Supp. 2d at 29 (granting summary judgment to employee and finding that she was not terminated for cause where employer offered her a severance agreement to release it); and Ms. Johnson received unemployment benefits upon termination from BBNY, which she would not have had she been terminated for cause (R:370), see Labor Law §593(3), In re Fishman, 268 A.D.2d 651, 651-52 (3d Dep't 2000). - 63 - judgment despite plaintiffs claim for additional discovery); Mazzaferro v. Barterama Corp., 218 A.D.2d 643, 644 (2d Dep't 1995) (same). Similarly, the Appellate Division's determination that an argument has been waived and that it will not excuse the waiver is also a matter of discretion. Bradley v. Benchmark Mgt. Corp., 294 A.D.2d 879, 880 (4th Dep't 2002); see also Arrow Comm 'n Labs. v. Pico Prods., 206 A.D.2d 922, 923-24 (4th Dep't 1994). Although the Appellate Division retains the power to consider unpreserved arguments, whether to do so is a matter of discretion. See Progressive Cas. Ins. Co. v. Baker, 290 A.D.2d 676, 677 (3d Dep't 2002). A. Plaintiffs' Argument Regarding The Alleged Need For Discovery Was Improperly Raised For The First Time On Appeal. A party opposing summary judgment based on the alleged need for discovery must demonstrate "from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated." CPLR 3212(f). If additional discovery was essential to Plaintiffs' opposition, their remedy was to raise the argument before the Trial Court under CPLR 3212(f)-not to request a second bite at the apple after the decision did not go their way. As the Appellate Division correctly recognized, Plaintiffs failed to argue before the Trial Court that additional discovery was needed, and failed to satisfy any of the requirements of CPLR 3212(f). R:258-358 (containing Plaintiffs' submissions to the Trial Court); Order, at p. 2 (R: 590). Accordingly, the - 64- Appellate Division did not abuse its discretion by declining to consider the argument for the first time on appeal. Order, at p. 2 (R: 590). B. · The Appellate Division Correctly Rejected Plaintiffs' Argument. Even assuming Plaintiffs' argument was preserved (it was not), whether to deny a motion for summary judgment as premature is a matter of discretion. The Appellate Division did not abuse its discretion (and was correct under any analysis), because Plaintiffs failed to demonstrate that Defendants possessed facts essential to Plaintiffs' opposition, any such facts would have been within Plaintiffs' exclusive possession, and Plaintiffs never attempted to obtain discovery. i. Plaintiffs Failed To Seek Discovery Below. Contentions that a summary judgment motion should be denied as premature are summarily rejected where the non-movant did not even attempt to obtain the very discovery it later claims it needed. See Meath v. Mishrick, 68 N.Y.2d 992, 994 (1986); Elmont Open MRI & Diagn,astic Radiology, 30 Misc. 2d 126(A), 2010 N.Y. Slip Op. 52223(U) (N.Y. Sup. Ct. App. Term 2010). Here, the Record demonstrates that any purported lack of discovery was the result of Plaintiffs' own inaction. Plaintiffs contend that no meaningful discovery had been conducted (Plaintiffs' Brief, at pp. 52-54), but fail to mention they did not receive any documents because they did not request discovery of any kind. (R:258-358 (Plaintiffs' submissions in opposition to summary judgment, - 65 - containing no discovery demands)). In stark contrast, Defendants diligently sought discovery, including interrogatories, notices for discovery and prodqction, and a notice to admit. (R:l 74-248 (containing Plaintiffs' responses to Defendants' discovery demands)). In sum, the Appellate Division did not abuse its discretion because any purported lack of discovery was due solely to Plaintiffs' dilatory conduct. ii. Plaintiffs Failed To Demonstrate That Facts Essential To Their Opposition Existed Within Defendants' Exclusive Possession. It is well-settled that summary judgment is not premature merely because discovery has not yet been conducted. M&T Bank v. HR Staffing Solutions, Inc., 106 A.D.3d 1498, 1499-1500 (4th Dep't 2013); CPLR 3212(±). A party opposing summary judgment may not simply claim it needs discovery; it must identify exactly what discovery it needs and establish that it is in the movant's possession. Wright v. Shapiro, 16 A.D.3d 1042, 1043 (4th Dep't 2005) (mere hope that additional evidence will be uncovered is insufficient); Welch Foods, Inc. v. Wilson, 277 A.D.2d 882, 883 (4th Dep't 2000) (conclusory statements are insufficient). Here, Plaintiffs failed to demonstrate that "facts essential to their opposition [of the motion] may exist" in Defendants' exclusive possession, requiring further discovery. CPLR 3212(±). To the contrary, the essential facts entitling Defendants to summary judgment are uncontroverted. (See supra, at pp. 46-60). - 66 - Plaintiffs' newly-minted claim that they need discovery concerning the "facts and circumstances surrounding the signing of the Employment Agreement" (see Plaintiffs' Brief, at pp. 52-54) is incredible, given that any relevant information would necessarily be in Plaintiffs' exclusive possession.17 Any information related to Ms. Johnson's recruitment would be in Plaintiffs' possession because Ms. Johnson dealt directly with Plaintiffs and had no counsel. (R:l32). Any information related to the drafting of the Agreement would be in Plaintiffs' possession, because they alone drafted it. (R:l34-35). Any information related to Plaintiffs' hiring practices and their general plan of coercion and anti-competitive conduct against employees would be in their possession. Any information related to BBNY's presentation of the Agreement to Ms. Johnson on her first day of work would be in Plaintiffs' possession. Indeed, Plaintiffs' alleged need for discovery is contradicted by their submission of the affidavits of Cynthia Smith and Linda Taylor, which Plaintiffs represented to be the full and complete version of events relevant to Ms. Johnson's hiring. (R:264-66, 279-81, 260 (see il15 (Plaintiffs' Trial Court counsel describing the affidavits of Ms. Taylor and Ms. Smith as "detailed" and without any hint that additional discovery was necessary))). 17 There is no basis for delaying summary judgment where the evidence the non-movant needs is presumably in its own possession. Heritage Hills Society, Ltd v. Heritage Dev. Group, Inc., 56 A.D.3d 426, 426 (2d Dep't 2008). - 67 - The only specific item of discovery that Plaintiffs claim is necessary, a deposition of Ms. Johnson, is a red herring. (See Plaintiffs' Brief, at pp. 53-54). Contrary to Plaintiffs' mischaracterization of her affidavit (id. at p. 54), Ms. Johnson affirmed under oath that the Agreement was coercive, for the many reasons cited above. (See supra, at pp. 46-60; R:133-35).li Plaintiffs' vain hope that Ms. Johnson could say in a deposition that she was not coerced (despite having already affirmed in her affidavit that she was), is baseless speculation. See Zinter Handling, Inc. v. Britton, 46 A.D.3d 998, 1001 (3d Dep't 2007) (rejecting claim that deposition was required and granting summary judgment holding that restrictive covenant was unenforceable ).19 The Appellate Division did not abuse its discretion here. li Plaintiffs' suggestion that Ms. Johnson was required to state ultimate legal conclusions in her affidavit, such as that "the Agreement was legally onerous", is without merit. (See Plaintiffs' Brief, at p. 54). Nor would Plaintiffs be permitted to seek such legal conclusions in a deposition. Lobdell v. South Buffalo Railway Co., 159 A.D.2d 958, 958 (4th Dep't 1990). 19 Plaintiffs' reliance on Globaldata Mgt. Corp. v. Pfizer Inc., No. 60050612005, 2005 WL 3487845 (N.Y. Sup. Ct. Nov. 23, 2005) is misplaced. The Globaldata Court denied a motion to dismiss because there was no presentation of any facts and circumstances concerning the imposition of the restrictive covenant. Id at * 5-6. Here, Defendants made a motion for summary judgment and, as demonstrated above, both sides presented the relevant facts and circumstances to the Trial Court. - 68 - CONCLUSION For the reasons set forth above, Defendants respectfully request that the Appellate Division's Order be affirmed and that Plaintiffs' appeal be dismissed, as well as such other and further relief as the Court deems just under the facts and circumstances of this case. Dated: October 3, 2014 Preston~. Zar oc , Esq. William J. Simon, Esq. Attorneys for Defendants-Respondents One Canalside 125 Main Street Buffalo, NY 14203-2887 (716) 84 7-8400 - 69 -