Brown & Brown, Inc., et al., Appellants,v.Theresa A. Johnson, et al., Respondents. (AD No. CA 13-00340)BriefN.Y.May 6, 2015APL-2014-00103 To be Argued by: THOMAS J. CAHILL (Time Requested: 20 Minutes) Erie County Clerk's Index No. I2011-605320 Appellate Division, Second Department Docket No. CA-13-00340 Q!ourt of 1\ppeats nf tire ~tate of New tork -------.et.------- BROWN & BROWN, INC. and BROWN & BROWN OF NEW YORK, INC., Plaintiffs-Appellants, -against- THERESA A. JOHNSON and LAWLEY BENEFITS GROUP, LLC, Defendants-Respondents. REPLY BRIEF OF PLAINTIFFS-APPELLANTS LITILER MENDELSON, P.C. 900 Third A venue New York, New York 10022 Tel.: (212) 583-9600 Fax: (212) 832-2719 SATIERLEE STEPHENS BURKE & BURKE LLP 230 Park Avenue, Suite 1130 New York, New York 10169 Tel.: (212) 818-9200 Fax: (212) 818-9606 -and- WARD GREENBERG HELLER & REIDY LLP 300 State Street Rochester, New York 14614 Tel.: (585) 454-0700 Fax: (585) 423-5910 Attorneys for Plaintiffs-Appellants Date Completed: November 10,2014 TABLE OF CONTENTS PRELIMINARY STATEMENT ................................................................................ 1 DISCUSSION ............................................................................................................ 5 POINT I. JOHNSON AND LAWLEY FAIL TO IDENTIFY PUBLIC POLICY GROUNDS WARRANTING INVALIDATION OF THE PARTIES' CHOICE OF FLORIDA LAW ................................................................ 5 A. Johnson and Lawley Fail to Demonstrate that Florida Law Governing the Availability of Partial Enforcement Is Repugnant to Fundamental New York Public Policy .............................................. 6 1. This Issue Is Preserved for Appellate Review ............................ 6 2. Public Policy Analysis Is Appropriately Limited to Florida Law Governing the Availability of Partial Enforcement ................................................................................ 8 3. Johnson and Lawley Fail to Demonstrate that the Florida Law Governing Partial Enforcement Violates a Fundamental New York Public Policy ..................................... 12 B. Johnson and Lawley Fail to Demonstrate that Florida Statutes § 542.335(1)(g)(1) and § 542.335(1)(h) Are Repugnant to a Fundamental New York Public Policy ............................................ 14 1. B&B's Opening Brief Expressly Argued that Florida Statutes§ 542.335(1)(g)(1) and (1)(h) Do Not Violate Fundamental New York Public Policy ..................................... 15 2. Johnson and Lawley Cannot Show that Florida Statutes § 542.335(1)(g)(1) and (1)(h) Violate Fundamental New York Policy .............................................................................. 16 C. The Fourth Department's Ruling that the Parties' Florida Choice of Law Was Reasonable Is Not Properly Before the Court and Was In Any Event Correctly Decided ............................... 23 POINT II. JOHNSON AND LAWLEY FAIL TO ESTABLISH THAT ON THE LIMITED RECORD BEFORE THE COURT B&B ENGAGED IN OVERREACHING SUFFICIENT TO BAR PARTIAL ENFORCEMENT AS AMATTEROFLAW ...................................................................................... 26 A. Johnson and Lawley Misstate the Burden of Proof and the Correct Standard of Review ............................................................... 26 B. Johnson and Lawley Fail to Identify Any Cognizable Grounds for Sustaining the Fourth Department's Ruling that B&B Engaged in Improper Overreaching ................................................... 29 1. Johnson and Lawley Fail to Show that the Timing of the Signing of the Employment Agreement Is Evidence of Bad Faith .................................................................................. 29 2. Johnson and Lawley Fail to Demonstrate that B&B Was Required to Tailor the Non-Solicitation Covenant to the New York Court's Decision inBDO ....................................... 31 C. Johnson and Lawley Fail to Show that the Mere Existence of a Severability Clause Should Be Construed as Evidence of Overreaching ...................................................................................... 33 D. Johnson and Lawley's Arguments Concerning Absence of Mutuality Are Not Properly Before the Court and in Any Event Provide No Basis for Reversing the Fourth Department's Order. ..... 35 E. Johnson and Lawley Fail to Refute B&B's Showing that the Fourth Department Erred in Awarding Summary Judgment Based on a Limited Factual Record and Before Basic Discovery Had Been Conducted .......................................................................... 38 CONCLUSION ....................................................................................................... 42 11 TABLE OF AUTHORITIES CASES American Express Travel Related Servs. Co., Inc. v. Assih, 26 Misc. 3d 1016 (N.Y. Civ. Ct. Richmond Cty. 2009) .................................... 10 Ashland Mgt. Inc. v. Altair Investments NA, LLC, 59 A.D.3d 97 (1st Dep't 2008) .......................................................................... 29 Austin v. Mid State Fire Equip. of Cent. Florida, 727 So. 2d 1097 (Fla. Dist. Ct. App. 51h Dist. 1999) ......................................... 14 BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) ............................................................................ 31, 32, 33 Bigio v. Coca-Cola Co., 675 F.3d 163 (2d Cir. 2012) ............................................................................... 11 Bingham v. New York City Transit Authority, 99 N.Y.2d 355 (2003) ........................................................................................... 8 Boss v. American Express Fin. Advisors, Inc., 15 A.D.3d 306 (1st Dep't 2005), aff'd, 6 N.Y.3d 242 (2006) ................. 9, 21, 22 Boss v. American Express Fin. Advisors, Inc., 6 N.Y.3d 242 (2006) .......................................................................................... 21 Brown & Brown, Inc. v. Ali, 494 F.Supp. 2d 943 (N.D. Ill. 2007) .................................................................. 32 Campaign for Fiscal Equity v. State, 182 Misc. 2d 676 (N.Y. Sup. Ct. 1999) ............................................................. 41 Clifton Steel Corp. v. General Elec., Co., 80 A.D.2d 714 (3d Dep't 1981) ......................................................................... 10 Clifton Steel Corp. v. General Elec., Co., 80 A.D.2d 715 (3d Dep't 1981) ......................................................................... 10 Colucci v. Kar KareAuto. Grp., Inc., 918 So. 2d 431 (Fla. Dist. Ct. App. 4th Dist. 2006) .......................................... 15 iii Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66 (1997) .......................................................................................... 20 Cooper v. City of New York, 81 N.Y.2d 584 (1993) ........................................................................................... 8 De Zimm v. Connelie, 64 N.Y.2d 860 (1985) ........................................................................................ 28 Dillon v. Spilo, 275 N.Y. 275 (1937) ............................................................................................. 8 Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386 (2d Cir. 2001) ............................................................................... 11 Garber Bros. v. Evlek, 122 F.Supp. 2d 375 (E.D.N.Y. 2000) ................................................................ 24 GPS Indus., LLC v. Lewis, 691 F.Supp. 2d 1327 (M.D. Fla. 2010) .............................................................. 17 Haynes v. Haynes, 83 N.Y.2d 954 (1994) ........................................................................................... 8 Holterman v. Holterman, 3 N.Y.3d 1 (2004) .............................................................................................. 28 Hugh O'Kane Elec. Co., LLC v. MasTec N. Am., Inc., 19 A.D.3d 126 (1st Dep't 2005) .................................................................. 13, 20 Int' l Paper Co. v. Suwyn, 951 F.Supp. 445 (S.D.N.Y. 1997) ...................................................................... 37 Kilberg v. Northeast Airlines, 9 N.Y.2d 34 (1961) ............................................................................................ 11 Mary Lincoln Candies, Inc. v. Dep't of Labor, 289 N.Y. 262 (1942) ............................................................................................. 8 McPhee v. Gen. Elec. Int'l, Inc., 736 F.Supp. 2d 676 (S.D.N.Y. 2010), aff'd, 426 Fed. Appx. 33 (2d Cir. 2011) .................................................................................................................. 23 IV Medi-Weightloss Franchising USA, LLC v. Medi-Weight loss Clinic of Boca Raton, LLC, No. 8:11-CV-2437-T-30MAP, 2012 WL 260902 (M.D. Fla. Jan. 3, 2012) ............................................................................................................ 18, 19 Medi-Weightloss Franchising USA, LLC v. Sadek, No. 8:09-CV-2421-T-24MAP, 2010 WL 1837767 (M.D. Fla. Mar. 11, 2010) .................................................................................................................. 19 North American Products Corp. v. Moore, 196 F.Supp. 2d 1217 (M.D. Fla. 2002) .............................................................. 18 PartyLite Gifts, Inc. v. MacMillan, 895 F.Supp. 2d 1213 (M.D. Fla. 2012) .............................................................. 17 Patrician Plastic Corp. v. Bernadel Realty Corp., 25 N.Y.2d 599 (1970) ........................................................................................... 8 Pavlou v. City of New York, 8 N.Y.3d 961 (2007) .......................................................................................... 28 Portware, LLC v. Barot, No. 603738/05, 2006 WL 516816 (N.Y. Sup. Ct. Mar. 2, 2006) ...................... 29 Post v. Merrill Lynch, Pierce, Fenner & Smith, 48 N.Y.2d 84 (1979) .......................................................................................... 36 Powers v. 31 E 31 LLC, No. 153,2014 WL 5325471 (N.Y. Oct. 21, 2014) ...................................... 27,28 Purchasing Assoc. v. Weitz, 13 N.Y.2d 267 (1963) ........................................................................................ 17 Reliable Enterprises, Inc. v. Nagori Contracting Corp., No. 11355/10, 2014 WL 5001219 (2d Dep't Oct. 8, 2014) ............................... 27 Southwest Stainless L.P. v. Sappington, No. 07-CV-0334-CVE-PJC, 2008 WL 918706 (N.D. Okla. Apr. 1, 2008) ...... 22 Town of Massena v. Niagara Mohawk Corp., 45 N.Y.2d 482 (1978) ........................................................................................ 23 v Voss v. Netherlands Ins. Co., 22 N.Y.3d 728 (2014) .................................................................................. 27, 28 Welsbach Elec. Corp. v. MasTec N. Am., Inc., 7 N.Y.3d 624 (2006) .............................................................................. 20, 21, 22 Wise v Transco, Inc., 73 A.D.2d 1039 (4th Dep't 1980) ...................................................................... 36 Zellner v. Stephen D. Conrad, M.D., P.C., 183 A.D.2d 250 (2d Dep't 1992) ....................................................................... 37 Zurich Ins. Co. v. Shearson Lehman Hutton, 84 N.Y.2d 309 (1994) ........................................................................................ 11 STATUTES CPLR 5501 .............................................................................................................. 23 Fla. Stat. § 542.335(1) ...................................................................................... passim vi Plaintiffs-Appellants Brown & Brown, Inc. ("BBI") and Brown & Brown of New York, Inc. ("BBNY", and together with BBI, "B&B") submit this reply brief in further support of their appeal from the February 7, 2014 Order of the Appellate Division, Fourth Department (the "Order"), and in reply to the Brief for Defendants-Respondents (the "Opposition") submitted by Defendants-Respondents Theresa A. Johnson ("Johnson") and Lawley Benefits Group, LLC ("Lawley"). PRELIMINARY STATEMENT In its July 21, 2014 Brief for Plaintiffs-Appellants (the "Opening Brief'), B&B conclusively demonstrated that the Fourth Department's Order was erroneous for at least two compelling reasons, each providing an independent basis for reversal. First, B&B showed that the Fourth Department's sweeping invalidation of the parties' reasonable choice of Florida law solely on public policy grounds was unsustainable. Contrary to the Fourth Department's Order, application of Florida law to this case does not create a result that is "truly obnoxious" to a fundamental New York policy, as would be required to invalidate the choice-of-law clause under controlling New York law. Opening Brief, Point I. Second, B&B showed that even applying New York law (in contravention of the parties' agreement), it was erroneous for the Fourth Department to rule on the limited record before it that B&B had engaged in improper overreaching as a 1 matter of law, thereby barring partial enforcement of the Non-Solicitation Covenant.1 Opening Brief, Point II. In their 69-page Opposition- chiefly characterized by disregard of controlling law, misstatements of appellate review standards and distortion of the record- Johnson and Lawley do not refute either of these showings. As an initial matter, Johnson and Lawley fail to identify any cognizable public policy grounds for invalidating the parties' choice of Florida law. In fact, the Opposition's choice-of-law "analysis" is most notable for its failure to even recognize much less satisfy the high bar New York law imposes for public policy invalidation of reasonable choice of law clauses. Thus, while Johnson and Lawley strive to characterize differences between Florida and New York law as implicating policy concerns, a mere difference in law or policy cannot justify invalidation of the parties' choice of Florida law. The actual burden on Johnson and Lawley is far higher; as noted, they must show that application of Florida law in this case would be "repugnant" to a fundamental New York policy, a standard they are plainly unable to meet. In particular, Johnson and Lawley do not identify how application of Florida's law of partial enforcement- the sole issue before this Court- would 1 Defined terms as used herein shall have the same meaning employed in the Opening Brief. 2 create a result in this case truly obnoxious to a fundamental New York public policy. As B&B explained in its Opening Brief, the Court's analysis of the public policy issue need not go beyond this issue. However, Johnson and Lawley are equally unable to explain why Fla. Stat. § 542.335(1)(g)(l) and (h), the statutory provisions cited by the Fourth Department, are "repugnant" to a fundamental New York public policy, and they are not so. In short, there are no grounds for public policy invalidation of the parties' reasonable choice of Florida law, and Florida law should be applied by this Court. Johnson and Lawley fare no better in attempting to demonstrate that under New York law, B&B engaged in overreaching sufficient to bar partial enforcement of the Non-Solicitation Covenant as a matter of law. To prevail on this summary judgment motion, Johnson and Lawley must establish the absence of any factual issues as to overreaching by B&B, affording B&B as non-movant the benefit of every evidentiary inference. Johnson and Lawley fall far short of satisfying this standard. Indeed, the Opposition merely bolsters the conclusion that the three findings underlying the Fourth Department's award of summary judgment are unsustainable. As to the first finding- that Johnson's signing of the Employment Agreement when she began work by itself constituted "overreaching"- Johnson and Lawley ignore both case law contrary to their position and substantial evidence 3 in the record showing that Johnson was not coerced. At a bare minimum, there is a factual issue concerning the circumstances surrounding Johnson's hiring, rendering the Fourth Department's ruling on the limited record before it clear error. Johnson and Lawley likewise cite no grounds for sustaining the Fourth Department's second finding- that B&B was required to tailor the Employment Agreement's terms to New York law. Johnson and Lawley cannot gainsay the fact that the parties had no reason to take New York law into account in drafting the Employment Agreement, because the agreement expressly provided that Florida would govern- which, as the Fourth Department itself ruled, was a reasonable choice of law. Finally, as to the Fourth Department's third finding- that the inclusion of a severability clause in the Employment Agreement by itself evidences overreaching- Johnson and Lawley do not even attempt to defend this unprecedented ruling and have effectively conceded that it is unsustainable. In short, it is now clear that none of the Fourth Department's three findings of supposed "overreaching" by B&B are sufficient to bar partial enforcement as a matter of law, particularly on the limited record before the Fourth Department. Unable to articulate substantive grounds for prevailing on this motion, Johnson and Lawley devote a substantial portion of their Opposition to a series of inaccurate contentions concerning preservation of issues for appellate review, the 4 positions B&B has taken in this litigation, the burden of proof on this summary judgment motion, and the standard of appellate review. Each of these mischaracterizations and misstatements will be addressed herein. DISCUSSION POINT I. JOHNSON AND LAWLEY FAIL TO IDENTIFY PUBLIC POLICY GROUNDS WARRANTING INVALIDATION OF THE PARTIES' CHOICE OF FLORIDA LAW B&B'S Opening Brief made two key points regarding application of Florida law. First, B&B showed that the scope of the Court's analysis of Florida law is properly limited to the sole issue before it: the availability of partial enforcement of the Non-Solicitation Covenant. As there is nothing about application of Florida law governing partial enforcement that is truly obnoxious or repugnant to fundamental New York public policy, Florida law should govern as the parties intended. Opening Brief at 28-30. Second, B&B showed that even if the Court does choose to evaluate the public policy implications of the Florida statutory provisions cited by the Fourth Department- Fla. Stat.§ 542.335(1)(g)(l) and (l)(h)- there is still no basis for invalidation of the parties' choice of Florida law as these statutory provisions are likewise not repugnant or truly obnoxious to fundamental New York public policy. Opening Brief at 31-33. 5 Johnson and Lawley have failed to refute either of these showings. A. Johnson and Lawley Fail to Demonstrate that Florida Law Governing the Availability of Partial Enforcement Is Repugnant to Fundamental New York Public Policy. As an initial matter, Johnson and Lawley fail to show why Florida law should not be applied- as Johnson and B&B both intended- to the sole issue now before this Court: the availability of partial enforcement of the Non-Solicitation Covenant (i.e. judicial blue-penciling of the covenant). While Johnson and Lawley attempt to raise several procedural and "substantive" contentions in this regard, none of these contentions has merit, as fully discussed below. 1. This Issue Is Preserved for Appellate Review Johnson and Lawley initially attempt to bar the Court from even evaluating Florida law in this area, contending the issue is not "preserved." This is not accurate. B&B has consistently argued- at the trial court and again before the Fourth Department- that there is no public policy basis for invalidating the parties' choice of Florida law. Addendum to Brief of Plaintiffs- Appellants ("Opening Brief ADD") at 41-42, 216-223,331-337. Thus, B&B's position on this appeal - that the specific Florida law governing partial enforcement is not repugnant to a fundamental New York public policy - is not a new issue. While the focus of the argument has narrowed - given that partial enforcement is the one issue remaining before the Court - B&B 's underlying 6 position remains the same: there are no public policy grounds for invalidating the application of Florida law. Johnson and Lawley contend that B&B's argument that the Court's evaluation of public policy is appropriately limited to Florida's law of partial enforcement is an attempt to introduce a "new" issue. However, this is also not the case. By arguing that the Court need not look beyond the public policy implications of the sole issue before it, i.e. Florida's law of partial enforcement, B&B is merely addressing the appropriate scope of the Court's review in evaluating whether a public policy issue exists. It is not introducing a new argument. In attempting to demonstrate the contrary, Johnson and Lawley contend that B&B is actually arguing not that the parties' choice of Florida law should be universally enforced but rather that Florida law should only be "partially applied" to particular issues. Opposition at 21. This mischaracterizes B&B's position. Far from advocating a partial or selective application of Florida law, B&B's position on this appeal is that the parties' choice of Florida law should be universally applied to all contract-related issues before the Court. As there is just one contract- related issue before this Court - the availability of partial enforcement - Florida law should govern the Court's resolution of this issue. 7 Accordingly, this issue is unquestionably preserved for appellate review. 2 2. Public Policy Analysis Is Appropriately Limited to Florida Law Governing the Availability of Partial Enforcement The scope of the Court's evaluation of the public policy implications of Florida law is appropriately limited to Florida law governing the availability of partial enforcement. Opening Brief at 28-30. As the availability of partial enforcement of the Non-Solicitation Covenant is the only issue on this appeal, 2 While Johnson and Lawley cite to this Court's decision in Patrician Plastic Corp. v. Bernadel Realty Corp., 25 N.Y.2d 599 (1970), this case does not assist them. Patrician stands for the uncontroversial proposition that a broad referral from the appellate court asking whether a decision was "properly made" is generally interpreted as certifying the questions of law explicitly decided by the referring court and appealed from by the aggrieved party. !d. at 604. Here, there is no question that the legal question of whether the parties' Florida choice-of-law clause should be enforced on public policy grounds was both decided by the Fourth Department and appealed from by B&B. The cases Mary Lincoln Candies, Inc. v. Dep't of Labor, 289 N.Y. 262 (1942) and Dillon v. Spilo, 275 N.Y. 275 (1937) are likewise irrelevant. In Mary Lincoln Candies, the court held that a question certified for appeal that had not actually been reached by the lower court was not properly preserved. 289 N.Y. at 265-66. Here, by contrast, the Florida choice of law was specifically reached and decided by the Fourth Department. In Dillon, the Court merely held that it would not rule on "abstract" legal questions which were not determinative of legal issues, 275 N.Y. at 280, which is plainly not the case here. The other cases Johnson and Lawley cite all involve situations where a party was attempting to introduce an entirely new theory of recovery or defense for the first time at the appellate level and are thus inapposite. See, e.g., Bingham v. New York City Transit Authority, 99 N.Y.2d 355, 359-60 (2003) (entirely new argument that Schlessinger rule governing common carriers' liability should be abandoned as it was raised for the first time on appeal and accordingly not preserved); Haynes v. Haynes, 83 N.Y.2d 954, 957 (1994) (new objection raised for first time on appeal and thus not preserved for review); Cooper v. City of New York, 81 N.Y.2d 584,588 (1993) (entirely new statutory theory of recovery not preserved for review). Here, by stark contrast, B&B has always argued that there is no basis for public policy invalidation of Florida law. 8 there is no need for the Court to evaluate public policy implications of other aspects of Florida law. Johnson and Lawley dispute this. They contend that the Court's review of Florida law should not focus on public policy conflicts arising from application of Florida law to the specific issue at bar. Rather, they contend, the Court must search out any and all aspects of Florida law which, in a hypothetical case, could possibly pose a public policy concern. Opposition at 23-29. In other words, Johnson and Lawley argue that it does not matter that Florida law when applied to the case at bar poses no public policy concern, so long as some aspect of Florida law could, in the abstract, be seen as problematic. This approach to public policy review of reasonable choice-of-law clauses is untenable. New York law in this area is guided by two core principles: first, that deference must be given to the parties' choice of law and second, that the public policy exception to enforcement of the parties' choice of law must be sparingly applied. See, e.g., Boss v. American Express Fin. Advisors, Inc., 15 A.D.3d 306, 307-08 (1st Dep't 2005), aff'd, 6 N.Y.3d 242 (2006). It would be inconsistent with these bedrock principles for the Court to sweepingly invalidate the parties' choice of law because some aspect of the chosen law could, in a hypothetical case, raise a policy concern. 9 Johnson and Lawley cite no case law which supports their argument. In fact, the two cases they do cite- American Express Travel Related Servs. Co., Inc. v. Assih, 26 Misc. 3d 1016 (N.Y. Civ. Ct. Richmond Cty. 2009) and Clifton Steel Corp. v. General Elec., Co., 80 A.D.2d 714 (3d Dep't 1981) (and its companion case, Clifton Steel Corp. v. General Elec., Co., 80 A.D.2d 715 (3d Dep't 1981)) merely bolster B&B's position. In both these cases, the courts invalidated the parties' choice of law not because of a theoretical policy issue but rather based on application of the chosen law to the specific facts at issue in the case - in American Express, application of the Utah usury laws to a loan, 26 Misc. 3d at 1022-27, and in Clifton Steel, application of the Connecticut law governing lien waivers to a lien issue, 80 A.D.2d at 714. It is respectfully submitted that such method is the only reasonable approach for a court to take. In attempting to strengthen their own contentions, Johnson and Lawley mischaracterize the position B&B is taking and claim that B&B is advocating some form of "partial" or selective application of Florida law in a kind of patchwork fashion with New York law. Opposition at 24-26. B&B is advocating no such thing. Far from asking the Court to apply a smorgasbord approach to the law, B&B's position is that the Court must universally apply the parties' chosen law of Florida, unless it could be shown- and here it cannot be shown- that 10 application of Florida law to an issue in this case creates a result that is repugnant to a fundamental New York policy? In any event, contrary to Johnson and Lawley, there is no inherent bar to the Court applying the law of more than one jurisdiction, where circumstances warrant. See, e.g., Bigio v. Coca-Cola Co., 675 F.3d 163, 169 (2d Cir. 2012) (doctrine of depecage permits New York Courts to apply laws of different jurisdictions to different issues); Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 397 n.1 (2d Cir. 2001) ("There is no conflict in applying New York law to one claim and Connecticut law to another.") This Court endorsed this very approach in Kilberg v. Northeast Airlines, 9 N.Y.2d 34 (1961), where the Court applied Massachusetts law to all issues except the measure of damages, as to which Massachusetts law violated New York policy and where New York law was accordingly applied. 9 N.Y.2d at 39-40. Thus, even in circumstances where application of the chosen jurisdiction's law did violate a fundamental New York policy -which is not the case here- it 3 Johnson and Lawley's Opposition includes a string cite to a series of cases, including this Court's decision in Zurich Ins. Co. v. Shearson Lehman Hutton, 84 N.Y.2d 309 (1994), standing for the general proposition that courts employing the so-called "center of gravity" analysis for selecting governing law in contract cases should generally select the law of one jurisdiction only. These cases are inapposite to the case at bar, given that they involve a judicial determination of the appropriate law as opposed to enforcement of the parties' own choice of law and, accordingly, the strong New York policy in favor of honoring a reasonable choice oflaw provision is not at play. See, e.g., Zurich, 84 N.Y.2d at 313 (determining whether New York policy precludes indemnification in insurance contract containing no choice-of-law provision); see also Opposition at 25-26. 11 would nonetheless be appropriate to apply the law of the chosen jurisdiction to all issues except for the specific issue where a fundamental public policy is implicated. This is not a "mix and match" approach to the law, as Johnson and Lawley misleadingly suggest, but rather a means of furthering New York's goal of deferring to the parties' chosen law to the fullest extent possible. In short, the appropriate scope of the Court's review on this appeal is to limit its evaluation of the public policy implications of Florida law to the specific issue before the Court: the availability of partial enforcement. 3. Johnson and Lawley Fail to Demonstrate that the Florida Law Governing Partial Enforcement Violates a Fundamental New York Public Policy Having devoted multiple pages of their Opposition to attempting to bar the Court from even considering the public policy implications of applying Florida law to the availability of partial enforcement, Johnson and Lawley then attempt to show that applying Florida law in this area is somehow so truly obnoxious to fundamental New York public policy that it warrants invalidation of the parties' choice of Florida law. Opposition at 31-41. These efforts are unavailing. In fact, the public policies underlying Florida and New York law governing the availability of partial enforcement are broadly similar insofar as both jurisdictions permit and frequently utilize partial enforcement in order to blue- pencil a restrictive covenant so that it is no broader than necessary to protect a 12 legitimate business interest. Opening Brief at 31-33. The differences in the approaches taken by the respective jurisdictions are, at most, differences in emphasis. There is certainly nothing about the Florida law of partial enforcement which would render its application repugnant or truly obnoxious to a fundamental New York public policy. In arguing to the contrary, Johnson and Lawley contend that Florida's law of partial enforcement "prohibit[ s] judicial discretion" - because Florida law requires courts to make partial enforcement available where so doing will protect a legitimate business interest. Opposition at 35-41. See Fla. Stat.§ 542.335(1)(c). However, this aspect of Florida law in no sense renders its application in New York repugnant to a fundamental New York public policy. The very most that can be said about this aspect of Florida law is that it reflects a somewhat different approach to partial enforcement than that employed in New York. This shift in emphasis, however, does not mean that application of Florida law of partial enforcement would give rise to an outcome that "would violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal," as would be required to invalidate the parties' choice of law provision. Hugh O'Kane Elec. Co., LLC v. MasTec N. Am., Inc., 19 A.D.3d 126, 127 (1st Dep't 2005) (citations omitted) (internal quotation marks omitted). 13 Indeed, Johnson and Lawley fail to recognize that Florida's law of partial enforcement retains a critical protection against employer overreaching: partial enforcement is only available where the court determines a legitimate business interest exists. Where it appears the employer is overreaching and no such legitimate interest exists, the court must deny partial enforcement - as numerous Florida courts have done. See Opening Brief at 31-33 and cases cited therein. Thus, Johnson and Lawley's repeated contentions that Florida law governing the availability of partial enforcement does not protect against employer overreaching ring particularly false. See, e.g.,, Austin v. Mid State Fire Equip. of Cent. Florida, Inc., 727 So. 2d 1097, 1098 (Fla. Dist. Ct. App. 5th Dist. 1999) ("The injunction [restraining employee] should have been limited to the customer and pricing portions of the covenant because beyond that it serves only to prohibit competition and becomes unreasonable protection for [the employer.]") In short, applying Florida's law of partial enforcement does not create any outcome that is repugnant to fundamental New York public policy. B. Johnson and Lawley Fail to Demonstrate that Florida Statutes § 542.335(1)(g)(l) and§ 542.335(1)(h) Are Repugnant to a Fundamental New York Public Policy B&B's Opening Brief also demonstrated that the two Florida statutory provisions cited by the Fourth Department as grounds for invalidating the parties' choice of Florida law- Fla. Stat.§ 542.335(1)(g)(1) and (1)(h)- are not in any 14 sense repugnant to a fundamental New York public policy. Opening Brief, Point I(B), at 28-33. On the contrary, when evaluating how Florida courts have applied these statutes, it is clear that Florida courts, like those in New York, consistently seek to ensure that the public interest in maintaining open, free, and competitive markets is at all times protected. Colucci v. Kar Kare Auto. Grp., Inc., 918 So. 2d 431, 440 (Fla. Dist. Ct. App. 4th Dist. 2006) ("[W]e cannot uphold an agreement whose sole purpose is to prevent competition per se; such agreements are void as a matter of public policy."). Thus, even if the Court chooses to evaluate the public policy implications of these statutory provisions, it is still clear that there is no basis for invalidating the parties' choice of Florida law. 1. B&B's Opening Brief Expressly Argued that Florida Statutes § 542.33S(l)(g)(l) and (l)(h) Do Not Violate Fundamental New York Public Policy Preliminarily, it should be noted that Johnson and Lawley repeatedly contend that B&B has somehow "conceded" that the Florida statutory provisions are repugnant to fundamental New York public policy. Opposition at 19, 38-39. This is false. In fact, B&B's Opening Brief explicitly argued that there are no public policy grounds for invalidating the statutory provisions and that the Fourth Department's holding was erroneous, stating even if the Court does choose to consider the purported public policy concerns the Fourth Department raised with 15 respect to the Florida statute - and there is no reason to do so, given that these statutory provisions have no bearing on the issue of partial enforcement - it is clear that there was no basis for the Fourth Department's ruling that Florida law is "truly obnoxious" to New York public policy. In fact, while the portions of the Florida statute cited by the Fourth Department reflect a difference in emphasis of factors considered by Florida and New York courts, they do not evidence a fundamental policy distinction between the jurisdictions. Opening Brief at 3. See also id. at 5-6, 24. B&B went on to demonstrate that notwithstanding the statutory language cited by the Fourth Department, the differences between New York and Florida law- particularly as the law is applied by Florida courts- were differences in emphasis and approach, not differences in core policy. See Opening Brief at 29-33 and cases cited therein. Thus, B&B has certainly not "conceded" this issue. 2. Johnson and Lawley Cannot Show that Florida Statutes § 542.335(1)(g)(l) and (l)(h) Violate Fundamental New York Policy The substantive arguments Johnson and Lawley attempt to make in support of their contention that Fla. Stat.§ 542.335(1)(g)(l) and (l)(h) are repugnant to a fundamental New York policy are no more persuasive. The chief tack taken by Johnson and Lawley in their Opposition is to cite New York employment cases standing for the general proposition that New York does indeed have a "public policy" which protects an individual's right to work. 16 See Opposition at 13, 15-16. However as B&B demonstrated in its Opening Brief, Florida likewise has such as policy. Opening Brief at 31-33. Indeed, while Johnson and Lawley hyperbolically contend that application of Florida law would "eviscerate" employee protections in New York, Opposition at 17, the actual distinctions of law and policy between the two jurisdictions are far less dramatic. What is readily apparent from any fair reading of Florida law is that Florida courts engage in a balancing of interests in much the same way a New York court does and are fully prepared to invalidate an overbroad restriction when required. Opening Brief at 31-33. See, e.g., GPS Indus., LLC v. Lewis, 691 F.Supp. 2d 1327, 1336 (M.D. Fla. 2010) (refusing to grant employer preliminary injunction to enforce restrictive covenants containing temporal limitation but no geographic limitation and finding such "refusal serves the public interest by disallowing unreasonable restrictive covenants to unfairly restrain trade"); PartyLite Gifts, Inc. v. MacMillan, 895 F.Supp. 2d 1213, 1227 (M.D. Fla. 2012) (holding non-solicit covenant without temporal limitation to be presumptively unreasonable under Florida statute). Thus, one of the key New York polices Johnson and Lawley themselves identify -"the interest of society itself in a free and open marketplace," see, e.g., Purchasing Assoc. v. Weitz, 13 N.Y.2d 267, 271 (1963)- is given significant weight by the Florida courts. Such concern with protecting a free and open 17 market, in turn, provides meaningful protection to the employee's interest in obtaining gainful employment under Florida law. Tellingly, while Johnson and Lawley's Opposition includes an undifferentiated string citation to a series of Florida cases which purportedly refuse to consider hardship to the employee, Opposition at 40-41, an analysis of the cases Johnson and Lawley cite show a fundamental consistency with New York law. For example, in North American Products Corp. v. Moore, 196 F.Supp. 2d 1217 (M.D. Fla. 2002), the court merely enforced a non-solicitation covenant for preliminary injunction purposes which barred the former employee from soliciting customers with whom he had directly dealt during his former employment - an outcome fully consistent with New York law. 196 F.Supp. at 1228-29. Moreover, in reaching its ruling the court specifically considered potential harm to the former employee, observing that he was "not prohibited under the 1998 Agreement from operating a competing business or from soliciting customers in the market so long as they are not NAPCO customers with whom Moore did business prior to his departure from NAPCO." /d. at 1231. In Medi-Weightloss Franchising USA, LLC v. Medi-Weightloss Clinic of Boca Raton, LLC, No. 8:11-CV-2437-T-30MAP, 2012 WL 260902 (M.D. Fla. Jan. 3, 2012), also cited by Johnson and Lawley, the court showed a similar willingness to weigh the interests of former employees in reaching its ruling. This 18 case involved a covenant which restricted former employees from operating a competing weight loss clinic within 25 miles of the plaintiff employer's business site, protected area, or market area, for a two-year period. /d. at *5. Far from ignoring harm to the employee or undue impact on the market, the court expressly noted the relatively limited nature of the restrictions imposed on the former employees, observing that they were not precluded "from opening, operating or working in another weight loss clinic " and were "simply limit[ ed]" in "geographic scope for a reasonable period of time." /d. at *4. In yet another case cited by Johnson and Lawley, Medi-Weight/ass Franchising USA, LLC v. Sadek, No. 8:09-CV-2421-T-24MAP, 2010 WL 1837767 (M.D. Fla. Mar. 11, 2010), the court issued an injunction temporarily barring former employees from operating a directly competing business. However, far from rejecting consideration of hardship to the former employees, the court expressly noted that the former employees had made no claim of harm resulting from the injunction and had merely denied violating any agreement with their former employer. The court ultimately upheld the injunction based on evidence that the former employees were using confidential information and marks purloined from their former employer, 2010 WL 1837767, at *5-6, just as a New York court would do. 19 The overarching point is that in none of these cases cited by Johnson and Lawley did the language of Fla. Stat.§ 542.335(1)(g)(l) and (l)(h) prevent the Florida court from reaching a ruling that was fair to the employer's legitimate business interests while not unduly restricting the former employees from competing in the market. Moreover, even assuming arguendo that the respective laws of Florida and New York do have a different policy emphasis (and in reality, as discussed above, the actual differences are not what Johnson and Lawley allege them to be), a mere policy conflict is not sufficient to warrant invalidation of the chosen jurisdiction's law. If that were the case, invalidating law on public policy grounds would be a routine occurrence -given that all laws have some underlying policy rationale - and the efficacy of choice-of-law clauses would effectively be destroyed. See, e.g., Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 79 (1997). New York's standard for public policy invalidation is far higher, requiring a showing that application of the chosen law will not merely conflict with New York policy but will create a result that is repugnant to "some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal." Hugh O'Kane Elec. Co., 19 A.D.3d at 127 (citations omitted). See also Welsbach Elec. Corp. v. MasTec N. Am., Inc., 7 N.Y.3d 624, 629 (2006). 20 This Court's ruling in Welsbach well illustrates the key distinction between an ordinary policy conflict and a policy conflict so fundamental as to trigger public policy invalidation of foreign law. In that case, the court analyzed whether application of the parties' choice of Florida law would violate New York law against "pay-if-paid" provisions- which are enforced in Florida but not in New York. 19 A.D. 2d at 628-29. While acknowledging the New York policy against such provisions, this Court nonetheless concluded that the policy was not so fundamental that its application could warrant invalidating the parties' choice of Florida law. /d. at 632. Equally illustrative is the First Department's decision in Boss v. American Express Fin. Advisors, Inc., ultimately affirmed by this Court. In Boss, the court enforced the parties' choice of Minnesota law, even though Minnesota law permits employers to deduct a greater proportion of business expenses from employee wages than the cap imposed by New York law. While the Minnesota provision plainly conflicted with New York policy protecting worker interests, the policy concern was not sufficiently great to warrant public policy invalidation of the parties' choice of Minnesota law. 15 A.D.3d at 308.4 4 While Johnson and Lawley attempt to distinguish Boss by arguing that employee wage issues exercise less impact on employee interests while restrictive covenants are fundamental to public policy, this is not a meaningful distinction. Opposition at 24. Indeed, wage deductions and restrictive covenants both potentially impact an employee's ability to earn a living, and Johnson and Lawley point to nothing to suggest that wage deductions have lesser public policy 21 The approach taken in Welsbach and Boss should be equally applicable here: while there may be differences in law and policy between New York and Florida as to the enforceability of restrictive covenants, and these differences may be reflected in the Florida statutory provisions cited by the Fourth Department, these differences are by no means so great as to warrant invalidation of the parties' choice of Florida law. In short, Fla. Stat.§ 542.335(1)(g)(l) and (l)(h) do not warrant invalidation of the parties' choice of Florida law on public policy grounds.5 implications than the restrictive covenant at issue here. What Boss makes clear is that a difference in approach, even in an area that directly impacts New York policy, will not in itself create a policy concern so fundamental as to warrant invalidation of a choice-of-law clause. 15 A.D.3d at 308. Contrary to Johnson and Lawley's contentions, while the Court of Appeals ultimately affirmed Boss on grounds pertaining to the choice of forum clause and did not reach the choice- of-law clause issue determined by the First Department, Opposition at 24, this does not invalidate the First Department's holding on the choice-of-law issue. Boss v. American Express Financial Advisors, Inc., 6 N.Y.3d 242 (2006) 5 Unable to identify New York authority invalidating Florida employment law on public policy grounds, Johnson and Lawley eagerly embrace decisions from a handful of other jurisdictions which have held a Florida choice-of-law clause to be unenforceable in the employment context. The most notable aspect of these cases, however, is that none of them employ the high bar which New York imposes for public policy invalidation of a reasonable choice of law clause. In this regard, the District Court's decision in Southwest Stainless L.P. v. Sappington, No. 07-CV-0334-CVE-PJC, 2008 WL 918706 (N.D. Okla. Apr. 1, 2008) is particularly telling. In that case, the court discussed an enhanced standard closer to that of New York's but ultimately declined to apply such higher standard, holding that Oklahoma courts could invalidate a choice of law provision based on a mere finding that the chosen law's jurisdiction differed in law or policy from that of Oklahoma. 2008 WL 918706, at *5 (declining to apply "broader concept of public policy"). 22 C. The Fourth Department's Ruling that the Parties' Florida Choice of Law Was Reasonable Is Not Properly Before the Court and Was In Any Event Correctly Decided Johnson and Lawley also ask the Court to reverse the Fourth Department's finding that the parties had sufficient contacts with Florida to render the Florida choice-of-law reasonable. As an initial matter, it should be noted that this issue is not properly before the Court, as it is not one of the issues covered by B&B's appeal.6 However even if the Court does choose to review the Fourth Department's finding that the Florida choice-of-law clause was reasonable, it is abundantly clear that there is no basis to reverse the lower court's ruling on this issue. As an initial matter, it cannot be meaningfully disputed that one party to the Agreement- BBI -is a Florida corporation with its principal place of business in Florida and which issued the paychecks Johnson received as employee. Record on Appeal ("R.") at 265-67. These factors by themselves weigh very heavily in favor of enforcing the choice of law clause, under well-settled New York law. See, e.g., McPhee v. Gen. Elec. Int'l, Inc., 736 F.Supp. 2d 676, 680-81 (S.D.N.Y. 2010) ("reasonable relationship" existed with the state in which the employer had a 6 Although Johnson and Lawley contend they are free to reargue any issue decided below, this is not the case. Even the broader appellate review contemplated by CPLR 5501 is inapplicable here because this is not an appeal from a final judgment. Town of Massena v. Niagara Mohawk Corp., 45 N.Y.2d 482 (1978), cited by Johnson and Lawley, is inapposite. See Opposition at 41. Massena did not involve an appeal from a non-final judgment, as is the case here, but rather from the trial court's dismissal of a petition. Id. at 487. 23 substantial presence and from which paychecks originated), aft' d, 426 Fed. Appx. 33 (2d Cir. 2011); Garber Bros. v. Evlek, 122 F.Supp. 2d 375, 379 (E.D.N.Y. 2000) (enforcing Massachusetts choice-of-law clause where employer was headquartered in Massachusetts even though employee's sales territory was in New York). While Johnson and Lawley implausibly contend that BBI was not a party to the agreement, this is contravened by the record. As the Fourth Department noted, the Employment Agreement expressly states 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." Order at 3. Moreover, contrary to Johnson and Lawley's misleading contentions, the record evidences numerous contacts between Johnson and Florida, many cited by the Fourth Department in its ruling, which, in the aggregate, provide more than ample basis for deeming the Florida choice-of-law clause to be reasonable. Among other things, BBI is expressly identified in the Employment Agreement and the employee handbooks as one of Johnson's employers. R. at 71, 266. BBI administered Johnson's salary in Florida, paid her from its Florida bank account, and administered her employee benefits including her 401(k) from Florida; Johnson traveled to Florida on at least one occasion for training; and Johnson 24 agreed to send all notices required by her Employment Agreement directly to BBl. R. at 267, 281. Tellingly, when Johnson sought to submit complaints about her manager just prior to leaving B&B's employ, she threatened to complain directly to BBI's human resources department in Florida- and not to personnel in New York. R. at 267. All of these factors strongly support the Fourth Department's ruling. Equally unsupported by the record is Johnson and Lawley's contention that BBI played no meaningful role in the agreement or Johnson's employment. Opposition at 43. In fact, BBI is the parent company of BBNY and manages and controls BBNY from Florida. R. at 265-67, 282. BBI directs BBNY's sales strategies, sets sales goals, and supplies BBNY with promotional and educational materials. R. at 266-67. BBI also organizes national sales meetings and seminars which staff from BBNY regularly attends. R. at 267-68. In short, the record shows there are ample connections between Johnson and BBI in Florida and between BBNY and BBI, thereby providing a much more than sufficient basis to conclude that the parties' choice of Florida law was reasonable, as the Fourth Department correctly ruled. 25 POINT II. JOHNSON AND LAWLEY FAIL TO ESTABLISH THAT ON THE LIMITED RECORD BEFORE THE COURT B&B ENGAGED IN OVERREACHING SUFFICIENT TO BAR PARTIAL ENFORCEMENT AS A MATTER OF LAW B&B'S Opening Brief conclusively showed that even applying New York law (in contravention of the parties' agreement), it is nonetheless clear that there is no basis to sustain the Fourth Department's ruling that B&B's supposed overreaching precludes even the possibility of partial enforcement as a matter of law. Opening Brief, Point II. Johnson and Lawley have failed to refute this showing. A. Johnson and Lawley Misstate the Burden ofProofand the Correct Standard of Review Before addressing these issues substantively, it should be noted at the outset that Johnson and Lawley have misstated both the burden of proof on this summary judgment motion and the appropriate standard for appellate review. As to the burden of proof, while Johnson and Lawley contend that it is B&B's "burden" to demonstrate the "absence" of overreaching, Opposition at 48, this is not the case. On the contrary, it is Johnson and Lawley's burden, as movants, "to establish 'a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact"' as to whether B&B engaged in improper overreaching. 26 Voss v. Netherlands Ins. Co., 22 N.Y.3d 728,734 (2014) (citations omitted). See also Powers v. 31 E 31 LLC, No. 153, 2014 WL 5325471, at *4 (N.Y. Oct. 21, 2014) (discussing "defendants' burden to present a prima facie showing of entitlement to judgment as a matter of law"). Stated otherwise, Johnson and Lawley are required to eliminate any doubt as to whether B&B engaged in overreaching. See Powers, 2014 WL 5325471, at *3. Furthermore, as the opponent to the motion for summary judgment, B&B must be given the benefit of every reasonable evidentiary inference. See, e.g., Reliable Enterprises, Inc. v. Nagori Contracting Corp., No. 11355/10, 2014 WL 5001219, at *1 (2d Dep't Oct. 8, 2014) (on motion for summary judgment, "the court must view the evidence in the light most favorable to the nonmovant") (citing Voss, 22 N.Y.3d at 734-35). 7 Johnson and Lawley further contend that this Court should review the Fourth Department's determination that B&B engaged in improper overreaching as a matter of law based on an abuse of discretion standard. See Opposition at 46, Point II. This misstates the appropriate standard of review on this appeal from an order granting partial summary judgment. As indicated by its recent decisions, this Court does not review summary judgment determinations by applying an abuse of 7 While it may be B&B's ultimate burden at trial to demonstrate the absence of overreaching, on a summary judgment motion, the evidentiary burden is on the moving party to prove the absence of any factual issue. See Voss, 22 N.Y.3d at 734 (fact that non-moving party ultimately has burden at trial does not shift evidentiary burden to non-moving party for purposes of opposing summary judgment). 27 discretion standard but rather as a matter of law. See Voss, 22 N.Y.3d at 734-36; Powers, 2014 WL 5325471, at *5. Critically, the cases cited by Johnson and Lawley to support this "abuse of discretion" standard of review do not involve summary judgment motions. Opposition at 46. Opposition at 46. See, e.g., De Zimm v. Connelie, 64 N.Y.2d 860, 862 (1985) (determination of whether disclosures of particular sections of the Administrative Manual would reveal criminal investigative techniques and procedures reviewed on abuse of discretion standard); Pavlou v. City of New York, 8 N.Y.3d 961, 963 (2007) (order granting new trial reviewed for abuse of discretion); Holterman v. Holterman, 3 N.Y.3d 1, 8 (2004) (distribution of marital property reviewed on abuse of discretion standard). While the ultimate decision to engage in blue-penciling may be equitable and arguably discretionary in nature, the core issue before the Court is whether the Fourth Department, on the limited record before it, correctly determined that there was no doubt that B&B engaged in improper overreaching as a matter of law. This is plainly a question of law on which clear-cut legal standards come to bear. It should be noted, however, that the Fourth Department's ruling would be subject to reversal even if the Court were to apply an abuse of discretion standard- which it should not - given that there is no basis for sustaining any of the Fourth Department's findings, as set forth below. 28 B. Johnson and Lawley Fail to Identify Any Cognizable Grounds for Sustaining the Fourth Department's Ruling that B&B Engaged in Improper Overreaching Johnson and Lawley fail to identify any cognizable grounds for sustaining any of the three findings underlying the Fourth Department's ruling that B&B engaged in overreaching sufficient to bar partial enforcement. As the three findings by the Fourth Department are the only "evidence" of overreaching which Johnson and Lawley have ever proffered, there is no basis for them to be awarded summary judgment on this motion. 1. Johnson and Lawley Fail to Show that the Timing of the Signing of the Employment Agreement Is Evidence of Bad Faith Johnson and Lawley essentially contend that the Fourth Department was "required" to find that B&B engaged in overreaching merely because Johnson signed the Employment Agreement on her first day of work. Opposition at 50. This, however, is not the law. As B&B's Opening Brief demonstrated, New York courts have held exactly the opposite: there is no per se rule requiring a finding of overreaching merely because the employment agreement was signed on the employee's first day of work, particularly where, as here, the record shows that the employer did not coerce or otherwise force the employee's agreement. Opening Brief, Point II(C)(i). This was the precise holding of the courts in Ashland Mgt. Inc. v. Altair Investments NA, LLC, 59 A.D.3d 97 (1st Dep't 2008) and Portware, LLC v. Barot, 29 No. 603738/05, 2006 WL 516816 (N.Y. Sup. Ct. Mar. 2, 2006), cases cited in the Opening Brief which Johnson and Lawley fail to distinguish or even address. Unsurprisingly, Johnson and Lawley resort to considerable factual elaboration in attempting to demonstrate that B&B engaged in coercive conduct- contending that B&B "force[ s ]" all employees to sign overbroad agreements, that B&B lured Johnson from her prior employment in order to "[spring] a trap," and that Johnson was offered nothing of value in exchange for signing the Employment Agreement. Opposition at 50-52. In fact, all of these contentions are flatly contradicted by the record. Far from coercively extracting Johnson's signature, the record shows that B&B encouraged Johnson, as it does with all its employees, to take the time required to review and understand the agreement before signing. R. at 279-80. Johnson was also afforded an opportunity to consult with counsel prior to signing, an opportunity many other B&B employees have taken advantage of. R. at 280. Nor is it correct for Johnson and Lawley to say that Johnson's signing of the agreement conferred no benefit upon her. On the contrary, B&B provided Johnson, who had not previously been a broker, training and experience in her new role as a broker and assisted her in obtaining her broker's license, which B&B paid for. R. at 268-69. Critically, B&B also made its client base available to Johnson. R. at 271-72. Certainly, B&B had a legitimate basis to ask Johnson, in exchange 30 for these benefits, to sign the Non-Solicitation Covenant, so that B&B would be protected from Johnson improperly exploiting the client access provided to her under B&B's auspices. In short, even on this limited factual record, there is clear evidence contradicting Johnson and Lawley's version of events. As such, there is plainly no basis for a ruling that B&B overreached as a matter of law- particularly giving the benefit of every evidentiary inference to B&B, as is required on this motion. At the very least, there are glaring factual issues regarding the facts and circumstances surrounding Johnson's initial employment, rendering it inappropriate for the Court to render judgment as a matter of law on this early motion. 2. Johnson and Lawley Fail to Demonstrate that B&B Was Required to Tailor the Non-Solicitation Covenant to the New York Court's Decision in BDO As demonstrated in the Opening Brief, the Fourth Department erred in finding that this Court's decision in BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) put B&B on notice that the Non-Solicitation Covenant was overbroad. Contrary to the Fourth Department's ruling, B&B was not obligated to tailor the Employment Agreement to New York law for the simple reason that the Employment Agreement is, and was intended to be, governed by Florida law. Opening Brief, Point II(C)(ii). 31 In their opposition, Johnson and Lawley unsurprisingly contend that B&B was "required" to tailor the Employment Agreement to conform to BDO despite the Florida choice-of-law clause. Opposition at 54-57. However, Johnson and Lawley's only professed rationale for this contention is that BBNY is a "New York company operating essentially only in New York with New York employees." Opposition at 55. This is precisely the argument which the Fourth Department rejected when it determined the choice-of-law provision was reasonable, based on the parties' multiple links with Florida. See Order at 3. The plain fact is that B&B was fully justified in believing the choice of Florida law to be reasonable and that Florida law would and should govern the Employment Agreement. It certainly would have had no reason to believe that Florida law would one day be invalidated on public policy grounds. Prior to the Fourth Department's Order, no court had ever ruled that Florida employment law was repugnant to fundamental New York policy, and B&B had no basis for believing that a court would make such a ruling. 8 8 Unable to plausibly argue that B&B was bound to tailor its agreement to New York law, Johnson and Lawley contend that B&B was required to conform the Employment Agreement to BDO because that case has been cited in various other courts around the country. Opposition at 55. However, in the one specific case cited by Johnson and Lawley, Brown & Brown, Inc. v. Ali, 494 F.Supp. 2d 943 (N.D. Ill. 2007), the court did no more than note that the defendant had cited a Florida case quoting BDO and then proceeded to distinguish BDO from the defendant's case. 494 F.Supp. 2d at 951. Johnson and Lawley also contend that B&B was on notice that the Non-Solicitation Covenant is overly broad under Florida law. While Johnson and Lawley contend that B&B has conceded the Non-Solicitation Covenant is overbroad, Opposition at 56, B&B has made no such 32 Finally, Johnson and Lawley claim that B&B was somehow "prepared" for the application of New York law because the presence of the severability clause anticipated that Florida law would one day be invalidated. Opposition at 56. While one of many reasons for B&B to include a severability clause was protection against the narrow possibility that a Florida choice-of-law clause could be invalidated, it by no means follows that B&B was accordingly required to tailor the Employment Agreement to New York law. If that were the governing standard, then every choice-of-law clause in every contract would effectively be vitiated because in every contract there is always at least a "narrow possibility" that a court would one day rule the choice of law to be inapplicable. In short, B&B was not required to conform the Employment Agreement to BDO or any other New York law, and the Fourth Department's ruling on this issue was erroneous. C. Johnson and Lawley Fail to Show that the Mere Existence of a Severability Clause Should Be Construed as Evidence of Overreaching In its opening brief, B&B demonstrated that it was clear error for the Fourth Department to conclude that the Employment Agreement's severability clause- a concession and, in fact, it is not so. However, on this appeal, there is no reason for the Court to reach the issue of the covenant's alleged over breadth under Florida law, given that B&B does not seek full enforcement of the Non-Solicitation Covenant as written and merely seeks to prevent Johnson from soliciting the customers with whom she dealt while in B&B's employ. 33 standard provision routinely found in contracts- evidenced B&B's supposed bad faith. Opening Brief, Point II(C)(iii). Johnson and Lawley do not dispute that this is a standard contractual provision. Nor do they argue that the Fourth Department's ruling on this point should be affirmed or that there is any basis for this Court to rule that the mere existence of a severability clause constitutes evidence of overreaching. In fact, Johnson and Lawley have effectively conceded that the existence of a severability clause does not evidence overreaching, and it does not. Unable to defend the Fourth Department's actual ruling, Johnson and Lawley contend that the court did not really mean to find that the severability clause constituted evidence of bad faith and only meant to say that the severability clause did not mandate partial enforcement of the restrictive covenant. Opposition, at 57-58. This interpretation is directly contrary to the text of the Order. In fact, the Fourth Department expressly found that inclusion of the severability clause evidenced bad faith, stating that: "In our view, the fact that the Agreement here contemplated partial enforcement does not demonstrate the 'absence of overreaching' on plaintiffs' part, but, rather, demonstrates that plaintiffs 'imposed the covenant in bad faith, knowing full well that it was overbroad."' Order at 7 (citations omitted). 34 It is respectfully submitted that this is an unprecedented holding, which has no basis in law or logic and which has the clear potential to substantially disrupt the reasonable and settled expectations of parties to innumerable contracts. See Opening Brief at 50-52. Johnson and Lawley do not dispute this. Accordingly, the Fourth Department's ruling on this issue should be reversed.9 D. Johnson and Lawley's Arguments Concerning Absence of Mutuality Are Not Properly Before the Court and in Any Event Provide No Basis for Reversing the Fourth Department's Order Johnson and Lawley argue that this Court should reverse the Fourth Department's holding that there is no basis to render the restrictive covenants unenforceable based on a supposed absence of mutuality. This issue is not properly before this Court. Indeed, Johnson and Lawley specifically moved the Fourth Department for leave to appeal the court's ruling on this very issue and the motion was denied. Addendum to Brief of Defendants-Respondents at 112; R. at 587. Given the Fourth Department's denial of Johnson and Lawley's motion for leave to appeal, Johnson and Lawley have no basis to contend now that this issue is properly before 9 While effectively conceding that the Fourth Department's ruling is unsustainable, Johnson and Lawley nonetheless contend that B&B should somehow be barred from challenging the court's finding on this issue because the Fourth Department's ruling was not a "decisive question of law." Opposition a 59-60. In fact, as noted above, the Fourth Department's ruling that B&B engaged in overreaching as a matter of law was not a discretionary determination, but a legal ruling to be reviewed on a de novo basis. As the Fourth Department's finding on the severability clause was one of three predicate findings for the court's legal ruling that B&B engaged in overreaching, it is plainly reviewable by this Court. 35 the Court, and Johnson and Lawley's arguments on this point should not be considered. However, in the event the Court were to review Johnson and Lawley's contentions on this issue (and it should not), it is nonetheless clear that there is no basis for reversing the Fourth Department's ruling. Johnson and Lawley's core contention is that because Johnson was supposedly terminated without cause (which is in itself a disputed factual issue, as the Fourth Department recognized), there was no mutuality of obligation between the parties, and the restrictive covenants in the Employment Agreement should be deemed to be unenforceable. Opposition at 60-63. In fact, there is no legal authority supporting this position under New York law. As both the Fourth Department and the trial court correctly recognized, termination without cause is a basis for invalidating restrictive covenants only in cases where the employer seeks a forfeiture of earned income based on the employee's breach of the restrictive covenant, as was the case in Post v. Merrill Lynch, Pierce, Fenner & Smith, 48 N.Y.2d 84 (1979) (finding policy "preclude[ s ]the enforcement of a forfeiture-for-competition clause where the termination of employment is involuntary and without cause"). See also Wise v Transco, Inc., 73 A.D.2d 1039, 1039 (4th Dep't 1980) (distinguishing Post as 36 involving forfeiture of rights under a pension plan and declining to find forfeiture unreasonable as a matter of law merely because of involuntary termination). In any event, Johnson and Lawley's contention that no mutuality existed between Johnson and B&B because of Johnson's supposed termination without cause is meritless. Johnson continued working for B&B for more than a substantial time period following her signing of the Employment Agreement - a full four years- a fact which New York courts have consistently held to be reflective of mutuality. Zellner v. Stephen D. Conrad, M.D., P.C., 183 A.D.2d 250, 256 (2d Dep't 1992) (substantial continued employment following signing of a restrictive covenant found to constitute sufficient consideration to enforce covenant following termination of at-will employee); Int'l Paper Co. v. Suwyn, 951 F.Supp. 445,448 (S.D.N.Y. 1997) ("Where any employment relationship continues for a substantial period after the covenant is given, the forbearance necessary to constitute consideration is real, not illusory and the consideration given for the promise is validated.") (citations omitted) (internal quotation marks omitted). Moreover, in addition to being well-compensated, Johnson received considerable further benefits from B&B, including assistance with obtaining a broker's license, training as a broker, and introduction to B&B clients- all factors which strongly support a finding that there was mutuality between the parties. R. at 268-69, 271-72. 37 Finally, the predicate for Johnson and Lawley's contention that no mutuality existed- Johnson's allegation that she was terminated without cause- is itself inaccurate. The record before the Court shows that during her last year of employment with B&B, Johnson was openly rude, disrespectful and abrasive in her interaction with customers, could not work effectively with her B&B colleagues, and failed to meet important deadlines - all factors supporting a finding that Johnson was terminated for cause. R. at 273-75. At the very least, as the Fourth Department recognized, the nature of and circumstances surrounding her termination is a factual issue that cannot be decided on this appeal. See Order at 6. In short, Johnson and Lawley's argument that lack of mutuality presents an alternate grounds for affirming summary judgment is not only improperly raised before this Court but also substantively baseless and, accordingly, should be given no credence by the Court. E. Johnson and Lawley Fail to Refute B&B's Showing that the Fourth Department Erred in Awarding Summary Judgment Based on a Limited Factual Record and Before Basic Discovery Had Been Conducted B&B's Opening Brief showed that there was no basis for the Fourth Department to rule that B&B engaged in improper overreaching as a matter of law based on an extremely limited factual record and before basic party discovery had been conducted. Opening Brief, Point II(D) 38 In their Opposition, Johnson and Lawley chiefly contend that the Court should not address this issue because it was not raised by B&B before the trial court. Opposition at 64-65. This, however, is inaccurate. On the contrary, the moving memorandum of law that B&B submitted to the trial court in opposition to Johnson and Lawley's motion specifically argued that the motion was premature and that further discovery was needed and cited case law to support this position. Opening Brief ADD at 35. Thus, the prematurity of this summary judgment motion is an issue that is unquestionably preserved for this Court's review. Johnson and Lawley also contend that the limited nature of the record now before the Court is something which B&B may only challenge under an abuse of discretion standard. Opposition at 65. This is not accurate. In fact, it is respectfully submitted that it was legal error for the Fourth Department to rule, based on the very limited record before it, that B&B had engaged in improper overreaching as a matter of law. Therefore, the limited nature of the record is a factor which this Court should analyze under a de novo standard. In any event, however, even if the Court elects to treat the Fourth Department's rejection of the need for discovery purely as a discretionary ruling, the Fourth Department's ruling on this issue constituted a patent abuse of discretion. Indeed, it is undisputed that Johnson and Lawley made the motion for summary judgment at the inception of this litigation -less than a month after issue 39 was joined and when basic party discovery was nowhere close to completion. Opening Brief ADD at 35. To contend that B&B was "dilatory" by not more aggressively seeking discovery, Opposition at 65-66, when the motion was made before the discovery period had barely gotten under way is not a serious or sustainable argument. Johnson and Lawley also contend that notwithstanding the quintessentially factual nature of the "overreaching" issue at bar, full discovery is somehow not necessary because all relevant facts are within the knowledge of B&B. Opposition at 66-68. This is likewise not a viable argument. As a matter of basic logic, a determination of whether overreaching has occurred in entering an employment contract requires full discovery from not merely the employer, B&B, but also the employee, Johnson. Here the only "evidence" of overreaching currently in the record is Johnson's conclusory allegations in her affidavit that she was coerced, R. at 135, which is directly contravened by the testimony submitted by B&B, including the affidavits of Cynthia Smith and Linda Taylor, R. at 265-66, 279-80. At a bare minimum, B&B is entitled to take Johnson's deposition in order to probe the basis of her contention that she felt "coerced" into signing, Opposition at 68, and ascertain the true circumstances surrounding her decision to leave her prior employment and join B&B. 40 When a party affidavit is presented as key evidence on a determinative factual issue, as is the case with Johnson's affidavit here, the opposing party must be afforded an opportunity to take the affiant's deposition and test the truth of her contentions through the deposition process. Campaign for Fiscal Equity v. State, 182 Misc. 2d 676, 679 (N.Y. Sup. Ct. 1999) ("witnesses who submit affidavits in lieu of direct testimony shall be available for cross-examination"). To contend otherwise is to vitiate a vital - indeed, indispensable - component of the discovery process. While Johnson and Lawley contend it is "baseless speculation" to assume that Johnson would have contravened her affidavit at deposition, Opposition at 68, Johnson's deposition had not even been taken at the time this motion was made. B&B is plainly entitled to have the opportunity to use Johnson's deposition testimony in opposing summary judgment, an opportunity it was denied due to the timing of this motion. In short, it was reversible error for the Fourth Department to reach its ruling on the limited record before it. 41 CONCLUSION For all of the foregoing reasons, it is respectfully submitted that the portions of the Fourth Department's Order which ruled that the parties' choice of Florida law was unenforceable on public policy grounds and that partial enforcement of the Employment Agreement's Non-Solicitation Covenant was precluded as a matter of law should be reversed. Dated: November 10, 2014 New York, New York Respectfully submitted, SATTERLEE STEPHENS BURKE & BURKELLP ~~ J.. Gc ;:;u Thomas J. Ca , Esq. Alun W. Griffiths, Esq. Glenn C. Edwards, Esq. 230 Park Avenue New York, New York 10169 Tel: (212) 818-9200 WARD GREENBERG HELLER & REIDY LLP Eric J. Ward, Esq. Tony R. Sears, Esq. 300 State Street Rochester, New York 14614 Tel: (585) 454-0700 LITTLER MENDELSON P.C. DavidS. Warner, Esq. James M. Witz, Esq. 900 Third Avenue New York, New York 10022 Tel: (212) 583-9600 Attorneys for Plaintiffs-Appellants 42