Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Is Your Choice-of-Law Provision “Truly Obnoxious?”

Author: Joel N. Kreizman

Date: January 13, 2016

Key Contacts

Back

How is your Choice-of-Law Provision?

New York businesses may want to review the choice-of-law provisions in their non-competition and non-solicitation agreements. In a recent decision, the New York Court of Appeals refused to enforce the choice-of-law provision in an employment agreement purporting to apply Florida law after finding that “applying Florida law on restrictive covenants related to the non-solicitation of customers by a former employee would violate the public policy of this state.”

Choice-of-Law Provision

The Facts of the Case

Plaintiff Brown & Brown of New York, Inc. (BBNY) recruited defendant Theresa A. Johnson to leave her former job to work for BBNY. On Johnson’s first day, she signed an employment agreement containing a Florida choice-of-law provision and a non-solicitation provision. The non-solicitation provision precluded Johnson, for two years following her termination of employment, from directly or indirectly soliciting, accepting or servicing any person or entity “that is a customer or account of the New York offices of [BBI and BBNY] during the term of this Agreement,” as well as certain prospective customers.

After working for BBNY for several years, Johnson was terminated. Less than one month later, she began working for defendant Lawley Benefits Group, LLC, a competitor of BBNY.

Shortly thereafter, BBNY filed suit to enjoin alleged violations of the agreement by Johnson and to recover damages against both Johnson and Lawley. The lower courts dismissed the claims related to the non-solicitation provision, finding that that the Florida choice-of-law provision was unenforceable.

The Court’s Decision

The New York Court of Appeals agreed that the Florida choice-of-law provision was unenforceable as against public policy. In reaching its decision, the state’s highest court acknowledged that parties are generally free to reach agreements on whatever contractual terms they prefer. However, it also emphasized that courts will not “enforce agreements…where the chosen law violates ‘some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.'” The court also noted that the public policy exception is reserved “for those foreign laws that are truly obnoxious.”

In this case, the court compared Florida and New York law concerning restrictive covenants in employment agreements. While it found similarities with respect to the extent that they both require restrictive covenants to be reasonably limited in time, scope and geographical area, and to be grounded in a legitimate business purpose, it also noted several key differences that made Florida’s law incompatible with the rationale behind New York’s restrictive covenant jurisprudence. As the opinion explains:

Considering Florida’s nearly-exclusive focus on the employer’s interests, prohibition against narrowly construing restrictive covenants, and refusal to consider the harm to the employee — in contrast with New York’s requirements that courts strictly construe restrictive covenants and balance the interests of the employer, employee and general public — defendants met their “‘heavy burden’ of proving that application of Florida law[to the non-solicitation provision of the parties’ agreement] would be offensive to a fundamental public policy of this State.”

Message for New York Businesses

In light of the court’s decision in Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364 (2015), New York employers should be sure to evaluate the applicable laws of any jurisdiction named in a choice-of-law provision. If the laws are vastly different, particularly with respect to the burdens placed on employers vs. employees, they may be deemed unenforceable.

Message for New Jersey Businesses

The New Jersey Supreme Court, since at least 1992, has similarly held that choice of law contractual provisions that violate New Jersey’s public policy will not be enforced.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Corporate Consolidation and Antitrust Issues in Mergers post image

Corporate Consolidation and Antitrust Issues in Mergers

Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]

Author: Dan Brecher

Link to post with title - "Corporate Consolidation and Antitrust Issues in Mergers"
Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators post image

Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators

NYC Real Estate and Litigation Attorney Ryan O. Miller and Team Join Scarinci Hollenbeck, LLC New York City, NY – August 13, 2025 – Scarinci Hollenbeck, LLC has strengthened its Real Estate and Litigation practices with the addition of four New York City-based attorneys. Ryan Miller, who joins as a partner, is well known for […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators"
What is Business Law and Why Is it Important? post image

What is Business Law and Why Is it Important?

Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]

Author: Dan Brecher

Link to post with title - "What is Business Law and Why Is it Important?"
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!