Arthur Young & Co. v. Black

— Motion granted insofar as to recall and vacate the order of this court entered on August 11, 1983 and the memorandum decision (96 AD2d 784) filed therewith, and to substitute therefor a new order and memorandum released simultaneously with the order on this motion. Order entered February 4,1983 in Supreme Court, New York County (Rena K. Uviller, J.), which granted plaintiff’s motion for a preliminary injunction modified, on the law and the facts and in the exercise of discretion, and the injunction is limited to those clients of plaintiff who were never formerly clients of defendant or his father, and the order is otherwise affirmed, without costs. Plaintiff, a nationwide accounting firm with 700 partners, seeks to enjoin defendant, a former partner, from competing with it for the business of clients defendant serviced while in plaintiff’s employ. It is alleged that the seven clients Black has approached are worth $150,000 in fees, with at least three of them already switching their $36,500 worth of business to defendant. The noncompetition clause which plaintiff wants enforced is part of the October 1, 1979 revision of Arthur Young’s articles of partnership. Defendant signed it then, when he was a partner. The contested clause states in pertinent part: “I further agree that for a period of two years after I withdraw from the firm that I will not without its prior written consent, provide professional services such as those provided by the firm to any client of the firm, or for the purpose of providing such professional services, solicit or participate in the solicitation of any client of the firm, which was a client of the firm any time during the twelve months prior to my withdrawal and for whom I provided any service in the five year period preceding my withdrawal. I further agree that prior to my withdrawal, without prior written permission of the firm, I will not discuss with any client of the firm my intention to withdraw from the firm (except if withdrawal is for retirement or to enter a business which does not compete with the firm) nor will I solicit any such client.” Defendant states that he was fired and did not “withdraw”. In addition, we note that there is no allegation that defendant was privy to trade secrets or insider information, or that his services as -an accountant are special, .unique or extraordinary. (See, e.g., Columbia Ribbon & Carbon Mfg. Co. v A-l-A Corp., 42 NY2d 496.) While “[e]ach case must, of course, depend, to a great extent, upon its own facts” (Karpinski v Ingrasci, 28 NY2d 45, 49), it is not at all clear that the plaintiff would probably succeed on the merits. {Reed, Roberts Assoc, v Strauman, 40 NY2d 303; Lynch v Bailey, 370 275 App Div 527, affd 300 NY 615; People v Canal Bd., 55 NY 390, 394-395; compare Post v Merrill Lynch, Pierce, Fenner & Smith, 48 NY2d 84, 89 [per Wachtler, J.]; but see Handler & Lazaroff, Restraint of Trade and the Restatement [Second] of Contracts, 57 NYU L Rev 669, 717-720.) Moreover, without even reaching the merits, plaintiff has hardly shown that the loss of $36,500 worth of business from its $800 million revenues will cause it the “immediate and irreparable injury” required for the grant of an injunction (CPLR 6301). Rather, a balance of the equities shows defendant to be the party who will be seriously burdened by such a decree. On the other hand, there is no reason not to enforce the injunction as to clients of plaintiff who had no contact with defendant or his father prior to defendant joining plaintiff’s firm, or as to clients brought into the firm and serviced by defendant after his joining plaintiff’s firm. Although ultimately monetary damages would be compensation to plaintiff, we prefer to maintain a status quo that will encourage the parties to quickly resolve their differences at a trial on the merits. Concur — Carro, Fein and Alexander, JJ. Sandler, J. P., concurs in a memorandum, and Asch, J., dissents in a memorandum, as follows: