Ikon Off. Solutions, Inc. v Usherwood Off. Tech., Inc.

[*1] Ikon Off. Solutions, Inc. v Usherwood Off. Tech., Inc. 2008 NY Slip Op 52499(U) [21 Misc 3d 1144(A)] Decided on December 12, 2008 Supreme Court, Albany County Platkin, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 12, 2008
Supreme Court, Albany County

Ikon Office Solutions, Inc., Plaintiff,

against

Usherwood Office Technology, Inc., LOUIS TUBOLINO, KEN HERKERT, MICHAEL SERIANNI, JASON KINSEY, EILEEN M. BURNS, JAMES A. SPENCER, AUDREY MATIAS and DAVID F. LEWIS, Defendants.



9202-08



APPEARANCES:

Herzog Law Firm, P.C.

Attorneys for Plaintiff

(James M. Reilly, of counsel)

7 Southwoods Boulevard

Albany, New York 12211

Duane Morris LLP

Attorneys for Plaintiff

(Thomas T. Loder, of counsel)

30 South 17th Street

Philadelphia, Pennsylvania 19103

Hancock & Estabrook, LLP

Attorneys for Defendants Other than Ken Herkert

(Michael J. Sciotti and Maureen E. Maney, of counsel)

150 AXA Tower I

100 Madison Street

Syracuse, New York 13202

Hacker & Murphy, LLP

Attorneys for Ken Herkert

(James Hacker and John Harwick, of counsel)

7 Airport Boulevard

PO Box 104

Latham, New York 12110

Richard M. Platkin, J.

Plaintiff IKON Office Solutions, Inc. ("IKON") moves, by Order to Show Cause, for a preliminary injunction against defendants Louis Tubolino, Ken Herkert, Michael Serianni, Jason Kinsey, Eileen M. Burns, James A. Spencer, Audrey Matias and David F. Lewis (collectively "the individual defendants"), restraining them from soliciting the customers and accounts to which they were assigned while employees of IKON. In addition, plaintiff seeks to restrain all defendants, including Usherwood Office Technology, Inc. ("Usherwood"), from soliciting, recruiting or hiring any of plaintiff's employees to leave employment with IKON and/or take employment with Usherwood. Defendants oppose the application.

BACKGROUND

Plaintiff IKON is engaged in the business of selling, leasing and servicing office equipment and systems, including stand alone and/or networked systems for digital and analog document reproduction, printers, telecopiers, technical support services, systems analysis, equipment maintenance and repair, supplies and related goods and services.

Each of the individual defendants was, until recently, employed by IKON. Defendant Louis Tubolino was a Production Sales manager in plaintiff's Troy, New York office ("Troy office"), supervising Black & White and Color High Volume Production sales representatives. According to plaintiff's complaint, Mr. Tubolino was responsible for more than $9 million in annual IKON equipment sales.

Defendant Ken Herkert was an Account Executive assigned to manage approximately 280 actual and prospective IKON customers served out of the Troy office. Plaintiff alleges that Mr. Heckert generated $750,000 in annual equipment sales revenue to IKON.

Defendant Michael Serianni was a Color Representative and Production Specialist, serving IKON customers with black and white, high volume and color copier needs out of the Troy office. According to plaintiff, Mr. Serianni was responsible for more than $4 million in equipment sales annually for IKON.

Defendant Jason Kinsey was a Major Account Representative, assigned to manage approximately 70 actual and prospective customers out of the Troy Office. Plaintiff alleges that Mr. Kinsey generated more than $650,000 in annual equipment sales revenue to IKON.

Defendant Eileen M. Burns was a Major Account Executive, assigned to manage 38 actual and prospective IKON customers out of the Troy office. She generated over $1.4 million in annual equipment sales, according to plaintiff's complaint.

Defendant James Spencer was an IKON copier technician who worked in the Troy office. He was assigned to service the equipment of hundreds of IKON customers.

Defendant Audrey Matias was a Major Account Representative assigned to manage approximately 65 actual and prospective customers out of IKON's Binghamton, New York [*2]office. According to IKON, she was responsible for more than $1.75 million in annual equipment sales revenue to the company.

Defendant David F. Lewis also served as a Major Account Representative in the Binghamton office. IKON alleges that he generated almost $900,000 in annual equipment sales revenue.

Each of the individual defendants left employment with IKON during the period from October 31, 2008 through November 4, 2008. During the same period, all but Mr. Herkert commenced employment with defendant Usherwood, a Syracuse based corporation that also is engaged in the business of selling, supporting and servicing office equipment and related systems. Prior to its hiring of the individual defendants, Usherwood had no office in the Capital District.

It is IKON's contention that Usherwood began offering guarantees, bonuses and other substantial financial inducements to the individual defendants (and others) as part of an organized campaign to establish a "ready made" sales office in the Capital Region. According to plaintiff, certain of its employees assisted in these efforts, in violation of non-solicitation clauses contained in their employment agreements with IKON. Plaintiff further alleges that these former employees intend to use IKON's trade secrets, confidential business information, customer relationships and goodwill to divert current IKON customers to Usherwood, again in violation of their employment agreements.

Defendants deny these allegations and direct the Court's attention to other events during this period that allegedly bear on plaintiff's application. As of October 31, 2008, IKON was acquired by Ricoh, a manufacturer of copiers and related office equipment and supplies. As a result of this acquisition, IKON no longer is an authorized retailer of Canon products, though it may continue to sell its existing inventory of Canon equipment and provide spare parts and service to its current customers for the next several years. Relatedly, Usherwood no longer is authorized to sell Ricoh brand equipment.

The individual defendants, each of whom claims to have devoted a substantial portion of their employment at IKON to selling, supporting and/or servicing Canon labeled equipment, claim that their decision to leave IKON and accept employment with Usherwood, an authorized Canon retailer, was based on legitimate concerns regarding the effect of the acquisition on their livelihood and future with IKON.

Plaintiff filed its complaint in this action on November 7, 2008. The complaint alleges, inter alia, that the activities of the individual defendants constitute a breach of the post-employment covenants against competition and employee solicitation set forth in their employment agreements. Plaintiff further claims that the individual defendants misappropriated IKON's trade secrets and other confidential business information and seek to use such data to IKON's competitive detriment. The same trade secret claim is alleged against Usherwood, as well as claims of unfair business competition and variety of other business torts.

Upon commencement of this action, plaintiff presented the undersigned with a proposed Order to Show Cause ("OTSC"), bringing on an expedited application for preliminary injunctive relief. The OTSC proposed by plaintiff also included a temporary restraining order ("TRO"), substantially similar in form to the requested preliminary injunction. The Court set a return date of November 20, 2008 for the preliminary injunction motion and granted some, but not all, of the [*3]temporary relief sought by IKON.

Specifically, as modified by the Court, the TRO prohibits: (1) the individual defendants from soliciting, contacting or engaging in any business with any customer to which they were assigned, had management or sales responsibility or account specific information during the two year period proceeding their termination of employment with plaintiff; (2) all defendants from using or disclosing plaintiff's trade secrets or confidential business information; and (3) the individual defendants from soliciting, recruiting or hiring any of plaintiff's employees to leave employment with IKON and/or to take employment with Usherwood.[FN1]

Following briefing by the parties, oral argument was held on November 25, 2008. On the morning of argument, plaintiff presented the Court with a supplemental affirmation providing newly discovered evidence allegedly bearing on its claims. The Court received this submission without objection and permitted defendants to file supplemental opposition papers by December 2, 2008. This Decision & Order follows.

LEGAL STANDARD

In order to obtain a preliminary injunction, the moving party must demonstrate "that irreparable harm will occur if the injunction is not granted, that such party has a likelihood of success on the merits, and that the balance of equities tip in its favor" (Marietta Corp. v Fairhurst, 301 AD2d 734, 736 [3d Dept 2003] [citation omitted]). In determining whether plaintiff has met this standard, the Court is mindful that a preliminary injunction is a "drastic remedy which is not routinely granted" (id.).

LIKELIHOOD OF SUCCESS

Plaintiff's application for preliminary injunctive relief is premised on two theories. First, IKON contends that an injunction is necessary to prevent the continued misappropriation and misuse of its trade secrets and confidential business information. Second, plaintiff argues that preliminary injunctive relief is required to enforce the restrictive covenants contained in the employment agreements executed by the individual defendants. While there is some degree of analytical overlap between these theories, the former claim for relief, sounding in trade secret protection, is independent of any rights that IKON may have to enforce the restrictive covenants. The Court considers plaintiff's likelihood of success on each theory in turn.

A.MISAPPROPRIATION/MISUSE OF TRADE SECRETS

The Court begins with plaintiff's contention that the identity of its customers and the details of their equipment needs, preferences and business arrangements with IKON, including lease expiration dates, constitute protectable trade secrets and/or confidential business information under New York law. On that basis, plaintiff argues that a preliminary injunction restraining the individual defendants from soliciting the IKON customers whom they were assigned, had management or sales responsibilities or learned account-specific information prior to the termination of their employment is necessary to protect against the continuing misappropriation and misuse its trade secrets. [*4]

In response, defendants argue that the information sought to be protected by IKON does not qualify for trade secret protection. In this connection, defendants assert that the information that plaintiff seeks to protect is readily available from a variety of sources in the trade.

1.Protectable Trade Secrets

Courts in New York generally follow Section 757 of the Restatement of Torts in determining whether business information qualifies as a trade secret (see Ashland Mgt. v. Janien, 82 NY2d 395, 407 [1993]). Under this definition, a trade secret is " any formula, pattern, device or compilation of information which is used in one's business, and which gives [the business] an opportunity to obtain an advantage over competitors who do not know or use it'" (id., quoting Restatement of Torts § 757, Comment b). Evaluation of a claim of trade secret status requires consideration of the degree to which the information sought to be protected truly is "secret", including: " (1) the extent to which the information is known outside of [the] business; (2) the extent to which it is known by employees and others involved in [the] business; (3) the extent of measures taken by [the business] to guard the secrecy of the information; (4) the value of the information to [the business] and [its] competitors; (5) the amount of effort or money expended by [the business] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others'" (id.).

Under New York law, customer "lists are generally not considered confidential unless information contained therein is not known in the trade and discoverable only through extraordinary efforts" (Battenkill Veterinary Equine v. Cangelosi, 1 AD3d 856, 858 [3d Dept 2003]; see H. Meer Dental Supply Co. v. Commisso, 269 AD2D 662 [3d Dept 2000]). Further, it is well established that "mere knowledge of the intricacies of a business is simply not enough," and that "pricing data and market strategies" generally are not recognized as trade secrets (Marietta Corp. v Fairhurst, 301 AD2d 734, 736 [3d Dept 2003]).

Several of the Restatement factors clearly support plaintiff's claim of trade secret status. There is no serious dispute that the customer information sought to be protected by plaintiff is of value to IKON and its competitors. Moreover, it is apparent that this information was developed at substantial expense to IKON through its investment in a professional sales and support staff dedicated to serving current and prospective customers. Moreover, IKON claims, without contradiction, that it has taken reasonable measures to protect its confidential business information, including requiring its employees to the sign the employment agreements at issue on this application.

The parties' principal dispute concerning trade secret status is the extent to which the customer information that IKON seeks to protect is available to Usherwood (and others in the trade) through lawful, alternative means. Plaintiff contends that even if it were possible for a competitor to properly acquire the information at issue, it would necessarily entail an enormous investment of time, effort and money. It is defendants' contention, however, that information regarding IKON's customers is available from a variety of trade sources and, therefore, cannot be considered "secret".

At the outset, the Court is unpersuaded by defendants' reliance on business directories and similar publications as an independent means for duplicating the information at issue here. While the publications relied upon by defendants disclose the identity of tens of thousands of potential customers for office equipment in the Capital Region ranging from sole [*5]proprietorships all the way up to Fortune 100 corporations these sources fail to provide insight into the specific purchasing needs, buying practices and preferences of the customer accounts that IKON seeks to protect, particularly its major accounts. And any effort to recreate the information possessed by IKON from such sources would, as plaintiff contends, likely require a substantial investment of time, effort and resources.

A similar situation is presented with respect to IKON's government customers. As defendants correctly note, information and documentation pertaining to government purchasing decisions generally is a matter of public record. That said, the specific details of a governmental agency's current equipment configuration, its future needs, the preferences of key decision-makers and the like would appear to require a considerable investment of resources to duplicate through legitimate means.

The Court does see some potential merit, however, in defendants' contention that specific information about the IKON customers who use Canon brand equipment the bulk of the customer accounts at issue on this application is available directly from Canon. The affidavit of Louis Usherwood, the chief executive officer of Usherwood, and the supporting documentary evidence submitted by defendants show that Canon possesses substantial information regarding at least some of the purchasers of its equipment, including: the type of equipment installed (including specific models and serial numbers); client and on-site contact information; billing information; and other details regarding service arrangements for the equipment. Defendants' proof also supports the contention that Canon has provided (and continues to provide) such information to Usherwood, one of its authorized retailers, as part of an effort to protect its existing customer base from encroachment by Ricoh, a rival manufacturer. Further, armed with this information, defendants assert that it would be a simple matter to obtain information such as lease expiration dates and pricing information directly from customers, observing that potential customers routinely disclose such information to rival vendors in order to foster price competition.

While plaintiff contends that Canon's provision of this information to Usherwood is itself a misappropriation and misuse of its trade secrets, this conclusory assertion does not find support in the current record. There simply is no competent proof that the information in Canon's possession regarding its customers serviced through IKON, its then authorized retailer, was provided under circumstances that proscribe Canon from now using this information to further its own economic interests (see Restatement of Torts § 757 and Comment d [no liability for the "privileged" disclosure or use of trade secrets]).

There is some force, however, to plaintiff's argument that the Canon information put forward by defendants in opposition to the motion does not include data on the customer accounts assigned to the individual defendants. On that basis, IKON suggests, it may be inferred that only a small portion of the IKON customer information at issue actually is in the possession of Canon and, therefore, potentially available to defendants. Nonetheless, it is plaintiff's burden on this application to demonstrate a strong likelihood of success, and the information that defendants put forward does, at a minimum, raise legitimate questions as to whether Canon is a lawful, independent trade source of the information that plaintiff seeks to protect.

2.Actual Misappropriation

Even if IKON's customer information were shown to be entitled to trade secret status, the [*6]record is devoid of proof of any actual misappropriation of such information by defendants Tubolino, Serianni, Burns, Spencer and Lewis. Accordingly, injunctive relief against these five defendants on the basis of plaintiff's trade secret claim must be premised, if at all, on the notion that these defendants inevitably will disclose or use such information in their new employment with Usherwood. This theory, sounding in "inevitable disclosure", is addressed below.

With respect to Mr. Herkert, plaintiff's moving papers allege that he emailed a list of approximately 150 customers, along with confidential information concerning their accounts, to his personal email account on November 4, 2008, his last day of employment with IKON. Mr. Herkert does not dispute sending this email, but contends that his actions were taken in furtherance of IKON business. He also avers that emailing documents from his IKON laptop to his home computer was his longstanding practice for printing work documents while out of the office.

In its supplemental submissions, plaintiff provides the Court with two other alleged instances of actual misappropriation. First, plaintiff claims that Mr. Kinsey emailed confidential information to himself in October 2008 prior to his resignation from IKON, but after interviewing with Usherwood and indicating that he was "100% serious" about joining the company. Plaintiff also submits emails sent by Ms. Matias in September 2008 to a Canon representative, apparently referring to a strategy for retaining Canon customers following Ricoh's acquisition of IKON.

The Court believes that the timing and circumstances surrounding the transfers of IKON customer data by Messrs. Herkert and Kinsey raise legitimate suspicions on plaintiff's part regarding the misappropriation of its business information.[FN2] Nonetheless, in the absence of more detailed proof demonstrating that defendants' proffered explanations are false or pretextual, which may well be forthcoming following pre-trial discovery, the evidence of actual misappropriation falls short of the clear and strong proof necessary to support the extraordinary interim relief sought by plaintiff.

3.Inevitable Disclosure

To the extent that plaintiff seeks to restrain the individual defendants from soliciting their former clients under a trade secret theory without proof of an actual misappropriation, IKON necessary relies on the doctrine of "inevitable disclosure", which is implicated where an employee's new job duties inevitably will lead to the use of his former employer's trade secrets (see PepsiCo, Inc. v Redmond, 54 F3d 1262, 1268-70 [7th Cir. 1995]). In the typical "inevitable disclosure" case, an employer seeks to restrain a former employee from working for a competitor; here, plaintiff seeks somewhat narrower relief: an order binding the individual defendants to an implied covenant against soliciting their former customers.

Thus, in PepsiCo v Redmond, for example, even in the absence of an express restrictive covenant against post-employment competition and with no proof of an actual misappropriation of trade secrets, a former employee was enjoined from working for a competitor (see id.). However, in reversing a preliminary injunction issued under similar circumstances, the Appellate Division, Third Department cautioned that reliance on inevitable disclosure to imply a restrictive [*7]covenant against competition is "disfavored" absent an actual misappropriation of trade secrets (Marietta, supra , at 737; see Doubleclick Inc. v Henderson, 1997 WL 731413 [1997]).

Given the careful scrutiny with which New York courts evaluate post-employment restrictive covenants that are the product of express agreements, it is apparent that courts may "bind [an] employee to an implied-in-fact restrictive covenant" potentially unlimited in duration and scope only in extraordinary cases (see Marietta, supra , at 737). Given that the employment agreements signed by each of the individual defendants expressly speak to the issue of post-employment restrictions on competition and solicitation, the Court is not persuaded that this is such a case.[FN3]

4.Disclosure of Confidential/Propriety Information

Plaintiff also seeks a preliminary injunction restraining the individual defendants from disclosing the confidential and/or proprietary information that they have obtained from their employment with IKON to Usherwood (or anyone else). In light of the broad confidentiality clauses contained in the employment agreements signed by the individual defendants and the lack of opposition to this branch of the motion, the Court will grant this portion of the requested relief.

B.RESTRICTIVE COVENANT

As an alternative basis for its requested interim relief, plaintiff contends that a preliminary injunction is necessary to prevent the individual defendants from violating the restrictive covenants against competition and customer solicitation set forth in their employment agreements.

It is well established that such covenants "are not favored" under New York law and will only be enforced through injunctive relief in limited circumstances (Morris v Schroder Capital Mgt. Intl., 7 NY3d 616, 620 [2006]). "Undoubtedly judicial disfavor of these covenants is provoked by powerful considerations of public policy which militate against sanctioning the loss of a man's livelihood'" (Reed, Roberts Assoc. v Strauman, 40 NY2d 303, 307 [1976], quoting Purchasing Assoc. v. Weitz, 13 NY2d 267, 271 [1963]).

Based on these considerations, specific performance of restrictive covenants only will be granted to protect against unfair competition (BDO Seidman v Hirshberg, 93 NY2d 382, 391 [1999]; see American Broadcasting Cos. v Wolf, 52 NY2d 394, 404 [1981]). Further, "a restrictive covenant will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer's legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee'" (BDO, supra , at 389, quoting Reed, supra , at 307).

1.Employment Agreements

The Court begins, as it must, with the language of the individual defendants' employment agreements with IKON. This task is complicated by variations in the agreements executed by the eight individual defendants.

Six of the individual defendants (all but Mr. Spencer and Ms. Matias) signed employment [*8]agreements that include identical covenants against competition and solicitation (hereinafter "Standard Form" agreements). Section 8 of the Standard Form agreement provides that for a period of 18 months following termination of employment (except for Mr. Tubolino, whose covenant is limited to one year), the employee shall not, either directly or indirectly: (a) become associated or affiliated with, employed by, or financially interested in any business operation which engages in competition with IKON; (b) make any effort to solicit, encourage, or induce any customer or prospective customer to obtain business or services from a competitor; or (c) cause or attempt to cause any present or prospective IKON customer to reduce its business with the Company.

However, these otherwise broad post-employment restraints are limited by the next section of the Standard Form agreement. Section 9 provides that the foregoing restrictions against competition are intended to be limited to "[a]ny area or account assigned to Employee or under Employee's management, control and/or responsibility during the two (2) year period immediately preceding the termination of employment."

The Standard Form also includes a covenant against the solicitation of IKON employees. Pursuant to Section 10, an IKON employee is prohibited during his or her period of employment, and for two years thereafter, from soliciting, enticing or encouraging IKON employees to leave the company.

As noted above, six of the individual defendants signed Standard Form agreements. However, two such agreements purport to be governed by the law of a sister State, with the agreement signed by Ms. Burns purporting to be governed by Utah law, and the agreement signed by Mr. Tubolino purporting to be governed by Pennsylvania law (though Mr. Tubolino apparently crossed out this provision prior to executing the agreement). At oral argument, however, counsel to all parties stipulated that the law of New York shall govern all defendants in this case and, in any event, that the laws of Utah, Pennsylvania and New York are the same in all respects material to this action.

The employment agreement signed by Ms. Matias provides that for a period of 18 months following her employment at IKON, she shall not sell or solicit the sale of competitive products or services within the same geographic area and/or to the accounts which she was assigned and/or worked in the one year period to the termination of employment. Her agreement does not include a covenant against employee solicitation.

Finally, the agreement signed by Mr. Spencer provides that for a period of two years following his employment, he shall not solicit, divert, take away or attempt to take away IKON's actual or prospective customers. His agreement also includes a two year covenant against soliciting, recruiting or hiring IKON employees.

All of the employees except for Mr. Spencer have restrictive covenants that, in addition to imposing customer-based restrictions, also purport to cover any geographic territory assigned by IKON. Plaintiff, however, asserts that the geographic covenant against competition is not implicated in this case, and expressly disclaims any reliance thereupon, because the assignments of the individual defendants all were customer/account based (or involved the management and supervision of other IKON employees whose assignments were so based). In this connection, plaintiff's moving papers identify the specific number of customer accounts that each individual defendant was assigned. [*9]

Three of the individual defendants, however, specifically dispute this contention: Mr. Herkert claims Warren County was his assigned sales territory; Mr. Kinsey claims he was assigned the Massachusetts Berkshires region; and Mr. Lewis claims to have been assigned Binghamton and surrounding areas.

This factual dispute regarding the specific assignments of the individual defendants clearly is not one that can be resolved as a matter of law on this application. And given that IKON expressly disclaims reliance on any geographic restrictions against post-employment competition and seeks to enforce only customer/account based restrictions, it bears only upon defendants' contention that the restrictive covenants exceed IKON's legitimate interests in enforcement and that the circumstances of this case do not warrant partial enforcement. These issues will be discussed below.

The other dispute concerning application of the covenants to the individual defendants arises from the restrictions against soliciting not only actual IKON customers, but also "prospective" customers. With respect to the Standard Form agreement signed by six of the defendants, the Court is satisfied that, properly construed, Section 9 limits the otherwise broad reach of Section 8 to the more limited universe of prospective customers/accounts that were specifically assigned to them by IKON. The same conclusion follows under the covenant signed by Ms. Matias, since it is limited, by its terms, to her assigned accounts.[FN4]

2.Reasonableness in Duration & Geographic Scope

A restrictive covenant will be subject to specific performance only if it is reasonable in duration and geographic scope(see BDO Seidman, supra , at 389). Defendants acknowledge that the duration of the covenants between one and two years, with the vast majority 18 months in duration fall well within prevailing notions of reasonableness (see e.g. Battenkill Veterinary Equine P.C. v. Cangelosi (1 AD3d 856, 858 [3d Dept 2003]; Iannucci v. The Segal Co. 2006 U.S. Dist. LEXIS 43339 [SDNY]). Likewise, with the term "prospective customer" properly construed as limited to accounts actually assigned to particular individual defendants, there is no serious claim that the geographic scope of the covenants are unreasonable.[FN5]

3.Legitimate Employer Interest

A restrictive covenant may be enforced on the basis of an employer's "legitimate interest" in "the protection against misappropriation of [its] trade secrets or of confidential customer lists, or protection from competition by a former employee whose services are unique or extraordinary" (BDO Seidman, supra , at 389; see Empire Farm Credit v Bailey, 239 AD2d 855 [*10][3d Dept 1997]). An employer's interest in protecting its customer relationships and goodwill also is has been held to be a legitimate interest supprting enforcement of a restrictive covenant (see Scott, Stackrow & Co., C.P.A's, P.C. v. Skavina, 9 AD3d 805, 807 [3d Dept 2004]). Plaintiff alleges that each of these three interests is implicated here.

a.Unique/Extraordinary Services

IKON first contends that the services of the individual defendants were "unique". Enforcement of a restrictive covenant through "injunctive relief may be available where an employee's services are unique or extraordinary and the covenant is reasonable" (Reed, Roberts Associates v. Strauman, 40 NY2d 303, 308 [1976]).

While acknowledging that this case does not involve employees with unique or special talents like those of musicians, professional athletes, actors, acrobats and the like, plaintiff nonetheless argues that the services of the individual defendants must be deemed unique because of their relationships with current IKON customers and their access to confidential customer information (see Ticor Title Ins. Co. v. Cohen, 173 F3d 63, 70 [2d Cir 1999]). However, as plaintiff acknowledged at oral arguments, these employer interests are more appropriately analyzed under the rubric of protecting trade secrets/confidential business information and preventing against the exploitation of customer relationships and goodwill.

b.Trade Secrets and Confidential Customer Information

Plaintiff next contends that enforcement of the restrictive covenants is supported by its legitimate interest in protecting against the misappropriation of its trade secrets and confidential customer information. However, for the reasons explained above, the Court is not persuaded that plaintiff has demonstrated a sufficiently strong likelihood of success in establishing that the information it seeks to protect qualifies as a trade secret. Further, there is no evidence of any actual misappropriation of such information as to five of the individual defendants, and the limited proof offered as to the other three is insufficient to carry the weight of the requested injunctive relief. While, as noted previously, these gaps in proof may well be remedied during the pre-trial discovery process, the Court concludes that plaintiff has failed to demonstrate the clear likelihood of success necessary to warrant the extraordinary interim relief that it seeks.

Having discussed the doctrine of "inevitable disclosure" previously as a surrogate for an express covenant against competition, the Court notes that proof of inevitable disclosure may also form the basis of a legitimate employer interest in enforcing a mutually agreed upon covenant against post-employment competition (see e.g. Estee Lauder Cos. v Batra, 430 F Supp 2d 158 [SDNY 2006]; Lumex, Inc. v. Highsmith, supra ). As the Fourth Department explained long ago in granting a specific performance of a restrictive covenant:

It is also apparent that the value of [the former employee's] services to the defendant company arises from his experience while in the plaintiff's employ, growing out of the practical application of these trade secrets and not otherwise. It is because of his special training and special knowledge that the defendant company must necessarily involve his bringing to its aid such knowledge as he has and which is entirely developed in connection with these secret processes. In this view, if he is permitted to enter this employ, injunctive relief in form against the imparting of such special knowledge is more than likely to prove inefficient. The mere rendition of the service along the lines of his training would almost necessarily impart such knowledge to some degree. [The former employee] cannot be loyal both to his promise to his former employer and to his new [*11]obligations to the defendant company.

(Eastman Kodak Co. v Powers Film Prods., Inc., 189 AD 556, 561-62 [4th Dept 1919]).

Thus, whether framed as "inevitable disclosure" or deeming an employee to be unique or special on account of his or her knowledge of a former employer's trade secrets, New York courts have long recognized that proof of inevitable disclosure may provide a legitimate basis for enforcement of an express post-employment covenant. While there is some authority suggesting that the doctrine may also be "disfavored" in this context (see Colonize.com, Inc. v Perlow, 2003 US Dist LEXIS 20021 [NDNY 2003]), its application to such cases should not be controversial. Unlike the implied restrictive covenant of potentially unlimited duration at issue in Marietta, all that is sought in such cases is enforcement of the express agreement between the parties: an agreement that the employer presumably insisted upon precisely because of concerns regarding the inevitability of disclosure (see e.g. Kodak, 189 AD at 562). And while proof of inevitable disclosure may demonstrate that the employer has a legitimate interest in enforcing the covenant, the employer still must demonstrate that the covenant is consistent with the well established public policy considerations that animate this area of law (see Reed, Roberts, 40 NY2d at 307).

In this case, it is undisputed that the individual defendants left to assume similar positions with a direct competitor of IKON. It also is undisputed that each of the individual defendants possesses information concerning their particular customer accounts. Further, this information would be valuable to a competitor, such as Usherwood. And it is difficult to envision how the individual defendants could service their former customers without utilizing the information learned through their employment with IKON. These factors all support application of the inevitable disclosure doctrine as a basis for enforcement of the express restrictive covenants agreed to by the individual defendants (see Marietta, supra , at 737; EarthWeb, Inc. v Schlack, 71 F Supp 2d 299, 310 [SDNY 1999], remanded, 205 F3d 1322 [2d Cir. 2000], affd 2000 WL 1093320 [2d Cir. 2000]), assuming that plaintiff ultimately succeeds in proving that its customer information qualifies for protection.

c.Customer Relationships & Goodwill

Finally, the Court considers plaintiff's contention that the requested preliminary injunction is supported by IKON's interest in protecting its goodwill and existing customer relationships.

Even where . . . there is no showing that a former employee has obtained a competitive advantage through the misappropriation of confidential customer information or that the employee possessed unique or extraordinary abilities[. T]he employer retains "a legitimate interest in preventing former employees from exploiting . . . the goodwill of a client or customer, which had been created and maintained at the employer's expense, to the employer's competitive detriment" (BDO Seidman v Hirshberg, supra at 392). Thus, under such circumstances, an anticompetitive covenant may prevent the competitive use of client relationships that the employer assisted the employee in developing through the employee's performance of services in the course of employment (see id. at 392; see also Gelder Med. Group v Webber, 41 NY2d 680, 685, 363 NE2d 573, 394 NYS2d 867 [1977]). A covenant will be rejected as overly broad, however, if it seeks to bar the employee from soliciting or providing services to clients with whom the employee never acquired a relationship through his or her employment or if the covenant extends to personal clients recruited through the employee's independent efforts (see BDO Seidman v Hirshberg, supra at 393). [*12]

(Scott, Stackrow & Co., C.P.A's, P.C. v. Skavina, 9 AD3d 805, 806 [3d Dept 2004]).

Applying these principles, the Court is satisfied that plaintiff has demonstrated a clear likelihood of success in establishing a legitimate interest in enforcing the restrictive covenants in order to prevent defendants from exploiting the goodwill and customer relationships developed in the course of their employment with IKON. Plaintiff alleges that their former employees have developed strong relationships with the IKON customers whom they served and supported for many years, and the affidavits submitted by the individual defendants support this contention. Plaintiff also has shown that the goodwill associated with these customer relationships was acquired through the individual defendants' compensated employment with IKON, rather than through any independent efforts or pre-existing relationships. Accordingly, plaintiff's legitimate interest in protecting its goodwill and customer relationships plainly extends to the IKON customers whom the individual defendants were assigned or had management or sales responsibilities prior to the termination of their employment.

In reaching this conclusion, the Court necessarily rejects defendants' contention that IKON's acquisition by Ricoh and the resultant loss of its status as an authorized Canon retailer negates or diminishes this legitimate interest. IKON's Canon customers are now the subject of vigorous competition: with IKON seeking to retain these customers while ultimately transitioning them to Ricoh equipment (or its other offerings), and Canon authorized retailers, such as Usherwood, seeking to attract their business.

It is apparent that the customer relationships and goodwill developed at IKON's expense will play an important role in the customer's decision-making process. IKON's customers of Canon brand equipment who are inclined to remain with a familiar and/or preferred manufacturer may well be apprehensive about turning to a new and untested vendor for their critical service and support needs. Certainly, the assurances and presence of their long-time IKON account representatives, who carry with them the goodwill cultivated over many years at IKON's expense, may well prove decisive in this calculus.

Of course, IKON cannot compel the individual defendants to remain with the company and support its competitive efforts during this challenging period. And there is nothing unfair about vigorous competition between rival copy equipment manufacturers or their authorized retailers. However, IKON does possess a real and legitimate interest in preventing its rivals from exploiting the customer relationships and goodwill it developed through its investment of capital where its former employees agreed to post-employment restraints on such activities.

Further, while the individual defendants express concerns about the impact of the Ricoh acquisition on their ability to earn a livelihood (including commission-based earnings), the Court does not see this as a basis for refusing to enforce the restrictive covenants. The individual defendants voluntarily chose to leave their employment with IKON, some in the face of substantial efforts on the part of IKON to retain to them. Further, defendants' concern about their long-term prospects with IKON rests in large part on speculation and surmise. And while a corporate merger or acquisition often raises such concerns, it is precisely at such critical times when the employer's interest in protecting its goodwill and customer relationships may be at its highest.

Notwithstanding the foregoing, the Court concludes that IKON has failed to demonstrate how its legitimate interest in protecting customer relationships and goodwill extends to defendant [*13]James Spencer, a copier technician who serviced hundreds of accounts while in plaintiff's employ. The record does not support the conclusion that Mr. Spencer's duties as a service technician fostered the type of customer relationships and goodwill that would allow him to compete unfairly against IKON. While plaintiff's counsel represented at oral argument that its service technicians perform a sales type function insofar as they are the "eyes and ears" of their employer while at a customer's site and have frequent opportunities for customer interaction, the Court is not persuaded that such conduct necessarily represents an exploitation of IKON's customer relationships and goodwill. And, in any event, counsel's representations regarding the sales and solicitation function of copier technicians are not part of the evidentiary record compiled on this application.

Finally, the Court finds that the proof offered by plaintiff is insufficient at this juncture to demonstrate a legitimate employer interest with respect to prospective IKON customers. While the Court does not foreclose the possibility that IKON may ultimately be able to demonstrate that it has invested resources, time and effort in developing goodwill and relationships with prospective customers that were assigned to the individual defendants, the present record falls short in that regard.

4.Overbreadth/Partial Enforcement

Defendants argue that even if the Court determines that IKON's goodwill and customer relationships provide a legitimate basis for enforcement of the restrictive covenants, the covenants are overly broad in two principal respects: (1) they purport to extend to "prospective" customers of IKON; and (2) the geographic restrictions on competition go beyond protecting IKON's customer relationships. Defendants further argue that partial enforcement of the covenants is unwarranted.

In BDO Seidman, supra , the Court of Appeals set forth the framework governing partial enforcement of restrictive covenants against competition and customer solicitation:

We conclude that the Appellate Division erred in . . . declining partially to enforce the covenant to the extent necessary to protect [the former employer's] legitimate interest. The Appellate Division rejected partial enforcement or severance of the invalid part of the covenant, because "the court would thereby be required to rewrite the entire covenant" (247 AD2d, at 923). In Karpinski v Ingrasci (28 NY2d, supra , at 51-52), this Court expressly recognized and applied the judicial power to sever and grant partial enforcement for an overbroad employee restrictive covenant. The Court refused to give effect to the portion of the covenant which barred the practice of general dentistry, but enforced it respecting the practice of oral surgery, that being the employer's actual, specialized dental practice.

The issue of whether a court should cure the unreasonable aspect of an overbroad employee restrictive covenant through the means of partial enforcement or severance has been the subject of some debate among courts and commentators (see, Blake, op. cit., at 682-683). A legitimate consideration against the exercise of this power is the fear 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 (id.). The prevailing, modern view rejects a per se rule that invalidates entirely any overbroad employee agreement not to compete. Instead, when, as here, the unenforceable portion is not an essential part [*14]of the agreed exchange, a court should conduct a case specific analysis, focusing on the conduct of the employer in imposing the terms of the agreement (see, Restatement [Second] of Contracts § 184). Under this approach, if the employer demonstrates an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct, but has in good faith sought to protect a legitimate business interest, consistent with reasonable standards of fair dealing, partial enforcement may be justified (see, Blake, op. cit., at 633; Restatement [Second] of Contracts § 184 [1], [2]). We essentially adopted this more flexible position in Karpinski (supra ).

Here, the undisputed facts and circumstances militate in favor of partial enforcement. The covenant was not imposed as a condition of defendant's initial employment, or even his continued employment, but in connection with promotion to a position of responsibility and trust just one step below admittance to the partnership. There is no evidence of coercion or that the Manager's Agreement was part of some general plan to forestall competition. Moreover, no proof was submitted that [the employer] imposed the covenant in bad faith, knowing full well that it was overbroad. . . .

The Appellate Division's fear that partial enforcement will require rewriting the parties' agreement is unfounded. No additional substantive terms are required. The time and geographical limitations on the covenant remain intact. The only change is to narrow the class of BDO clients to which the covenant applies (cf., Karpinski v Ingrasci, supra [narrowing the scope of the prohibitive post-employment activity]). Moreover, to reject partial enforcement based solely on the extent of necessary revision of the contract resembles the now-discredited doctrine that invalidation of an entire restrictive covenant is required unless the invalid portion was so divisible that it could be mechanically severed, as with a "judicial blue pencil" (see, Blake, op. cit., at 681). The Restatement (Second) of Contracts rejected that rigid requirement of strict divisibility before a covenant could be partially enforced (see, Reporter's Note, Restatement [Second] of Contracts § 184, at 32). Thus, we conclude that severance is appropriate, rendering the restrictive covenant partially enforceable.

(BDO Seidman, 93 NY2d at 394-395).

With respect to the claim of overbreadth based on "prospective customers", the Standard Form agreement, signed by six of the individual defendants, limits this otherwise broad language to the more limited universe of accounts and/or geographic regions actually assigned to the former employees by IKON in a specified period preceding the termination of their employment. Likewise, the covenant signed by Ms. Matias is limited by its terms to assigned accounts and/or territories. And as explained above, an employer may well have a legitimate interest in protecting the relationships and goodwill that it has developed with prospective customers, though plaintiff's proof at this early stage of the litigation falls short of establishing its clear entitlement to such protection.

With respect to the issue of geographic restrictions, the Court concludes that even if it were to resolve the conflicting proof in defendants' favor and conclude that the covenants executed by Messrs. Herkert, Kinsey and Lewis extend to the geographic territories to which they allegedly were assigned a scope that plaintiff has expressly disclaimed from the outset of this litigation IKON is nonetheless likely to succeed in obtaining partial enforcement of the [*15]restrictive covenants.

The Court does not see this a case where IKON acted in bad faith by procuring a patently overbroad covenants. In this connection, defendants' reliance on the Third Department's decision in Scott, Stackrow (9 AD3d at 807-808) is misplaced, since that case involved a covenant that was not limited to customer relationships or prescribed geographic regions. Thus, Scott, Stackrow did not clearly foreclose enforcement of the covenants at issue here.

Likewise, there is nothing in the record to suggest that IKON's actions in procuring the restrictive covenants represented anti-competitive misconduct or anything other than a good faith effort to protect its confidential customer information, customer relationships and goodwill, consistent with reasonable standards of fair dealing with the industry. Indeed, plaintiff alleges, without contradiction, that Usherwood required the individual defendants to sign employment agreements containing restrictive covenants as a condition of their new employment.

Moreover, defendants' conclusory assertions aside, there is nothing in the record to support their claim that they were coerced into executing employment agreements containing restrictive covenants. Requiring well compensated individuals entrusted with important customer accounts and their employer's confidential business information to execute restrictive covenants as a condition of employment is not necessarily coercive or overreaching.[FN6] And one of the three defendants specifically claiming a geographic territory, Mr. Kinsey, acknowledges that his covenant was given in consideration for IKON's agreement to reassign him to a different IKON office, and not simply as a condition of continued employment.

Nor is this a case where partial enforcement would require a rewriting of the parties' agreement. Rather, it simply would require the Court to disregard an alternate branch of the covenant of questionable applicability to this case that the employer expressly never has sought to enforce against the individuals defendants.

Under these circumstances, the Court finds that plaintiff is likely to succeed in obtaining partial enforcement of the restrictive covenants.

C.Employee Non-Solicitation

In addition to enforcement of the covenants against customer solicitation, plaintiff seeks to restrain defendants, including Usherwood, from soliciting, recruiting or hiring any of plaintiff's employees to leave employment with IKON and/or take employment with Usherwood.

Seven of the eight individual defendants have non-solicitation clauses in their employment agreements that speak to this issue. The six Standard Form agreements provide that during employment and for two years thereafter, the employee shall not solicit, entice or encourage any IKON employee to leave the company. The agreement signed by Mr. Spencer contains similar language. The agreement signed by Ms. Matias does not, however, include such a covenant.

It is plaintiff's contention that certain of the individual defendants, working in concert with Usherwood, have violated these covenants. Plaintiff submits email communications between Mr. Kinsey and Usherwood, whereby Mr. Kinsey stated: [*16]

I spoke with Lou Tubolino and he is very interested in meeting with you. I think he would be the best candidate to bring on to manage the production side of things as well as the new office. His number is [redacted]. I also spoke to Ken Herkert and he asked that you give him a call as he is also interested. His number is [redacated].

In addition, plaintiff submits an email from Mr. Lewis to Usherwood in which he refers to "hav[ing] spoken with Audrey [Matias] and we would like to visit the Syracuse Office" of Usherwood on a specified date and time.

The individual defendants deny plaintiff's allegations, each contending, in carefully worded affidavits, that they obtained employment with Usherwood by responding to a newspaper advertisement and not through the solicitations of their fellow IKON employees.

While the parties' factual dispute concerning the extent to which the individual defendants may have violated their obligation to refrain from soliciting IKON employees in the past cannot be resolved on this application, the Court is satisfied that plaintiff has met its burden of demonstrating a sufficient likelihood of success so as to enforce prospective restraints against such solicitation. The employment agreements signed by each of the individual defendants (other than Ms. Matias) clearly impose a continuing obligation to refrain from soliciting IKON employees, and defendants have not argued, much less proven, any basis for concluding that such covenants are invalid or otherwise unenforceable.[FN7]

However, the Court has not been presented with a satisfactory legal basis for imposing such restrictions upon Ms. Matias, since her employment agreement failed to include such a covenant. The same conclusion follows with respect to plaintiff's request to restrain Usherwood, a competitor of IKON, from seeking to hire away plaintiff's employees. Of course, to the extent that the IKON employees that Usherwood seeks to hire are subject to restrictive covenants that may affect their ability to carry out their new duties or to other legal restrictions regarding their future employment, Usherwood and these employees must, of course, proceed at their own risk.

IRREPARABLE HARM

In addition to demonstrating a likelihood of success, a party seeking a preliminary injunction must also show, as a threshold requirement, the prospect of irreparable injury if such relief is not granted (see Town of Liberty Volunteer Ambulance Corp. v Catskill Regional Med. Ctr. 30 AD3d 739 [3d Dept 2006]). Irreparable injury in this context means any injury for which a monetary award alone cannot be adequate compensation (see Winkler v Kingston Hous. Auth., 238 AD2d 711 [3d Dept 1997]). Plaintiffs must also demonstrate that such an injury is more than just a mere possibility and, in fact, is likely and imminent absent injunctive relief (Golden v Steam Heat, 216 AD2d 440 [2nd Dept 1995]).

The Court is satisfied that IKON will suffer imminent and irreparable harm absent the requested injunctive relief. Courts routinely find irreparable harm in cases similar to this one [*17]based on the difficulty in calculating an award of monetary damages that would successfully redress the loss of customer goodwill and long-term clients to a competitor (see e.g. Alside Div. of Associated Materials v Leclair, 295 AD2d 873 [3d Dept 2002]). Similarly, an award of money damages is unlikely to make plaintiff whole if its current or former employees assist a competitor in hiring away key personnel. Moreover, while there are factual questions concerning the extent to which improper customer and employee solicitation already has occurred,[FN8] defendants do not disclaim an intention to engage in such solicitation absent injunctive relief.

The Court's finding of irreparable harm is reinforced by the employment agreements signed by the individual defendants, which acknowledge that a violation of the post-employment covenants would irreparably harm IKON and consent to the entry of injunctive relief on that basis. While there is "no authority indicating that such a contract provision entitles the plaintiff to a per se finding of irreparable harm" (Int'l Creative Mgmt. v. Abate, 2007 US Dist LEXIS 22964 [SDNY]), the Second Circuit has recognized that such an acknowledgment "might arguably be viewed as an admission by [the individual defendants] that plaintiff will suffer irreparable harm were he to breach the contract's non-compete provision" (Ticor Title Ins. Co. v. Cohen, 173 F3d 63, 69 [2d Cir 1999]; accord IBM v. Papermaster, 2008 US Dist LEXIS 95516, 29-30 [SDNY]).

BALANCE OF THE EQUITIES

Finally, the Court concludes that equities tip in favor of IKON and the granting of its application for preliminary injunctive relief. Plaintiff provided the individual defendants with the opportunity for well-compensated employment, gave them access to confidential and sensitive business information, and allowed them to build new customer relationships and foster existing relationships through their employment with IKON. The individual defendants left their employment with plaintiff (as they certainly were entitled to do) and went to work for a direct competitor, who seeks to use the customer relationships and goodwill developed at IKON's expense in its effort to attract IKON's customer base.

This possibility, however, was addressed in the employment agreements that each individual defendant was requested to sign. As described, supra , these agreements include post-employment covenants for limited periods that are intended to protect IKON's goodwill and customer relationships, as well as its confidential and proprietary business information. All plaintiff seeks is for defendants to abide by these agreements.

Further, this is not a case where preliminary injunctive relief would preclude defendants from employment. Indeed, the requested preliminary injunction would not restrain the individual defendants from working for Usherwood (or any other employer), but only would prevent them from soliciting, either directly or indirectly, the specific customer accounts that they were responsible for servicing or managing prior to the termination of their employment from IKON. And that restriction would only be in place for a limited, reasonable duration. Moreover, plaintiff asserts, without contradiction, that each of the individual defendants now employed by Usherwood has a multi-year contract that guarantees them a certain level of earnings even if their restrictive covenants prevented them from performing any duties for Usherwood (which they do [*18]not).

That said, the Court is not unmindful of the equities associated with the position of the individual defendants, who appear to have faced some legitimate uncertainties concerning their earning potential and long-term employment prospects with IKON following its acquisition by Ricoh. However, as explained above, defendants are free to work for Usherwood or any other employer, and nothing prevents them from continuing to earn a livelihood selling, supporting and service Canon labeled equipment. Today's ruling simply prevents the individual defendants from soliciting their own base of former IKON customers for a reasonable period, so as to protect IKON's legitimate interest in preventing unfair competition through the exploitation of its customer relationships and goodwill during this transitional period.

UNDERTAKING

"[P]rior to the granting of a preliminary injunction, the plaintiff shall give an undertaking in an amount to be fixed by the court, that the plaintiff, if it is finally determined that he or she was not entitled to an injunction, will pay to the defendant all damages and costs which may be sustained by reason of the injunction" (CPLR 6312). For the purpose of fixing the amount of the undertaking, the Court directs that plaintiff shall, following consultation with defendants, propose to the Court a reasonable undertaking by December 18, 2008. On or before December 23, 2008, defendants shall submit to the Court their consent to plaintiff's proposed undertaking or shall provide the Court with a counter-proposal as to an appropriate undertaking. If the amount of the undertaking cannot be resolved on consent, the Court will, upon review of the parties' submissions, arrange for further proceedings as may be necessary.

CONCLUSION

Accordingly,[FN9] it is

ORDERED that defendants Ken Herkert, Michael Serianni, Jason Kinsey, Eileen M. Burns and David F. Lewis are restrained during the pendency of this action, for a period not to exceed 18 months following their termination of employment with IKON, from soliciting, contacting or engaging in any business with any customer, either directly or indirectly, to which they were assigned, had management or sales responsibility or account specific information during the two year period proceeding their termination of employment with IKON; and it is further

ORDERED that defendant Audrey Matias is restrained during the pendency of this action, for a period not to exceed 18 months following her termination of employment with IKON, from soliciting, contacting or engaging in any business with any customer, either directly or indirectly, to which he was assigned, had management or sales responsibility or account specific information during the one year period proceeding her termination of employment with IKON; and it is further

ORDERED that Louis Tubolino is restrained during the pendency of this action, for a period not to exceed one year following his termination of employment with IKON, from

soliciting, contacting or engaging in any business with any customer, either directly or indirectly, to which he was assigned, had management or sales responsibility or account specific [*19]information during the two year period proceeding his termination of employment with IKON; and it is further

ORDERED that defendants Louis Tubolino, Ken Herkert, Michael Serianni, Jason Kinsey, Eileen M. Burns, James Spencer and David F. Lewis are restrained during the pendency of this action, for a period not to exceed two years following their termination of employment with IKON, from soliciting, recruiting or hiring any of plaintiff's employees to leave employment with IKON and/or to take employment with Usherwood; and it is further

ORDERED that defendants Louis Tubolino, Ken Herkert, Michael Serianni, Jason Kinsey, Eileen M. Burns, James Spencer, Audrey Matias and David F. Lewis shall not disclose any confidential or proprietary IKON documents or materials to Usherwood or any other person; and it is further

ORDERED that further proceedings with respect to the posting of an undertaking pursuant to CPLR 6312 shall be conducted in accordance with the foregoing; and it is further

ORDERED that counsel are directed to appear for a preliminary conference conducted in accordance with the Rules of the Commercial Division on January 5, 2009 at 11 a.m. at the Chambers of the undersigned (150 State Street, Albany, NY).

This constitutes the Decision and Order of the Court. All papers, including this Decision and Order are returned to plaintiffs' counsel. The signing of this Decision and Order shall not constitute entry or filing under CPLR Rule 2220. Counsel is not relieved from the applicable provisions of that Rule respecting filing, entry and Notice of Entry.

Dated: Albany, New York

December 12, 2008

RICHARD M. PLATKIN

A.J.S.C. [*20]

Papers Considered:

Order to Show Cause, dated November 7, 2008;

Summons, dated November 7, 2008;

Verified Complaint, sworn to November 7, 2008, with attached exhibits A-L;

Memorandum of Law in Support, dated November 7, 2008;

Affirmation of James M. Reilly, Esq., dated November 7, 2008, with attached exhibit A;

Affidavit of Thomas Phelps, sworn to November 7, 2008;

Affidavit of Robert Paul Lee, sworn to November 7, 2008, with attached exhibits A-B;

Defendant Herckert's Memorandum of Law in Opposition, undated, with attached exhibit A;

Affidavit of John F. Harwick, Esq., sworn to November 14, 2008;

Affidavit of Ken Herckert, sworn to November 14, 2008;

Defendants' Memorandum of Law in Opposition, dated November 14, 2008;

Affidavit of Louis Usherwood, sworn to November 13, 2008;

Affidavit of Louis Tubolino, sworn to November 14, 2008;

Affidavit of Michael Serianni, sworn to November 14, 2008;

Affidavit of Jason Kinsey, sworn to November 14, 2008;

Affidavit of Eileen M. Burns, sworn to November 14, 2008;

Affidavit of James A. Spencer, sworn to November 14, 2008;

Affidavit of Audrey Matias, sworn to November 14, 2008;

Affidavit of David F. Lewis, sworn to November 14, 2008;

Affidavit of Michael J. Sciotti, Esq, sworn to November 14, 2008;

Plaintiff's Reply Brief, in support of Order to Show Cause, dated November 19, 2008, with attached exhibits A-B;

Defendants' Exhibits, 1-25;

Supplemental Affidavit of Robert Paul Lee, sworn to November 19, 2008, with attached exhibits A-P;

Affidavit of Thomas T. Loder, Esq., sworn to November 21, 2008, with attached exhibits A-E;

Affidavit of Thomas T. Loder, Esq., sworn to November 25, 2008, with attached exhibits A-G;

Supplemental affidavit of Louis Usherwood, sworn to December 2, 2008, with attached exhibit A;

Supplemental affidavit of Louis Tubolino, sworn to December 2, 2008, with attached exhibit A;

Supplemental affidavit of Jason Kinsey, sworn to December 2, 2008;

Supplemental affidavit of Audrey Matias, sworn to December 2, 2008. Footnotes

Footnote 1: The Court struck out the portion of the proposed order prohibiting the individual defendants from soliciting, contacting or engaging in business with prospective customers of plaintiff and the portion that required defendants to return plaintiff's trade secrets or confidential business information.

Footnote 2: As to Ms. Matias, it is unclear to the Court what, if any, confidential IKON information she disclosed to Canon or anyone else.

Footnote 3: Of course, IKON's protection of trade secrets and confidential customer information is a legitimate interest that may warrant enforcement of the express restrictive covenants. This issue is discussed below.

Footnote 4: While the covenant signed by Mr. Spencer does not include this limiting language, the nature of his duties servicing the equipment of current IKON customers would not appear to implicate prospective customers. In any event, for the reasons that follow, this issue is academic, at least at this stage of the litigation, with respect to Mr. Spencer.

Footnote 5: As noted, certain of the individual defendants do claim to have been assigned specific geographic territories and contend that enforcement of the covenants on a geographic basis is not supported by a legitimate employer interest. However, plaintiff does not seek to the enforce the covenants on that basis.

Footnote 6: The only possible exception to this is Mr. Spencer, a copier technician, but the Court already has determined that a preliminary injunction will not issue against him with respect to the covenant against competition.

Footnote 7: The Court notes that these covenants against employee solicitation do not restrict the employment opportunities available to the individual defendants (or to current IKON employees), but simply limit who may solicit or encourage such opportunities. As such, they do not implicate the policy concerns raised by covenants against competition.

Footnote 8: The Court notes that there is evidence that at least some of the individual defendants may have engaged in improper customer solicitation prior to the entry of the temporary restraining order.

Footnote 9: The Court has considered the parties' remaining arguments and contentions, but finds them to be without merit or unnecessary to the disposition of this application.