By order to show cause dated June 11, 2007, plaintiffs Paris Consulting Group International, LLC and Xonitek Systems Corporation (hereinafter collectively "plaintiffs")

moved for a preliminary injunction restraining and enjoining defendant Dana S. Ellis from violating the terms and conditions of a restrictive covenant. As part of said order to show cause, the court granted a temporary restraining order by which defendant, pending this hearing, was temporarily restrained from engaging in any direct or indirect or verbal solicitation of plaintiffs' clients, as well as preventing defendant from disclosing plaintiffs' trade secrets and confidential information, if any.

A hearing was held on September 6, 2007 at which time the court heard the testimony and proof presented by the parties.

BACKGROUND

In 1995, plaintiffs hired defendant as director of business development. Defendant's responsibilities included working as a salesman and service technician and engaging in substantial marketing and servicing of Exact Software. Exact Software is a separate company which manufacturers and distributes its product to companies such as plaintiffs' which then in turn sell and modify the program to cater to the specific internal needs of an end user.

Defendant signed a "Covenant Not To Compete And Confidentially Agreement' on August 3, 2001 (Plaintiff's Ex 4). On May 24, 2005, defendant executed an updated "Covenant Not to Compete and Confidentiality Agreement" (hereinafter "2005 Agreement") which stated, in part, as follows:

& lbrac;e & rbrac;mployee covenants and agrees that for a period of two (2) years after termination of his/her employment with Employer, he/she will not work for or with Exact Software, Incorporated or any entities related to Exact Software, Incorporated or any individual or business entity which competes with the business of Employer or XSC and/or which acts as a consultant, reseller, or agent for Exact Software, Incorporated or any entities related to Exact Software, Incorporated.

(Plaintiff's Ex 3, ¶ 2).

On or about March 20, 2006, defendant's employment with plaintiffs was terminated.

As part of his severance package, defendant signed a "Separation Agreement and Release" dated March 23, 2006 which modified to some extent the restrictive covenant contained in the 2005 Agreement. More specifically, said modification altered the 2005 Agreement, as relevant here, as follows:

& lbrac;g & rbrac;ranting the Employee permission to work for an Exact Software reseller in those states south of the Mason Dixon Line (which states, for purposes of this Agreement, shall not include Ohio or West Virginia) but only to the extent such employment will not result in the solicitation [*2]of business from or the sale or delivery of software product to any individual or entity located or residing within a state to which the geographic scope of the prohibition applies.

(Plaintiff's Ex 2, ¶ 10).

In July 2006, defendant was hired to perform consulting services for Mayer, Shanzer & Mayer, P.C., located in Pennsylvania, and an authorized reseller of Exact Software. Upon learning of defendant's new employment, plaintiffs filed this order to show cause and temporary restraining order seeking a preliminary injunction prohibiting defendant from continuing in his activities as an employee of Mayer, Shanzer & Mayer, P.C.

Plaintiffs presented the testimony of Joseph Paris, president, who alleged that defendant had improperly solicited one of plaintiffs' clients, a company called Dielectric Laboratories, Inc. (hereinafter "Dielectric"). It was apparent from Mr. Paris' testimony that Dielectric is the only client of plaintiffs that is alleged to have been solicited by defendant. Contrary to plaintiffs' allegations, defendant testified that he had not solicited or contacted Dielectric or any other of plaintiffs' previous or current clients. Although defendant did not dispute that Dielectric had transferred its business from plaintiffs to Mayer, Shanzer & Mayer, P.C., defendant denied that he had any involvement - directly or indirectly - with Dielectric's move.

In this court's view, conspicuously absent from the hearing was any testimony from a Dielectric employee or from anyone with first hand knowledge of why Dielectric switched from plaintiffs to Mayer, Shanzer & Mayer, P.C. as their software consultant. As such, the court is left with a credibility assessment of the parties testimony as to why Dielectric made the move which are, not surprisingly, contrary to one another.

A preliminary injunction is proper if the party seeking the relief has demonstrated by clear and convincing evidence a likelihood of ultimate success on the merits, irreparable injury absent the granting of the injunction, and a balancing of equities in favor of the injunction (Rick J. Jarvis Associates, Inc. v Stotler, 216 AD2d 649, 650 & lbrac;3rd Dept 1995 & rbrac;). As such, the primary focus here is on plaintiffs' likelihood of success in enforcing the restrictive covenant at issue. Generally, restrictive covenants are enforceable if the following three conditions are satisfied: "(1) & lbrac;the restraint & rbrac; is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public & lbrac;citations omitted; emphases in original & rbrac; (BDO Seidman v Hirshberg, 93 NY2d 382, 388-389 & lbrac;1999 & rbrac;). Moreover, a restrictive covenant will be upheld as reasonable if it seeks only to achieve the following: (1) to prevent the employee from soliciting or disclosing trade secrets; (2) preventing the release of confidential information regarding the employer's customers; or (3) in cases where the employee's services are deemed special or unique (Purchasing Assocs. v Weitz, 13 NY2d 267 & lbrac;1963 & rbrac;). All of the foregoing factors, however, must be balanced by [*3]" & lbrac;p & rbrac;owerful considerations of public policy which militate against sanctioning the loss of a man's livelihood..." (Id. at 272). As such, " & lbrac;r & rbrac;estrictive covenants which tend to prevent an employee from pursuing a similar vocation after termination of employment are disfavored by the law" (Columbia Ribbon & Carbon Manufacturing Co., Inc. v A-1-A Corporations, et al, 42 NY2d 496 & lbrac;1977 & rbrac;).

Defendant has conceded that the two year limitation contained in this covenant is reasonable. For purposes of analysis, the court will accept the principle that this covenant was reasonable as to the geographic area and turn to the remaining issues.

As mentioned above, the court has only the testimony of Joseph Paris on behalf of plaintiffs to balance against that of defendant's test. The court found defendant to be most credible in this regard. The testimony established that any of plaintiffs' customer's names could be accessed through Exact Software Inc.'s corporate headquarters and were known by other resellers and even permissibly exchanged at so-called user group meetings. In fact, with respect to Dielectric, the proof did not establish that defendant learned of Dielectric or that Dielectric learned of defendant through any type of confidential information or customer lists revealed by defendant that were not otherwise obtainable. The court finds that plaintiffs have failed to establish that defendant had or used any confidential information or customer lists that were not otherwise discoverable in the general course of business. The court also finds that there were no trade secrets at issue in this case. Nor was any evidence presented that defendant's services were so unique or special so as to warrant protection. Rather, the court finds that defendant was, and is, simply employed as a software installer who helps modify software packages for end users as do many other people in this field.

It is so ordered.

Dated:November 2, 2007

Binghamton, New York

s/ Ferris D. Lebous

Ferris D. Lebous, JSC