In a recent decision in the matter Alliance Bernstein, L.P. v. William Clements, the Supreme Court of the State of New York, New York County (Justice Louis B. York), enjoined a former employee of AllianceBernstein, L.P. (“AllianceBernstein”) from working for a competitor for 60 days, pursuant to a provision in an agreement requiring the individual to provide 60 days notice of his intention to resign. Although the original 60 days extending from the date of his resignation had already elapsed, the Court in effect granted a new 60 day period of non-competition, because the individual had started working for the competitor immediately upon his resignation from AllianceBernstein.

The facts as set forth in the decision were that the defendant individual, a California resident, had no experience in the securities industry when first hired, but AllianceBernstein gave him extensive training and paid for his registration with various securities exchanges. He then became a successful financial advisor. In 2009, AllianceBernstein and the defendant entered into an extensive incentive plan, in which defendant promised (a) to give 60 days notice of his resignation, (b) not to solicit clients or employees of AllianceBernstein during those 60 days, and (c) to keep permanently the confidentiality of AllianceBernstein’s trade secrets and confidential information.

Later, defendant resigned and immediately began working for a competing company, Barclays Global Wealth Management (“Barclays”). On that same day, Barclays sent an email to AllianceBernstein clients informing them of defendant’s change of employment.

Rejecting defendant’s argument that is was Barclays and not him who sent the email, the Court asked “Where did Barclays get these [client] lists, if not from defendant?” and issued a preliminary injunction restraining defendant during a new 60 day period from (a) engaging in any activities or being employed in competition with AllianceBernstein, (b) soliciting clients or employees of AllianceBernstein, or (c) using, copying or sharing the client lists of AllianceBernstein. The injunction was issued even though defendant had been employed at Barclays for more than 60 days. The Court also rejected defendant’s arguments that the matter should be heard in a California court and should be subject to arbitration. The incentive plan included provisions requiring the matter to be heard in a New York court, subject to New York law.

This decision is noteworthy as an example of a court enforcing a provision requiring employees to provide notice of their intention to resign and, further, doing so by enforcing the full notice period despite the expiration of the original notice period which was ignored.

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