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May 2011 Archives

May 6, 2011

Court of Appeals Answers Certified Questions in Improper Solicitation Case

Our September 13, 2010 blog entry described Bessemer Trust Co., N.A. v. Branin, 08-2462-cv(L), 08-2677-cv(XAP) (2d Cir. 2010), in which the Second Circuit examined New York's Mohawk doctrine. That doctrine requires a seller to refrain from soliciting former customers following the sale of the "good will" of the seller's business. In Bessemer, the Second Circuit noted that the duty of the seller not to solicit customers does not include "an obligation not to accept such of his former customers as may choose to follow him to his new employment." So long as the client's decision to follow the seller did not come about through "improper solicitation", the law is not violated. The Second Circuit then determined that New York law was not clear on whether the defendant's actions in Bessemer constituted "improper solicitation" and certified questions to the New York Court of Appeals regarding the degree of participation necessary to constitute "improper solicitation".

The New York Court of Appeals accepted the certified questions and, after hearing argument and considering the briefs submitted by the parties, held that a seller of "good will" may answer the factual inquiries of a former client, so long as the responses do not go beyond the scope of the specific information sought. See Bessemer Trust Co., N.A. v. Branin, 2011 WL 1583932 (N.Y.), April 28, 2011. A seller's right to answer all the questions posed by the former client is not unlimited, however. According to the Court of Appeals, a seller of "good will" engages in improper solicitation when, even if prompted, "he disparages the purchaser of his business" by, for example, explaining why he believes his products or services are superior.

Finally, in response to the specific questions certified by the Second Circuit, the New York Court of Appeals stated that a seller of good will is free to convey certain information about his former client to his new employer. In the context of the financial services industry (the industry involved in Bessemer) appropriate topics include items such as a former client's investment preferences, financial goals, and tolerance of risk; it may not include information that is proprietary to a purchaser of good will, however. In addition, a seller may aide his new employer in preparing for a "sales pitch" meeting requested by a former client and the seller may be present when the meeting takes place. The seller's role in the meeting, however, must be limited to responses to factual matters in order to comply with New York's Mohawk doctrine.

Sean C. McPhee, Esq.

May 18, 2011

ATTENTION BUFFALO LAW FIRMS: "A Few Good Firms" Needed for Inner-City Law Intern Program

"May our children and our children's children to a thousand generations, continue to enjoy the benefits conferred upon us by a united country, and have cause yet to rejoice under those glorious institutions bequeathed us by Washington and his compeers."

--Abraham Lincoln, October 4, 1862 Speech at Frederick, Maryland

Buffalo, New York is known for its people: good-hearted folks always ready to lend a hand. This is especially true of its legal community, which donates countless hours to community organizations and pro bono legal services.

Sadly, Buffalo is also known for being the third poorest city in the United States. Unemployment for adult minority males is more than 50% and for caucasian males is higher than 40%. There exists a lack of job opportunity for bright and capable young adults. Many do not ever have the opportunity to observe what it is like to work in an office setting.

The Honorable Paula L. Feroleto, Eighth Judicial District Administrative Judge, and her husband John, a Buffalo trial attorney, have challenged Buffalo's law firms to do just a little bit more to open the door of opportunity for a few inner-city students. In 2009, they started the "Law Intern Program of Buffalo" in order to try to place teenage high school students in paid internships in Buffalo law firms and with legal service providers.

The internships pay the minimum wage and run for about six weeks (typically for 2 to 3 days a week). The impact upon these students, however, is profound. This program is a great way to make a difference for the betterment of Buffalo and the enrichment of our profession.

Several firms have stepped up to be counted among those willing to make this commitment. Many more students, however, still need firms to be placed at for this summer. Please help us open a door of opportunity. Will your firm answer the call?

Please email Heath Szymczak or contact John Feroleto directly at 716-854-0700.


"Inner-City Law Intern Program Created"

"Law Intern Program Works"

About May 2011

This page contains all entries posted to Business Torts and Employment Litigation Blog in May 2011. They are listed from oldest to newest.

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