Avoiding 'Obnoxious' Choices Of Law And Restrictive Covenants In Employment Agreements

A New York state appellate court recently held that a Florida choice-of-law provision in an employment agreement between a Florida-based employer and a New York-based employee was unenforceable because Florida law governing post-employment restrictive covenants was "truly obnoxious" to New York public policy. Applying New York law, the court also refused to modify and partially enforce a restrictive covenant in the employment agreement because the employer was on notice that the covenant was too broad when it imposed the agreement on the employee.

The decision, Brown & Brown, Inc. v. Johnson,1 shows that multi-state employers cannot count on applying their home-state law to restrictive covenants with employees in other states and are at risk of losing all protection from a covenant if they over-reach in setting its scope.

Background

A Florida insurance broker hired an actuary...