I was then delighted that the author of the BDO Seidman decision, former Associate Judge of the Court of Appeals, Howard A. Levine, agreed to share with me his recollections about the case.
BDO Seidman adopted a practical test for distinguishing between (1) clients whom employers may protect from solicitation via restrictive covenants and (2) clients who are fair game for solicitation by departing employees. The test focuses on whether the employer or the employee invested the time, money, and effort to establish the goodwill underlying the client relationship. If the employer established the goodwill with the client, the employer may prohibit an ex-employee from soliciting that client.
While some decisions before BDO Seidman were more critical of non-solicit provisions, those decisions tended to employ hard-to-apply “rule of reason” analysis. BDO Seidman’s practical focus on client goodwill led it to become the go-to case for attorneys representing employees in restrictive covenant disputes.
Distinguished Service to the New York State
Judge Levine served as a New York judge for more than 30 years, serving as a Family Court Judge from 1971 to 1980, a Justice on the State Supreme Court in 1981, an Associate Justice of the Supreme Court, Appellate Division for the Third Department from 1982 to 1992, and finally an Associate Judge of the Court of Appeals from 1993 to 2002, when he reached the Court’s mandatory retirement age of 70.
Since 2002, Judge Levine has worked in private practice at the Albany law firm Whiteman Osterman & Hanna LLP. At 89 years young, he still maintains an active practice serving as a mediator or arbitrator in complex civil disputes. He also often serves as an expert witness opining upon New York law in international disputes in which there is a New York choice of law provision. He reports that it is gratifying to see the respect that the international business community has for New York law, as evidenced by the frequent selection of New York law in major international business transactions.
Recollections About Authoring the BDO Seidman Decision
Judge Levine authored the BDO Seidman decision for a unanimous Court of Appeals. Recalling the BDO Seidman decision in our telephone conversation, Judge Levine first described his general approach toward opinion writing: “I didn’t write to sound brilliant, I didn’t write to sound clever, I didn’t write to be funny. I just wrote to be clear.”
Judge Levine recalled being concerned by the BDO Seidman decision because it was the only time during his tenure on the Court that he changed his holding while preparing to write the decision for the Court:
The Court puts the name of each case on a note card and judges take turns drawing the cards to determine who will draft the opinion in a case. I drew the card for the BDO Seidman case and I then prepared and circulated a short bench memo indicating that I would affirm the lower court’s decision. The other judges agreed with that decision.
However, after I researched the law for a while I started to realize that the topic was more complicated than I originally thought. The law wasn’t as clear as it could have been and I started to focus on the concept of client good will for determining the scope of a non-solicit agreement.
As a result, I had to go back to the other judges and explain my new approach which would partially affirm and partially modify the decision of the lower court, instead of entirely affirming as I had recommended in my initial memo. I was concerned that my colleagues might not support my change of direction. But the other judges agreed with my new approach and I was able to maintain a unanimous decision.
Judge Levine also recalled the role that an important law review article played in his decision. The BDO Seidman decision cites the 1960 Harvard Law Review article “Employee Agreements Not to Compete” by University of Minnesota law professor Harlan M. Blake. “The Blake article was very helpful. It provided a great amount of history about restrictive covenants and the purposes that they served. So I wanted to cite to it to substantiate our focus on protecting goodwill.”
A Pragmatic Approach
Finally, when asked if he viewed his decision as pro-employer or pro-employee, Judge Levine responded: “I really didn’t view cases that way. I tried to be guided by prior law and to write something that was clear and useful to the parties to help resolve disputes.” Well, the BDO Seidman decision certainly accomplished that goal.
Thank you, Judge Levine, for your years of public service to New York and thank you for sharing your time and your recollections about the BDO Seidman case with me!