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MOTION TO VACATE THE NOTE OF ISSUE AND COMPEL DISCOVERY PROPERLY DENIED; MISAPPROPRIATION OF TRADE SECRETS AND BREACH OF A NON-COMPETITION CLAUSE CAUSES OF ACTION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined: (1) plaintiff’s motion to vacate the note of issue and compel additional discovery was properly denied because the criteria of 22 NYCRR 202.21 were not met; (2) the misappropriation of trade secrets cause of action re: customer lists was properly dismissed; (3) the misappropriation of trade secrets cause of action re: development of a laser should not have been dismissed; and (4), the breach of the non-competition clause cause of action should not have been dismissed:

The elements of a cause of action to recover damages for misappropriation of trade secrets are: (1) possession of a trade secret; and (2) use of that trade secret in breach of an agreement, confidential relationship or duty, or as a result of discovery by improper means (see Tri-Star Light. Corp. v Goldstein, 151 AD3d 1102, 1106). A trade secret includes any compilation of information which provides the company with an opportunity to obtain an advantage over competitors who do not know or use it … . …

… [T]he plaintiff raised triable issues of fact as to whether the defendant used its trade secrets in the manufacture of particular lasers … . …

A restrictive covenant will not be enforced if it is unreasonable in time, space, or scope  … . Thus, “a restrictive covenant will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee” … . … [T]he plaintiff raised a triable issue of fact regarding whether the noncompetition clause should be partially enforced. A restrictive covenant may be partially enforced to the extent necessary to protect a company’s legitimate interests … . In particular, “restrictive covenants will be enforceable to the extent necessary to prevent the disclosure or use of trade secrets or confidential customer information” … .  Photonics Indus. Intl., Inc. v Xiaojie Zhao, 2020 NY Slip Op 04330, Second Dept 7-29-20

 

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