LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT).

The Fourth Department determined the liquidated damages provision in the non-compete covenant was enforceable and the defendant should have been granted summary judgment on its claim for attorney’s fees pursuant to the employment contract. Plaintiffs had argued the liquidated damages encompassed the defendant’s attorneys’ fees:

… [W]e conclude that the court properly determined that defendant met its initial burden of establishing that the liquidated damages clauses are enforceable because they represent a ” reasonable measure of the anticipated probable harm’ ” … , and plaintiffs failed to raise an issue of fact. We note that plaintiffs do not dispute that the potential damages flowing from a breach of the restrictive covenant were not readily ascertainable at the time the parties entered into the employment agreements … . Indeed, the fact that these types of damages are difficult to measure provides the foundation for a liquidated damages clause … .

… [T]he attorney fee clause of the employment agreement is not duplicative of the liquidated damages clause. One of the express purposes of the liquidated damages clause is “avoiding the costs, expenses, and uncertainties of litigation over the amount of actual damages that will be suffered by the Employer in the event of breach” … . Here, defendant seeks attorney’s fees and costs incurred in enforcing the restrictive covenant and the liquidated damages clause, which is distinct from any attorney’s fees and costs that would be incurred in litigation over the amount of actual damages … . Mathew v Slocum-Dickson Med. Group, PLLC, 2018 NY Slip Op 03059, Fourth Dept 4-27-18

​EMPLOYMENT LAW (NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/CONTRACT LAW (EMPLOYMENT LAW, NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/NON-COMPETE COVENANT (LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/ATTORNEY’S FEES (EMPLOYMENT LAW , NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/LIQUIDATED DAMAGES (NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))