Reed, Roberts Associates, Inc. v. Strauman

In Reed, Roberts Associates, Inc. v. Strauman (40 NY2d at 307 [1976]), the court stated that a restrictive covenant would only be specifically enforced in such context if it was necessary to protect the employer's legitimate interests. The Reed court set forth a two-part test for determining whether a restrictive covenant serves the employer's legitimate interest (see Reed, 40 NY2d at 308; Restatement [Second] of Contracts 188). Under the legitimate interest inquiry, the Reed court held that restrictive covenants will be enforceable only (1) "to the extent necessary to prevent the disclosure or use of trade secrets or confidential information," or (2) "where an employee's services are unique or extraordinary" (Reed, 40 NY2d at 308). The Reed court determined that the vice-president's alleged use of the consultancy's "customer-list" was not actionable because the names and contact information of current and potential customers were easily ascertainable from public sources (Reed, 40 NY2d at 308).