The Commercial Division Reaffirms that Permissive Forum Selection Clauses Do Not Preclude Litigating in a Different Court
Attorneys drafting forum selection clauses were reminded of the distinction between permissive and mandatory forum language in Justice Andrea Masley’s recent decision, Duncan-Watt et al. v. Rockefeller et al., No. 655538/2016, 2018 BL 138448 (Sup. Ct., N.Y. Cty. Apr. 13, 2018). In Duncan-Watt, the Commercial Division ruled on Defendants’ motion to dismiss by holding that the dispute resolution clause in the parties’ licensing agreement failed to select Australian courts as the exclusive forum in which to litigate any disputes. As a result, the Court concluded that the contractual language at issue only reflected the parties’ consent to jurisdiction in Australia—not that the dispute had to be litigated there.
Commercial Division Analyzes Choice-of-Law on an Element-by-Element Basis in Upholding Claim for Aiding and Abetting Breach of Fiduciary Duty
In Wantickets RDM, LLC v. Eventbrite, Inc., No. 654277/2016, 2017 BL 261099 (Sup. Ct. Jul. 21, 2017), New York Commercial Division Justice Shirley Werner Kornreich denied defendant Eventbrite’s motion to dismiss plaintiff Wantickets’ claims for aiding and abetting breach of fiduciary duty, among other claims. In doing so, she applied Delaware law to assess plaintiff’s allegations of an underlying breach of fiduciary duty and New York law to the remaining elements.
Unless the U.S. Supreme Court Rules Otherwise, Waivers of Collective Actions Are Not Enforceable in New York
On July 18, 2017, the First Department partially reversed the Commercial Division’s decision in Gold v. New York Life Insurance Company, No. 653923/12, 2017 BL 247192 (App. Div. 1st Dep’t July 18, 2017), a case that presented the issue of whether employees can be compelled to waive collective actions against their employers pursuant to an arbitration clause. In 2015, Justice O. Peter Sherwood of the New York Commercial Division had granted a motion to compel a former insurance agent to arbitrate his wage dispute with New York Life Insurance Co. (“N.Y. Life”). In a decision by Justice Karla Moskowitz (who was a member of the Commercial Division before being appointed to the Appellate Division), the First Department answered an open issue in New York, holding that employers cannot be required to arbitrate such disputes as it “would run afoul of the National Labor Relations Act.”
When employees resign, the scope of the trade secret doctrine often defines the relationship between former employers and their employees. Trade secret misappropriation claims frequently overlap with other claims arising out of the employment relationship, such as for breach of contract, unfair competition and breach of confidentiality obligations, and also with other doctrines that protect intangible information, such as trademark and copyright law. In S.A.S.C.O. Trading, Inc. v. Pamnani, Case No. 655441/2016, 2016 BL 375946 (N.Y. Sup. Ct. Nov. 1, 2016), Justice O. Peter Sherwood of the Commercial Division analyzed whether a clothing company’s customer lists, manufacturer and supplier lists, and clothing designs were subject to trade secret protection and in the case of the clothing designs, also copyright or trademark protection.
A recent decision from the New York Commercial Division decided whether arbitration could be avoided in an investment firm-employee dispute. In CF Notes, LLC v. Weinstein, No. 652206/2015, 2016 BL 352970 (N.Y. Sup. Ct. Oct. 13, 2016), Justice Saliann Scarpulla, of the Commercial Division, compelled a nonsignatory to arbitrate pursuant to a FINRA arbitration agreement. The decision relates to how financial securities firms structure bonuses to employees and to how nonsignatories may be compelled to arbitrate pursuant to arbitration agreements signed by their affiliates.