BDO SEIDMAN v. HIRSHBERG Case Brief
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Case Brief Summary & Legal Analysis
tl;dr: An accounting firm sued a former employee to enforce a reimbursement clause for serving firm clients. The court found the clause overbroad but, instead of voiding it, partially enforced it to protect the firm’s legitimate interests, remanding on the issue of liquidated damages.
Legal Significance: Establishes that New York courts will partially enforce overbroad employee restrictive covenants if the employer acted in good faith. It narrowly defines an employer’s legitimate protectable interest as client relationships cultivated through the employer’s resources, not the entire client base or the employee’s personal clients.
BDO SEIDMAN v. HIRSHBERG Law School Study Guide
Use this case brief structure for your own legal analysis. Focus on the IRAC methodology to excel in law school exams and cold calls.
Case Facts & Court Holding
Key Facts & Case Background
BDO Seidman (BDO), a national accounting firm, required defendant Jeffrey Hirshberg to sign a “Manager’s Agreement” as a condition of promotion. The agreement contained a clause requiring that if Hirshberg left the firm, he must compensate BDO for any of its Buffalo office’s clients he served within 18 months of his departure. The specified compensation was 1.5 times the fees BDO had charged that client in the last fiscal year. After resigning, Hirshberg began serving approximately 100 of BDO’s former clients. BDO sued to enforce the clause. Hirshberg contended that the covenant was overbroad, as many of these clients were personal clients he had brought to the firm or clients with whom he had no significant contact while employed at BDO. The trial court and Appellate Division found the clause to be an unenforceable anti-competitive agreement and granted summary judgment to Hirshberg. BDO appealed to the Court of Appeals of New York.
Court Holding & Legal Precedent
Issue: Can a court partially enforce an overbroad restrictive covenant in an employment agreement that requires a former employee to compensate the employer for servicing any of the employer’s clients, including those with whom the employee had no prior contact or who were the employee’s personal clients?
Yes. The restrictive covenant is overbroad but can be partially enforced. The Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse c
IRAC Legal Analysis
About IRAC analysis
IRAC (Issue, Rule, Analysis, Conclusion) is the structure professors expect in exam answers. Each LSD.Law brief states the issue, the governing rule with citations, the court's application of that rule, and the conclusion - the same reasoning pattern you will use on exams and in practice.
Legal Issue
Can a court partially enforce an overbroad restrictive covenant in an employment agreement that requires a former employee to compensate the employer for servicing any of the employer’s clients, including those with whom the employee had no prior contact or who were the employee’s personal clients?
Conclusion
This case solidifies New York's adoption of a flexible, good-faith standard for Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris ni
Legal Rule
A restrictive covenant in an employment agreement is enforceable only to the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim
Legal Analysis
The court applied the three-pronged common-law test for the reasonableness of restrictive Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolo
Flash-to-Full Case Opinions
Flash Summary
- A restrictive covenant is overbroad if it covers clients the employee