
By Jeffrey B. Shapiro, Esq.
Are you protecting your business’s most valuable information? Losing control of it could give your competitors exactly what they need to take your customers and profits. In New York, trade secrets are the lifeblood of many businesses, whether you run a manufacturing company, a professional services firm, or a growing start-up. They can include client lists, pricing models, proprietary processes, source code, or strategic plans. The risk often becomes real when a trusted employee leaves. Imagine a sales director who copies your client database before resigning. With access to pricing structures, purchasing histories, and decision-maker contacts, they could quickly undermine years of relationship-building. This is why drafting enforceable agreements to protect this information can mean the difference between staying ahead of your competitors and watching them profit from your hard work.
The case of AdMarketplace Inc. v. Salzman1 shows how an employer’s ability to protect vital business information often depends on how effectively its restrictive agreements are drafted. AdMarketplace Inc., an online advertising company, sued two former employees and their new employer, a direct competitor, alleging they had taken confidential client data, solicited employees and customers, and attempted to access its password-protected database after leaving. Both employees had signed non-disclosure and non-solicitation agreements, and one reaffirmed those obligations in a separation agreement. When the defendants moved to dismiss, the court drew a sharp line between overbroad non-compete provisions, which it refused to enforce, and narrowly tailored protections for confidential information and client relationships, which it upheld.
Restrictive agreements can be powerful when drafted correctly. They define what counts as “Confidential Information,” limit how it can be used, and outline the consequences for violating those terms. In AdMarketplace Inc., the employer’s NDA barred disclosure of client data and solicitation of clients or employees after departure. The court struck down an overly broad non-compete clause but enforced the confidentiality and non-solicitation provisions because they were focused on protecting legitimate business interests, trade secrets and customer goodwill. The first takeaway for business owners is that while New York courts often reject non-competes2, they will enforce agreements that specifically protect confidential information.








