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Wednesday, January 17, 2007

Certified question answered. In Morris v. Schroder Capital Management International, the plaintiff has sued his former employemtn for breach of contract for failure to pay him certain deferred compensation benefits. The District Court dismissed teh complaint for failure to state a claim, holding the Morris had forfeited his rights to certain benefits under various deferred compensation plan, including a covenant not to compete. It further held that because Morris had failed to state a claim of constructive discharge, the covenant not to compete was valid pursuant to New York's employee choice doctrine, which permits enforcement of restrictive covenants whithout regard to the covenant's reasonableness. Morris appealed.

The Second Circuit certified to the New York State Court of Appeals the question of whether the constructive discharge is the approrpriate legal standard to apply when determining whether an employee voluntarily or involuntarily left his employment for purposes of the employee choice doctrine. The New York State Court of Appeals answered the question in the affirmative.

According, the Second Circuit affirmed the decision of the District Court. The decision can be found here.

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