SilverLining Interiors, Inc. v. Arencibia et al.
Attorneys and Parties
Brief Summary
Enforcement of a noncompetition covenant against a former employee in the construction/interiors industry following termination without cause.
The Supreme Court granted a preliminary injunction restraining defendants from competing with SilverLining under the noncompete provision.
The preliminary injunction enforcing the noncompetition provision.
The noncompete had already been adjudicated overly broad and unenforceable in prior litigation between the parties (a ruling affirmed by the Appellate Division), leaving no likelihood of success on the merits or legal basis for injunctive relief.
Background
SilverLining terminated Joel Arencibia without cause. In a prior action, Arencibia sought a declaration that the employment agreement’s noncompetition clause was unenforceable. On January 22, 2025, the Supreme Court held the clause, which barred Arencibia from transacting business with any construction firm in the New York metropolitan area for three years post-termination, was overly broad and not saved by six months of severance; the lack of compensation for the remaining two and a half years further contributed to its overbreadth. The Appellate Division affirmed, holding there was no basis to enforce an otherwise unenforceable noncompete. Despite that, SilverLining later obtained a preliminary injunction from the Supreme Court enjoining competition under the same noncompete.
Lower Court Decision
Supreme Court, New York County (Borrok, J.) entered orders on or about August 8 and 12, 2025 granting and entering a preliminary injunction enjoining defendants from competing with SilverLining under the noncompetition provision.
Appellate Division Reversal
The Appellate Division unanimously reversed on the law, with costs, and vacated the preliminary injunction because the noncompete had already been deemed overly broad and unenforceable; thus, SilverLining could not satisfy the requirements for preliminary injunctive relief (citing U.S. Re Cos. Inc. v Scheerer, 41 AD3d 152, 155-156; Modern Telecommunications v Zimmerman, 140 AD2d 217, 221).
Legal Significance
Confirms that a preliminary injunction cannot be used to enforce a noncompetition agreement already adjudicated unenforceable; overbroad industry/geographic restrictions and inadequate compensation for the full restraint period undermine enforceability under New York law.
Where a noncompete has been found overly broad and unenforceable, a court will not grant a preliminary injunction to enforce it; broad, sweeping restrictions and incomplete compensation for the restraint period are fatal to enforcement.