Second Circuit Does Not Allow Two Bites at the Litigation Apples
Posted:
Tuesday, December 23, 2008
By:
Joshua C. Dickinson
Topic:
Non-Compete Cases
Recently, the Second Circuit Court of Appeals held that a former employee could not split his causes of action against its former employee for claims arising out of a non-competition agreement. In
GIANNONE v.
YORK TAPE & LABEL, INC.
,
548 F.3d 191 (2nd Cir. 2008), a former employee filed a lawsuit seeking declaratory and injunctive relief against his former employer claiming that a non-competition agreement he signed was unenforceable. He ultimately prevailed. One year later, he filed a second lawsuit against his employer in state court, this time seeking money damages arising from the same agreement. The case was first removed to federal court. The federal district court dismissed the lawsuit under the doctrine of res judicata. The Second Circuit affirmed, agreeing with the trial court that the employee had impermissibly sought to split his claims. Because the employee had prevailed on his previous claim for declaratory judgment, he could not avail himself of the "declaratory judgment exception."