Last month, the United States District Court for the Northern District of New York granted an employer’s application for a preliminary injunction based on the former employee’s breach of his noncompete.
In granting the preliminary injunction, the court in Plug Power, Inc. v. Shokrian, No. 1:26-cv-01277 (N.D.N.Y. Jul. 24, 2026), held that the employee’s access to confidential information, combined with other acts evidencing an intention to compete, was sufficient to establish irreparable harm without evidence that the former employee used or disclosed any of the employer’s confidential information. The court further ruled that the employer established a likelihood of success on the merits even though the employee was involuntarily terminated because the termination was for cause.Relevant Facts
Defendant Mazdak Shokrian served as Plaintiff Plug Power’s (a hydrogen energy company) Senior Director of Technology, Engineering, and Design from January 2022 until his termination for cause on November 10, 2025. Plug Power established that in his role, Shokrian had substantial access to Plug Power’s confidential and proprietary information, including customer lists, customer preferences and information, financial data, vendor information, and proprietary information about Plug Power’s systems, processes, and strategy for expansion.
In May 2025, Plug Power designated Shokrian as a “key contributor” and in exchange, he signed a 2025 Key Contributor Agreement (the “Agreement”) containing noncompete and non-solicitation covenants. The one-year noncompete prohibited Shokrian from working “in any capacity” for any business involved in designing or manufacturing proton exchange membrane fuel systems, generating, transporting, storing, or dispensing hydrogen, or any other industries in which Plug Power was engaged or actively considering. The restriction applied whether Shokrian’s termination of employment was voluntary or involuntary.
On November 10, 2025, following an internal investigation that determined Shokrian had been dishonest during an earlier workplace investigation, Plug Power terminated Shokrian’s employment for cause. The investigation revealed that during his employment, Shokrian created numerous calendar entries referencing a “New Co”, outlined business plans including methanol production, and had registered an LLC called Enoxis with his home address. Shokrian also directed employees to perform work on methanol development while instructing them not to save materials on the company’s shared drive and not to disclose the project to others.
After his termination, Plug Power learned that Shokrian accepted a position as Engineering Operations Manager with ACD, LLC d/b/a Nikkiso Expander Application Technology (“ACD”), which designs and manufactures systems and equipment that is directly competitive to Plug Power’s offerings. Plug Power filed suit and moved for a preliminary injunction.
The New York Forum-Selection Clause
As a preliminary matter, Shokrian challenged venue and sought a transfer of the case to the Southern District of Texas, arguing that he resided in Texas and that it would be “extremely inconvenient” for him to appear in the Northern District of New York. The court rejected this argument, noting that Shokrian was a signatory to that Agreement that contained a valid forum selection clause designating New York as the proper venue.
Denying the motion to transfer venue, the court reasoned that a valid forum-selection clause must be “‘given controlling weight in all but the most exceptional cases.’” Plug Power (citing Atl. Marine Constr. Co., Inc. v. U.S. District Court, 571 U.S. 49, 63 (2013)). The court concluded that because Shokrian had signed the Agreement establishing New York as the agreed-upon forum and did not demonstrate any of the narrow exceptions to enforceability, Plug Power established proper venue in the Northern District of New York.
The Court’s Preliminary Injunction Analysis
In addressing Plug Power’s application for a preliminary injunction, the court applied the well-settled elements, including that a party must demonstrate: (1) irreparable harm; (2) either a likelihood of success on the merits or both serious questions and a balance of hardships decidedly in the movant’s favor; and (3) that an injunction is in the public interest. Id. (citing St. Joseph's Hospital Health Ctr. v. American Anesthesiology of Syracuse, P.C., 131 F. 4th 102, 106 (2d Cir. 2025)).
Plug Power Established Irreparable Harm
The court emphasized that irreparable harm is “the single most important prerequisite for the issuance of a preliminary injunction.” Shokrian argued against irreparable harm because he had not actually disclosed any Plug Power confidential information to ACD, but the court rejected this argument, confirming that under New York law, a plaintiff need not demonstrate that disclosure has already occurred. Rather, the question is whether there is a risk that such information will be disclosed. The court clarified that “the mere exposure of an employee to the trade secrets or confidential information of a former employer does not, without more, create a threat of irreparable harm[,]” but the “operative question is whether there is a risk that such information will be used or disclosed in a way to cause harm.”
Instead, the court focused on the totality of Shokrian’s conduct while employed at Plug Power that showed he had engaged in a sustained pattern of activity to conceal his competitive activity. More specifically, the court focused on Shokrian’s creation of calendar entries with coded language, establishing a personal business while employed with Plug Power, instructing subordinates not to document competitive work on company systems, and continuing relationships with prospective clients even after Plug Power declined to pursue business with them.
The court found this pattern dispositive and determined that Shokrian established his disregard for his legal and contractual obligations and that a future breach was foreseeable. Accordingly, the court concluded that Plug Power had established a threat of irreparable injury where Shokrian possessed Plug Power confidential information and demonstrated a disregard for his other contractual obligations.
Plug Power Established Likelihood of Success on the Merits
Shokrian argued that Plug Power did not establish likelihood of success on the merits because, among other arguments, he did not voluntarily resign and Plug Power terminated his employment. On that issue, the court provided its understanding of New York law, stating that “[a] non-compete agreement is unenforceable under New York law where the termination of employment is involuntary and without cause.” Id. (citing Adecco USA, Inc. v. Staffworks, Inc., No. 6:20-CV-744, 2021 WL 2593304, *4 (N.D.N.Y. June 23, 2021)). The court further explained the reasoning for this principle is because termination without cause destroys the mutuality of obligation on which the covenant depends.
However, where the employee is terminated for cause, the noncompete may be enforced according to its terms.
The court found that Plug Power established a likelihood of success on the merits, including that the noncompete would likely be enforceable due to Shokrian’s termination for cause. The court further explained that the noncompete was narrowly tailored to protect Plug Power’s legitimate business interests, including those industries that Plug Power was engaged during Shokrian’s employment.
The Public Interest and Balance of Equities Weighed in Plug Power’s Favor
The court acknowledged that that enforcement of narrowly tailored noncompetes serves the public interest because enforcement encourages parties to abide by their bargained-for agreements. As such, the court found that the balance of equities weighed decisively in Plug Power’s favor.
Furthermore, the injunction does not forbid Shokrian from working altogether. It simply prohibits him from working, for a period of one year, for competitors in the specific technologies and industries covered by the noncompete. Shokrian could pursue engineering positions at non-renewable energy companies that would not violate the noncompete, or alternatively, he could wait out the one-year restricted period. The court determined that the harm to Plug Power from Shokrian’s continued work at ACD and the loss of confidential business information and customer relations far outweighs any burden imposed on Shokrian by requiring him to seek alternative employment.
Key Takeaways for Employers
The Plug Power decision offers several important lessons for employers seeking to protect their competitive interests through restrictive covenants. Although the court applied New York law, many (but not all) of the principles explained by the court apply in other jurisdictions.
- Noncompetes remain enforceable if narrowly tailored: Plug Power confirms that noncompetes in New York remain enforceable if they are limited in scope, duration, and geography. Overly broad provisions may not receive the same deference. Readers to this blog are reminded to check out our 50-State Noncompete Survey to check whether noncompetes are enforceable in a particular jurisdiction.
- The reason for an employee’s termination may be critical: The Plug Power court suggests that, under New York law, a noncompete may be unenforceable if the employee’s employment is terminated without cause but remains enforceable if the employee voluntarily resigns or is terminated for cause. Although some courts in New York (outside of New York County and Bronx County and the Southern and Northern Districts of New York) have held that a noncompete may be enforceable following a termination without cause, the growing trend in New York is that a noncompete is unenforceable following a termination without cause, following the statement from the Court of Appeals of New York in Post v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 48 N.Y. 2d 84, 88 (1979), stating that “an employer may not enforce a noncompete clause against an employee whose termination was involuntary and without cause.” When employers do terminate an employee for cause, it is critical to fully document the reasons for the for-cause termination. As we reported earlier this year, Virginia recently amended its noncompete statute to render noncompetes void and unenforceable against an employee who was discharged from employment without cause, unless the employer provides the employee a severance benefit or other monetary payment. Many other jurisdictions, such as New Jersey, do not have a per se rule against the enforcement of noncompetes against employees terminated without cause, but the reason for the termination can be considered as part of a court’s analysis.
- A legitimate business reason for the noncompete is key: While an employer need not wait until the departing employee actually uses its confidential information before seeking injunctive relief, the employer must demonstrate that the employee actually had access to the company’s confidential information or had access to customer contacts. Plug Power shows that courts will be more likely to grant preliminary injunctive relief if the departing employee not only had access to confidential business information but engaged in some acts that demonstrate his or her intention to use the information or engaged in some other prior conduct in disregard of their contractual obligations.
- Forum selection clauses remain enforceable: If your noncompete contains a forum selection clause designating the state or federal court where disputes must be resolved, federal courts will enforce it absent extraordinary circumstances. State courts may be less willing to enforce a forum selection clause, so it is important to discuss forum selection -- and particularly choice-of-law provisions -- with counsel prior to implementing noncompetes and other restrictive covenants.
Catherine White, a Summer Associate in Epstein Becker Green’s New York office (not admitted to practice) contributed to the preparation of this piece.
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