Connecticut Non-Compete Invalidated on Grounds of Unnecessary Protection Afforded to Employer

Connecticut Non-Compete Invalidated on Grounds of Unnecessary Protection Afforded to Employer

Sanford Hall Agency, Inc. v. Dezanni, 2004 Conn. Super. LEXIS 3574

Ms. Lynne Dezanni worked for Sanford Hall Agency, an Avon, Connecticut based insurance company, from 1990 to 2004 where she served as a personal lines (primarily automobile and homeowners insurance) salesperson for clients whose last name started with “A” through “F”.  In 1994, Ms. Dezanni signed an employment agreement that included a non-compete covenant prohibiting the solicitation or attempted solicitation of Sanford Hall’s clients or the disclosure of the company’s confidential information.  In May 2004, Ms. Dezanni was contacted by a recruiter at Sinclair Insurance Group, a direct competitor of Sanford Hall based in Wallingford, Connecticut.  In the following weeks, Sanford Hall announced to its employees that it was engaging in a transaction to sell its assets.  Fearing that she would no longer have a job if the company were sold, Ms. Dezanni accepted employment at Sinclair on June 11, 2004.  The company was in fact sold to a New Jersey insurance company on November 1, 2004.  Sanford Hall commenced legal action alleging that Ms. Dezanni breached the written employment agreement and the non-compete covenant by soliciting its clients and disclosing confidential client information to Sinclair.

Ms. Dezanni however argued that she was not in breach of the non-compete agreement because it contained unreasonable provisions and was therefore unenforceable.  Additionally, she argued that the employment agreement reserved the right for her to compete in the event that Sanford Hall sold its business.  The court in this case found in favor of Ms. Dezanni and held that the non-compete agreement was in fact unreasonable and unenforceable.  The court based this decision on the fact that Ms. Dezanni was not in a position at Sinclair to threaten Sanford Hall’s interests in its customer relationships and contracts.  Her job at Sanford Hall pertained to the initial contact with clients but her contact usually ended there.  She was not charged with entertaining, socializing with, or schmoozing clients over the phone or in person.  She would not review the contracts when they were due to expire, as the insurer and not the agent handled this business activity.  The court concluded, “Dezanni’s contact with the customers was too infrequent and irregular to pose any threat to the plaintiff’s relationship with its customers”.

The court also held that the agreement excessively restricted Ms. Dezanni from pursuing her occupation and instituted unnecessary limitations because it pertained not only to past and present clients, but to also future ones as well.  Ms. Dezanni was able to prove that the non-compete clause of the employment agreement afforded more protection to Sanford Hall than was reasonably necessary and as a result severely disadvantaged her and ran contrary to the interests of the public.  For these enumerated reasons, the court refused to enforce the non-compete clause of the employment agreement.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

Connecticut Non-Compete Prohibits Client Solicitation in Investment Services Industry

Connecticut Non-Compete Prohibits Client Solicitation in Investment Services Industry

Robert J. Reby & Co. v. Byrne, 2006 Conn. Super. LEXIS 2115

Mr. Patrick Byrne worked at Robert J. Reby & Co., a financial firm in Danbury, Connecticut, as a registered investment advisor from June 2005 to July 2005.  The company advises high net worth individuals and families in the areas of trusts, wealth management, and taxation.  Mr. Byrne signed an employment contract with Robert J. Reby & Co. wherein it contained a non-compete agreement that stipulated he be prohibited from soliciting the company’s clients or disclosing any of its confidential information in the event of his termination.  Following Mr. Byrne’s short employment with Robert J. Reby & Co. he began to work at Aspetuck Financial Management, LLC, a wealth management firm based in Westport.   Robert J. Reby & Co. alleged that Mr. Byrne solicited its clients for his new firm, Aspetuck, in direct violation of the non-compete agreement.  Mr. Byrne countered that the provisions of the non-compete were unreasonable in the sense that it placed an excessive restraint on his trade and prevented him from pursuing his occupation.

The court held that the non-compete agreement between Mr. Byrne and Robert J. Reby & Co. contained reasonable terms and was enforceable.  It failed to see any merits in Mr. Byrne’s claim that the agreement was too broad and created an insurmountable occupational hardship.  The provisions of the agreement only restricted a very small segment of Mr. Byrne’s occupational activities.  The terms he agreed to only prevented him from soliciting the specific and limited group of people that were clients of Robert J. Reby & Co..  The court held that the covenant was not a pure anti-competitive clause because it did not prevent him from engaging in the investment services industry as a whole.  This limited scope with regard to the prohibition levied upon Mr. Byrne caused the agreement to be reasonable and therefore enforceable.

The court also took time to discuss the public policy behind finding the non-compete agreement enforceable and establishing the legitimacy of the agreement.  Companies, according to the court, have a legitimate interest in protecting their business operations by preventing former employees from exploiting or appropriating the goodwill of its clients that it developed at its own, and not the employees’, expense.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment contract, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

Earning Capacity Update: Court Finds Lawyer Capable of Earning Twice As Much As Reported

“Earning capacity…is an amount which a person can realistically be expected to earn considering such things as his vocational skills, employability, age, and health,” pursuant to Weinstein v. Weinstein, a 2007 decision of the Connecticut Supreme Court.

Despite the downtrodden economy, family law judges are still applying the well-established principles of Weinstein in assigning “earning capacity” to litigants in divorce cases where circumstances demonstrate that income could and should, in fact, be substantially greater than what is reported during the divorce.

Just last month, the Superior Court of Hartford (Adelman, J.) held that a law partner who alleged his income was $58,937.00 in 2010 was actually capable of earning $120,000.00 per year, and fixed alimony awards based on such earning capacity.  Traystman v. Traystman, Hartford J.D., Docket No. FA10-4050338.

If your divorcing spouse is currently unemployed, underemployed, or otherwise (perhaps deliberately) earning less than he or she should reasonably be expected to earn, we recommend you consult with our family law attorneys at Maya Murphy, P.C..  Any inquiries regarding this posting or confidential inquiries concerning the subject matter may be directed to Attorney H. Daniel Murphy at hdmurphy@mayalaw.com, or by phone at 203-221-3100.

 

Connecticut Law Governs Non-Compete for Employee Based in Company’s Brazil Office

Connecticut Law Governs Non-Compete for Employee Based in Company’s Brazil Office

MacDermid, Inc. v. Selle, 535 F.Supp.2d 308

Mr. Raymond Selle worked for MacDermid, Inc. for thirty years in various capacities at facilities in Connecticut, Maryland, and Sao Paulo, Brazil.  MacDermid is a specialty chemical company engaged in a range of development, manufacture, and sale of chemicals and their corresponding processes.  Mr. Selle resigned from the company in 2007 while stationed in Brazil and immediately began work at Enthone, a West Haven based company with a presence in Brazil, as its South American New Business Development Manager.  MacDermid brought suit against Mr. Selle to enforce employment agreements from 1996 and 2002, seeking to prevent his employment at Enthone and the disclosure of confidential information.  MacDermid’s basis for legal action was two restrictive covenants signed by Mr. Selle and the vast amount of confidential information he acquired while employed at MacDermid.

The first “Employee’s Agreement” was signed November 24, 1996 and included a one-year non-compete agreement prohibiting employment with an industry competitor and an indefinite confidentiality agreement.  Mr. Selle signed a second non-compete and non-disclosure agreement on June 25, 2022 when he began his position at MacDermid’s Sao Paulo office.  Additionally, the agreement stipulated that its provisions were to be “construed and enforced in accordance with the laws of the State of Connecticut, without regard to conflict of law principles”.  MacDermid sought to enforce both the one-year non-compete clause and the indefinite confidentiality clause.  The company claimed that Mr. Selle was privy to considerable confidential information while employed there, including business strategies, research & development projects, and customer contact information and transaction history.

The federal court found in favor of MacDermid, enjoined Mr. Selle from employment with Enthone or any other of MacDermid’s industry competitor until September 10, 2008 (the duration of the one-year prohibition), and enjoined him from disclosing any confidential or proprietary knowledge acquired during his employment with MacDermid.  The court found that there was “no basis for doubting the validity and enforceability of his [Selle’s] 1996 and 2002 employment agreements with MacDermid”.  Mr. Selle’s tried to make the claim that the restrictive covenants were too broad and favored the employer but the court concluded that the covenant’s provisions were narrow and limited in scope so as not to dramatically disadvantage the employee.

The court also discussed and decided what jurisdiction’s law to apply.  Mr. Selle argued that Brazilian law should govern the agreement and legal proceedings since that was where he found new employment at Enthone.  Mr. Selle made this assertion because he felt that Brazilian law reflects a fundamental public policy against the enforcement of restrictive covenants in employment contracts.  The court however held that Connecticut law superseded Brazilian law in this case and would govern the restrictive covenant, as specified and agreed to in the 1996 and 2002 agreements.  This case shows that in certain restrictive covenants, Connecticut law (or any state’s law) can be governing even when employment takes the employee out of the country.  The choice of law provision establishes the controlling legal principles (in this case, those of Connecticut) of the restrictive covenant and is characterized by global application.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

 

Connecticut Non-Competes and Jurisdiction Can Be Applicable To Out-Of-State Companies And Employees

Connecticut Non-Competes and Jurisdiction Can Be Applicable To Out-Of-State Companies And Employees

United Natural Foods, Inc. v. Hagen, 2010 U.S. Dist. LEXIS 82871

This case concerns two former employees, Mr. Barclay Hope and Mr. James Hagen, of United Natural Foods.  The two men worked for Albert’s Organics, a nationwide subsidiary of the Providence, Rhode Island based United Natural Foods.  Mr. Hope was employed in the Los Angeles area from 1997 to December 2006 at which time he began to work as an independent consultant in the organic food industry.  In May 2010 Mr. Hope accepted the position of Chief Executive Officer at Freshpack Produce, a Denver, Colorado based produce grower and shipper.            Albert’s Organics hired Mr. Hagen in March 2003 upon the recommendation of Mr. Hope to work in the company’s Denver offices.  Mr. Hagen left Albert’s in April 2010 and began a new job as the Chief Operating Officer of Freshpack Produce, the same company as Mr. Hope, and upon the recommendation of Mr. Hope.  While employed by United Natural Foods Mr. Hagen and Mr. Hope exchanged many emails wherein they transferred some of United Natural Foods’ transactions, customer information, trade secrets, and other confidential information.  Mr. Hope maintained hard and electronic copies of this confidential information and utilized it in the management of Freshpack Produce’s business operations.

Mr. Hope signed an “Employment Termination Agreement and Release” upon the termination of his employment with United Natural Foods wherein he agreed to abide by a non-compete agreement (one-year duration) and confidentiality provision (indefinite).  A special and notable feature of this agreement however was the choice of law provision that stated the agreement was “made pursuant to and shall be governed by the laws of the State of Connecticut” such that “the parties agree that the courts of the State of Connecticut, and the Federal Courts located therein, shall have exclusive jurisdiction over all matters arising from this Agreement”.  This is especially interesting given that none of the parties (individuals or the companies) in this case are based in Connecticut.  United Natural Foods is based in Rhode Island, Freshpack Produce is based in Colorado, Mr. Hagen worked in Colorado, and Mr. Hope worked in California.  Connecticut law is must more apt to enforce a non-compete agreement than many states.  Colorado for example, where Freshpack Produce and Mr. Hagen were based, historically has a policy against the enforcement of non-compete covenants.

The courts do not see a problem in enforcing a non-compete agreement under Connecticut law for an individual living in California and working for a Colorado based company.  In the past, courts have enforced non-compete agreements in similar situations because the parties both agreed to the jurisdiction in the covenant and the swiftness and ease of air travel negates distance as an issue.  This case illustrates how employees should be mindful of the jurisdiction contained in the choice of law provision in their non-compete agreement.  The law and court governing the agreement could have a profound effect on the employee should a dispute arise between the signing parties of the agreement.  Corporations have the liberty to afford the best and brightest lawyers to handle their legal matters and they do things for specific, advantageous reasons.  It is safe to say that a corporation’s legal department will construct an agreement that utilizes a jurisdiction that will be favorable to them in the event of a legal dispute with a former employee.  Employees should pay close attention to the jurisdiction and make efforts to understand the applicable law if the choice of law is not that of the state where they live.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

 

Difference in Job Responsibilities and Knowledge Prevents Breach of Non-Compete Agreement

Difference in Job Responsibilities and Knowledge Prevents Breach of Non-Compete Agreement

Tyco Healthcare Group v. Ross, 2011 U.S. Dist. LEXIS 49867

Tyco Healthcare, through its subsidiary Covidien (a medical device manufacturer and distributor), employed Mr. Adam Ross as a design engineer in the company’s research and development division from November 14, 2006 to March 18, 2011.  As part of his employment contract, Mr. Ross signed an “Employee Agreement regarding Confidential Information, Inventions, and Conflicting Employment” that specified that Mr. Ross could not divulge, in any capacity, any of Covidien’s confidential information that he was privy to during the time of his employment.  He additionally agreed to not seek for or engage in employment with an industry competitor for two years after the termination of his employment.  Mr. Ross began searching for a new job in 2010 and applied to Intuitive Surgical upon seeing a public advertisement.  Mr. Ross was up front with Intuitive about the non-compete agreement and went so far as to engage an outside attorney for questions he had in relation to the non-compete agreement.  Intuitive hired Mr. Ross as a design engineer in its Milford, CT office  and he began his new job on March 21, 2011, a mere three days after leaving the employ of Covidien.

At this point, Covidien filed suit against Mr. Ross but stated that it was open to other solution besides litigation.  Its main concern was the confidential industry information that Mr. Ross possessed because of his years at Covidien but it also wanted to enforce the two-year prohibition on employment with a competitor.  The company submitted several proposals to avoid litigation: 1) asked Intuitive to refrain from hiring Mr. Ross, 2) was willing to retain Mr. Ross as an employee, 3) compensate Mr. Ross in the event he was not able to find employment as an engineer at a non-competitor.  Mr. Ross and Intuitive ultimately turned down all of these offers, resulting in Covidien commencing further litigation activity.  Covidien asked the court to restrain Mr. Ross from being employed at Intuitive or divulging any trade secrets acquired at Covidien.

The District Court of Connecticut found that the non-compete between Mr. Ross and Covidien was in fact enforceable on the grounds that it contained reasonable provisions and did not overly disadvantage one party.  In addition to a valid and enforceable non-compete agreement, Covidien must be able to show breach in order for its request to be granted, and as such, the court turned to the issue of whether or not there was a breach of this agreement.  In this matter, the court found that Mr. Ross did not breach the non-compete agreement despite gaining employment at a competitor of Covidien.  This legal discussion focused on the fine details and responsibilities of the jobs at Covidien and Intuitive, concluding with the court emphasizing the differences.  The projects, responsibilities, technology, and knowledge required/used/gained by the two jobs were so different that, according the court, there was not convincing evidence that Mr. Ross would be “performing ‘similar services’ at Intuitive, or that he will inevitably use and disclose confidential and proprietary information, in violation of his non-compete agreement”.

This decision demonstrates that upon close examination of very fine employment details, a court will not always find breach of a non-compete in light of gaining employment with a direct competitor of the previous employer and signatory to the non-compete agreement.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

 

 

Court Denies Mother’s Request to Relocate with Minor Child

In a recent post judgment divorce action originating in the Superior Court for the Judicial District of Hartford, Judge Prestley denied a mother’s request to relocate to France with the parties’ children.  The parties were married in 1981 and after twenty-six years, sought and obtained a divorce in 2008.  During their marriage, the parties had three children, born in 1988, 1992 and 1998.  The youngest child was the only minor at the time of the post judgment action.

In August, 2009, after reconnecting with a high school friend who was living in France, the mother informed the father that she was going to make two-month-trips overseas, returning home for two weeks in between.  Sometime later, she informed the father that she was engaged to the high school friend, and planned to move to France with the children permanently.  The father initially agreed to the plan, but then changed his mind.  In June, 2010, the mother filed a Motion to Modify Visitation requesting permission to relocate with the children.  In October, 2010, the father agreed to the move, but only for the 2010-2011 school year.  As the parties were unable to reach an agreement, a full hearing was held in January, 2011.

In its decision the Court noted that, pursuant to Connecticut General Statutes §46b-56d(a), the party wishing to relocate must demonstrate that the relocation is for a legitimate purpose, and that the proposed relocation is reasonable in light of such purpose. In this particular case the Court found the plaintiff had no legitimate reason to justify the proposed move. The mother testified that although she could not work legally in France, she would continue to work with her clients and structure workshops in her field. The plaintiff testified she was going to teach one seminar in March 2011 in the state of Florida (while temporarily living in France), and that she taught another workshop for which she earned $500.00.  The Court found that although the plaintiff expressed her opinion that there were more opportunities for her in France, she provided no details to support that claim, and, thus, could not demonstrate that furthering her career opportunities was a legitimate reason for the move.

The plaintiff also contended that relocating to France would provide a cultural opportunity to the parties’ minor child. She testified that the child was a speed-skater, that he had a new coach in France and that skating was more important for him than spending time with the father, from whom he needed to heal.  She further suggested that the child had been unhappy and stressed since the divorce, and that contact between the son and his father was not healthy for the child.

With respect to the child’s needs, the Court found that although there was credible evidence that verbal altercations occurred between the mother and the father in the presence of the children, and that the child was upset about his father’s objections to his moving to France, the evidence also established that the defendant participated in his children’s lives to the extent that he was able given his work schedule.  The Court further found that the father’s relationship with his son was good until the pending issues arose, that the child was involved in speed-skating in Connecticut prior to the move to France, and that skating opportunities were still available to him here.

The Court ultimately held that it could not find any legitimate purpose, financial or otherwise, to justify the proposed relocation.  It noted that although time spent in a foreign country may provide some cultural advantages, those potential advantages were overshadowed by the irreparable harm the child would likely suffer as his relationship with his father was continuing to deteriorate with distance.  The Court essentially held that repairing and fostering the child’s relationship with his father was more important that any cultural advantages he may have gained by moving.

Attorney DeMeola practices out of Maya Murphy’s Westport office.  He welcomes inquiries and can be reached by telephone at (203) 221-3100 or by e-mail at mdemeola@mayalaw.com.

 

Divorce Co-Mediation: Less Fighting, Better Results, and Lower Fees

by H. Daniel Murphy, Esq.

You have taken the difficult step of recognizing that a marriage will no longer work – or perhaps you have been served with divorce papers by your spouse.  A world of uncertainty awaits, with questions like:

“What will I do now?”

“Do I need a lawyer?”

“Can we both afford lawyers?”

“How ugly will this get?”

“What will happen with the children?”

“What if I want to retire?”

“What will I have to pay?” or “What will I receive?”

“How long will this take?”

“Will I have to testify in court?”

Or perhaps…

“Is there another way?”

There IS another way.  As an alternative to the traditional divorce model – with dueling attorneys, depositions, motions, court appearances, and skyrocketing costs – many individuals are now turning to private mediation as a means to obtain a divorce judgment.  Mediation is an informal process in which a neutral third party – sometimes a lawyer, sometimes a therapist or counselor – acts as a sounding board and helps the parties identify and resolve their disputes.

Mediation can often be effective, although in many instances one party or the other might feel as though he or she has “won” or “lost” the mediation, gaining some perceived empathy from the mediator because of some similarity or identification with that person.  In those cases, the parties’ mutual selection of a mediator may have served to alienate one party or another, with feelings that he or she has selected the “wrong” person to resolve the dispute.  For this reason, the parties should meet with the proposed mediator together, to gain a comfort level with the mediator at the same time, and to familiarize themselves with the mediator’s style, approach, and objectives.

To address this issue, unlike many law firms who may offer mediation services, our office provides our clients with an option to co-mediate their family law dispute.  Co-mediation pairs two professionals as independently functioning neutrals to lend greater balance, identification, and equity to the mediation process.  At Maya Murphy, we offer divorcing couples the option to merge the experience of a family law attorney and aggressive courtroom advocate with the expertise of a licensed, clinical psychologist.  With one stop at our Westport office, divorcing couples can work with our co-mediation professional team.  From the legal angle, we will identify and narrow the issues in dispute, guiding you through the court system and assisting the parties with the preparation of legally enforceable agreements on property division, child support, alimony, custody, post-secondary educational support, and all related issues.  From the therapeutic and clinical perspective within that co-mediation process, we simultaneously offer the skill set of a clinical psychologist with specialization in stressors within the home, at-risk children and associated custody issues, substance abuse and anger management issues, and a keen acumen towards resolving conflict.

All of the above are provided to our co-mediation clients a fraction of the costs incurred every day by parties in conventional divorce litigation.  Our co-mediation professionals will work seamlessly and tirelessly to resolve your family law disputes – efficiently, effectively, and painlessly.

For more information about our Firm’s mediation and co-mediation options, kindly contact H. Daniel Murphy at hdmurphy@mayalaw.com or at 203-221-3100.

 

Excessive Geographical Limitation in Connecticut Non-Compete Agreement Found Unenforceable

Excessive Geographical Limitation in Connecticut Non-Compete Agreement Found Unenforceable

Timenterial, Inc. v. Dagata, 29 Conn. Supp. 180

Timenterial was a company that engaged in the sale and rental of mobile units and had previously employed Mr. James Dagata.  The employment contract contained a clause wherein Mr. Dagata agreed not to “engage in any business venture having to do with the sale or rental of mobile homes or mobile offices in a fifty miles radius from any existing Timenterial, Inc. sales lot” for one year following the termination of his employment.  Mr. Dagata terminated his employment on June 1, 1970 and Timenterial claimed that he had been active in business ventures involving mobile homes beginning June 12, 1970 at an office located a mere one-quarter mile from Timenterial’s Plainville, CT office.  Timenterial commenced a suit for violation of the non-compete agreement and sought to restrain Mr. Dagata from further mobile home business ventures in accordance with the agreement.

The court found in favor of Mr. Dagata and held that the non-compete agreement was unenforceable because the geographical restriction in the agreement was unreasonable and excessive.  At the time of legal proceedings, Timenterial had seven facilities in Connecticut, four in Massachusetts, two in Vermont, and one in New Hampshire.  The court applied the fifty-mile radius as stipulated in the agreement and held that this territorial prohibition was unreasonable.  The application of the agreement would mean that Mr. Dagata could not be involved in the mobile homes business in all or substantial parts of Connecticut, New York, Massachusetts, Vermont, New Hampshire, and Rhode Island.  This placed excessive restrictions on Mr. Dagata and severely limited the opportunity for him to practice his occupation.  This excessive and burdensome characteristic of the non-compete rendered the agreement unenforceable and the court concluded that Mr. Dagata’s actions did not constitute a breach of the restrictive covenant.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

Identifying de facto Geographical Limitations in Connecticut Non-Compete Agreement

Identifying de facto Geographical Limitations in Connecticut Non-Compete Agreement

New Haven Tobacco Co., Inc. v. Perrelli, 18 Conn.App. 531

New Haven Tobacco Company operated a wholesale tobacco business and entered into an employment contract with Mr. Frank Perrelli in December 1980.  As part of the contract Mr. Perrelli signed a non-compete agreement wherein he agreed to “not directly or indirectly sell products similar to those of the Employer (New Haven Tobacco Co.) to any of the customers he has dealt with or has discovered and became aware of while in the employ of the Employer for a period of twenty-four months from the termination of his employment”.  In November 1981 Mr. Perrelli voluntarily left the employ of New Haven Tobacco and proceeded to start his own wholesale tobacco business.  New Haven Tobacco sued to recover money damages and for injunctive relief in the form of a court order restraining Mr. Perrelli’s wholesale tobacco business activities.

The trial court found in favor of Mr. Perrelli and denied New Haven Tobacco’s injunction application.  It found that the agreement lacked geographical limitations and went against the public’s interest  New Haven Tobacco appealed to the Appellate Court of Connecticut claiming that the trial court erred when it held that the non-compete agreement was unenforceable.  The Appellate Court reversed the trial court’s decision and found in favor of New Haven Tobacco.  The Appellate Court held that the agreement in dispute focused not on Mr. Perrelli engaging in a certain business sector, but instead on the prohibition of transacting with a specific group of customers, namely those of his former employer, New Haven Tobacco.  By limiting the customers the agreement applied to, the agreement in essence instituted a geographical limitation.  The customer list was local and de facto limited the agreement to the greater New Haven area.  The Appellate Court also held that the trial court erred with regard to invalidating the non-compete agreement on the grounds of public interest.  The trial court concluded that the provisions of the agreement aided in creating and maintaining a monopoly on the wholesale tobacco business and thus disadvantaged customers and was contrary to public interest.  The Appellate Court however found this assertion to be unsubstantiated and held that the non-compete agreement did not unreasonably interfere with the public’ interest.  The enforcement of the non-compete agreement would not disadvantage the public or place hardships on individuals wishing to transact in the local tobacco wholesale industry.

If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

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