Posts tagged with "global operations"

What is the enforceability of an employment contract in Connecticut?

In Connecticut, the enforceability of an employment contract is based on general contract principals. This contract can be verbal, written or a combination of the two. In addition, employment contracts in Connecticut can be either express or implied. An employment contract is an express contract if it is written and signed by both parties. A valid express employment contract will contain wording that describes the job duties, working conditions, compensation, benefits and other employment details.

If, alternatively, an employment contract is implied, the terms of the contract would come from the conduct of the parties, verbal promises made before employment started, information stated in an employee handbook, promises made in an offer letter, and other sources.

Today, most employers have their employees sign a document agreeing to at-will employment as opposed to a defined term in an employment contract. This way, either the employer or the employee may end the employment relationship at any time, and usually for any reason.

In any case, Connecticut courts regularly find employment contracts enforceable against both parties. Such agreements will be upheld by Connecticut courts as long they do not violate any laws and were not entered fraudulently, under duress, or by mistake of the parties. If valid, both parties to the contract will be held responsible for abiding by its terms and liable for any breach. Frequently, allegations of breach of an employment contract involve issues of compensation and termination of employment.

If you are interested in drafting an enforceable employment contract, or interested in determining whether an employment contract you have already signed is binding, please feel free to call the Employment Law Group of Maya Murphy, P.C. in Westport, CT at 203-221-3100 or email Ask@mayalaw.com today.

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Ambiguous “General Release Agreement” and Global Restrictions Invalidate a CT Non-Compete

Ambiguous “General Release Agreement” and Global Restrictions Invalidate a CT Non-Compete
Connecticut Stone Supplies, Inc. v. Fresa, 2002 Conn. Super. LEXIS 4141

This case concerns Connecticut Stone Supplies’ (CSS) legal dispute with two former employees regarding the enforcement of their non-compete agreements. The company employed Ms. Amy Fresa from May 15, 2000 until April 4, 2002 as an Administrative Assistant. She began to work at the company as a temporary employee in connection with Reitman Personnel and the company officially hired her as a full-time employee on August 14, 2000. CSS had her sign an “Employee Confidentiality and Non-Competition Agreement” when it first hired her and then had her sign a “General Release and Settlement Agreement” when it terminated her employment. The restrictive covenant prohibited her from working at a competing company for a period of two years and additionally stipulated that she could not solicit CCS’s current of potential clients within a three hundred mile radius. She began to work for O&G, a company in direct competition with CSS, on August 2002. Mr. Travis Simms worked for the company from March 29, 2000 until January 22, 2011 at which time he also began to work for O&G. He signed a non-compete agreement in the same manner as Ms. Fresa but did not execute a General Release Agreement upon termination. CSS sued both former employees in Connecticut state court and sought to enforce their respective non-compete agreements.
Ms. Fresa and Mr. Simms argued that the non-compete agreements were not binding upon them because the covenants lacked consideration and their terms were unreasonable. Ms. Fresa additionally contended that the General Release Agreement “extinguished any rights that might exist under it [the non-compete agreement]”. The court found in favor of Ms. Fresa and Mr. Simms and held that their restrictive covenants with CSS were not enforceable. The court analyzed the General Release Agreement and found that it contained ambiguous language that created an unintended benefit for CSS. The company, according to the court, should not be allowed the benefit of enforcing the agreement merely because of an unintended, ambiguous clause in an employment agreement that it had drafted. The court used this analysis to determine that Ms. Fresa’s non-compete was unenforceable.
The court relied on a different analysis to conclude that Mr. Simm’s non-compete agreement with CSS was unenforceable. Here the court examined the restrictive provisions of the non-compete agreement to determine whether they were limited and reasonable in a manner that the agreement fairly balanced the interests of the parties involved. While there was a geographical restriction associated with the non-solicitation clause (three hundred miles), the non-compete clause did not have a geographical limitation and as such “means [the employee] cannot compete anywhere in the world against the plaintiff for a period of two years from termination”. The court found this to be completely unacceptable and held that the global prohibition on competitive employment was “patently and grossly unreasonable”. CSS stated that is conducted business all throughout the state of Connecticut but failed to offer any evidence that it carried out global operations or that a worldwide prohibition on competing employment was necessary to protect its legitimate interests. The court invalidated Mr. Simm’s non-compete agreement in light of the unreasonable and oppressive nature of the provisions contained in agreement that he executed with CSS.
Browse > Home / Employment & Labor Law / Enforcing a Non-Compete Agreement in the Connecticut Insurance Industry
Enforcing a Non-Compete Agreement in the Connecticut Insurance Industry

October 25, 2011 · Print This Article
Enforcing a Non-Compete Agreement in the Connecticut Insurance Industry
Grayling Associates, Inc. v. Villota, 2004 Conn. Super. LEXIS 1859
Grayling Associates, Inc., an executive recruiting agency for large national insurance companies, employed Mr. Albert Villota from October 2002 to April 8, 2004. The parties executed a non-compete agreement at the start of Mr. Villota’s employment that prohibited him from working at a competing firm within a one hundred mile radius of Grayling’s Connecticut office for a period of two year after his termination. He began to work at a direct competitor, Park Avenue Group, Inc. (PAG), after he voluntarily terminated his employment with Grayling. The company sued Mr. Villota in Connecticut state court and sought the enforcement of the provisions contained in the non-compete agreement.
The court found in favor of Grayling and granted the company’s request for injunctive relief. It enjoined Ms. Villota from working at PAG or other companies in competition with Grayling until April 8, 2006, the end of the two-year period as stipulated in the non-compete agreement. The court went on to confirm that the time and geographical restrictions in the agreement were reasonable so that they properly balanced the interests of the parties.
The major point of contention in the case focused on the one hundred mile radius restriction. Grayling was based in Hartford, referred to by many in the business world as the “insurance capital of the world” and as such, the nature of its services was very dependent on its location and proximity to the city. Many of the nation’s most prominent insurance firms have their headquarters in Hartford and Mr. Villota’s actions within the vicinity of the city could negatively affect Grayling’s business interests and operations. Grayling noted that the non-compete agreement allowed for the application of the “blue pencil rule” that would allow the court to modify the terms of the geographical restriction. The court held that the restriction was enforceable as stated in the agreement and enforced the one hundred mile radius provision to protect Grayling’s legitimate interests.
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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