Posts tagged with "unreasonable"

Duration of Connecticut Non-Compete Agreement Reduced by the Court

Access America, LLC v. Mazzotta, 2005 Conn. Super. LEXIS 2597
Case Background

Ms. Vassilia Mazzotta worked at Access America, LLC, a franchised office affiliated with Century 21 Real Estate, as a licensed real estate broker.  She sold single and multi-family residential real estate in conjunction with her job at Access America until she terminated her employment on April 20, 2005.  There was an employment contract between Ms. Mazzotta and Access America that contained a non-compete clause wherein it stipulated that Ms. Mazzotta could not “engage in or carry on directly or indirectly, a business similar to or competing with any business or products carried on by [Access America] within a fifteen (15) mile radius of 136 Berlin Road, Cromwell, CT (Access America’s office)”.

Shortly after her termination with Access America, Ms. Mazzotta began to work at ERA Innovative Realty, a competing real estate broker well within the fifteen-mile radius as defined in the non-compete covenant of the employment agreement.  Access America brought suit against Ms. Mazzotta and sought injunctive relief in the form of enforcement of the non-compete covenant.  Ms. Mazzotta conversely argued that she signed the restrictive covenant under duress and that its provisions were unreasonable, therefore making it unenforceable.

The Court’s Decision

The court found in favor of Access America, holding that the non-compete agreement was valid and enforceable but did amend its provisions in a way that lessened the occupational hardship placed on Ms. Mazzotta.  The court justified its holding by first discussing the public policy of the issue.  It stated, “It has long been recognized in this state [Connecticut] that a restrictive covenant is a valuable business asset which is entitled to protection”.  Access America, according to the court, had legitimate reasons for using a non-compete agreement to protect its business interest in the form of the money, time, and effort it spent to train Ms. Mazzotta.

The court found Ms. Mazzotta’s defense of signing the agreement under duress to be unpersuasive because the same agreement that contained the restrictive covenant also contained clauses that conferred considerable benefits on her in the form of a private office and a higher commission rate on real estate sales.  In addition, the court cited Ms. Mazzotta’s termination letter wherein she reaffirmed her obligations and prohibitions under the employment agreement.

Reducing the Duration of the Non-Compete Agreement

The one portion of the decision that Ms. Mazzotta found favorable was the reduction in applicable duration for the non-compete agreement.  The court reduced the two-year prohibition down to only one year.  During the legal proceedings, both parties were open to the possibility that the court could reduce the duration of the restriction if in the end it found the non-compete to be valid and enforceable.

Both parties referenced an earlier case, Century 21 Access America v. Nereida Lisboa (35 Conn. L. Rptr. 272 (Conn. Super. Ct. 2003)) where a court had reduced the duration based on the specific language of the employment agreement and specifically the non-compete clause.  This portion of the decision is very valuable as it shows that certain non-compete agreements, depending on the specific language used, are enforceable but the court has the authority to amend the provisions to lessen the restrictions placed on the employee.

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 Enforces Non-Compete Against Connecticut Ophthalmologist

Musto v. OptiCare Eye Health Centers, 2000 Conn. Super. LEXIS 2298
Employment Background

Dr. Anthony Musto owned an eye care services professional corporation with two other doctors from 1973 to 1996.  He worked as a private practice ophthalmologist in the greater Bridgeport area until the three doctors sold the practice to OptiCare Eye Health Centers, Inc. on July 31, 1996.  Dr. Musto owned one-third of the shares of the business, sold them to OptiCare for a profit of $590,000, and signed an employment agreement with OptiCare to work as an ophthalmologist on their payroll.

He worked as an OptiCare employee from August 1, 1996, to August 4, 2000, providing management with a one-year written notice of voluntary termination on August 1, 1999.  Following his termination, Dr. Musto proceeded to open a private practice office in Fairfield and perform surgeries at Bridgeport Hospital, including three extremely rare procedures: dactocystorhinostomy, blethoroplasty, and removal of eyelid tumors.

The Non-Compete Agreement

Dr. Musto signed a non-compete agreement with OptiCare as part of his employment contract and initialed each page to demonstrate he understood the agreement’s obligations and restrictions.  The restrictive covenant stipulated that Dr. Musto be prohibited from engaging in the practice of ophthalmology or ophthalmic surgery for a period of eighteen months following termination with fifteen miles of OptiCare’s Stratford or Bridgeport offices.

OptiCare sued to prevent further violations of the non-compete agreement because of Dr. Musto’s new practice in Fairfield, a location clearly within fifteen miles of the identified OptiCare offices.  The company sought to enjoin him from performing general ophthalmic surgeries at Bridgeport Hospital, also located within the geographical restrictions, but did not ask the court to prevent him from performing the three rare surgeries since he was the only doctor on staff at the hospital with the requisite expertise and knowledge to perform them.  Dr. Musto however argued before the court that the restrictions contained in the agreement were unreasonable and the court should deny OptiCare’s request for their enforcement.

The Court’s Decision

The court held that the non-compete agreement was in fact reasonable and granted OptiCare’s request for its enforcement.  The court granted the request, stating, “Where the context of the covenant not to compete is the sale of the good will of an established business, the courts recognize that enforcement of the covenant is necessary to prevent the seller from depriving the buyer of the value of the transaction”.  When OptiCare acquired Dr. Musto’s professional corporation, it purchased the asset of continued patronage from people who had been patients of that practice, and the court concluded that OptiCare was entitled to protection of this valuable asset.

When determining whether a restrictive covenant is reasonable, the court must determine if it affords more than fair and just protection to the party in whose favor it operates without unduly interfering with public interest.  The eighteen-month duration was deemed reasonable because it was short enough not to cause any unwarranted or extreme hardships on Dr. Musto’s ability to start another practice.  Additionally the court concluded that the fifteen-mile restriction was reasonable because it was not a distance greater than what was necessary to protect the good will asset that OptiCare acquired from Mr. Musto and his partners.

 

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.

Non-Compete Agreement Restrictions in Connecticut Funeral Services Industry

Sagarino v. SCI State Funeral Services, Inc., 2000 Conn. Super. LEXIS 1384
Case Background

Mr. Robert Sagarino’s mother sold the entire amount of stock in Donald D. Sagarino Funeral Home, Inc. to SCI Connecticut Funeral Services, Inc. for $700,000 and an additional $375,000 for the real estate where the business was located. SCI purchased the company with the condition that Mr. Sagarino and other employees execute a five-year employment contract and a fifteen-year non-compete agreement.  Mr. Sagarino signed his agreement on June 15, 1999, wherein he agreed not to operate or work for a funeral home service company for fifteen years within a thirty-mile radius of SCI’s newly acquired Donald D. Sagarino Funeral Home.  As consideration for the restrictive covenant, SCI agreed to pay Mr. Sagarino a total of $65,000 in one hundred twenty installments of $541.67.

Mr. Sagarino was terminated however on July 29, 1999 when he admitted to consuming alcohol while on the job.  In early 2000, Mr. Sagarino opened C.R. Sagarino Funeral Home approximately two miles from SCI’s funeral home.  SCI alleged that he advertised and sought clients from the same community that Douglas D. Sagarino had traditionally served and sued him to prevent further violations of the non-compete agreement executed in connection with the acquisition of Douglas D. Sagarino Funeral Home.

The Defense

Mr. Sagarino however presented a defense that the non-compete agreement was unreasonable and its terms were therefore unenforceable.  The party that challenges the enforceability of a contract ultimately bears the burden of proving to the court that it is unreasonable and unenforceable.  The court found in favor of SCI however, concluding that Mr. Sagarino had indeed breached a valid restrictive covenant and that SCI had successfully shown it suffered irreparable harm from the contractual breach.  A major component of the court’s decision was that the parties executed the agreement at the time of the sale of a business, creating a situation where it added great value to the business.

The Court’s Decision

The court held that the restrictions in the non-compete agreement were adequate to protect the good will purchased by SCI in its acquisition of Donald D. Sagarino Funeral Home and not unreasonable so as to severely disadvantage Mr. Sagarino upon his termination with the company.  The fifteen-year duration was reasonable provided the nature of the funeral services industry.  The customer return frequency in the industry is typically nine years, a timeframe that makes the fifteen-year duration a reasonable restriction for a non-compete between the parties.  The court also held that the thirty-mile geographical restriction was reasonable in light of the funeral services industry and its business trends.

The necessity of a non-compete in this case emanates from the funeral home name having a strong reputation in the local Italian-American community to which it catered its services.  Business in the funeral home industry is highly dependent upon personal relationships and the family name connected with the business operations.  The vast majority of clients are return customers or referrals from previous clients.  The thirty-mile restriction in the non-compete covers the area where Donald D. Sagarino Funeral Home’s clients have historically been located.  The court once again referenced the nature and business trends of the funeral services industry to conclude that the thirty-mile restriction was both reasonable and enforceable.

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 Enforces Non-Compete Agreement for Niche Water Purification Company

KX Industries, L.P. v. Saaski, 1997 Conn. Super. LEXIS 2444
Case Background

Mr. Bruce Saaski worked for KX Industries, L.P., a manufacturer and distributor of solid carbon block water filters, from December 1993 to April 24, 1996, as the company’s Technical Support Manager.  His employment contract with KXI contained several restrictive covenants that prohibited him from using or disclosing confidential and proprietary information without the prior written consent of KXI, maintaining personal copies of the company’s confidential information, or working for an industry competitor.  The “industry competitor” restriction applied for one year after Mr. Saaski’s termination but the covenants pertaining to KXI’s confidential information were indefinite.

Mr. Saaski terminated his employment with KXI and began to work at Water Safety, a direct competitor, shortly thereafter.  Additionally, he failed to return copies of confidential information to KXI’s management upon his termination.  KXI sued Ms. Saaski for violation of the non-compete agreement he signed as part of his employment contract and sought a court injunction to enforce its provisions.  Ms. Saaski presented several arguments to the court as to why the agreement was not valid or enforceable.

The court rejected his assertions however and found in favor of KXI, granting their request for enforcement of the non-compete and confidentiality covenants. Mr. Saaski attacked the non-compete on the basis that its lacked consideration, arguing that there existed a prior employment agreement obligating KXI to employ him for a two-year period.

The Court’s Decision

The court held that Mr. Saaski did not present adequate evidence to prove the existence of a prior employment agreement and pointed to the language of the December 1993 agreement to show that Mr. Saaski gave consideration for the agreement when he agreed to the restrictive covenants contained therein. Furthermore, Mr. Saaski contended that the restrictions were unreasonable because they were overly broad in scope, specifically referring to the prohibition on working for a company “similar to” or in “competition with” KXI.

To determine if this language was in fact overly broad the court heard testimony from KXI’s Chief Executive Officer where he stated that there were only four competitors that the non-compete applied to: Honeywell, Culligan, Multipure, and Water Safety, Mr. Saaski’s new employer.  The court found this to be restricted in scope and not overly broad to disproportionately favor KXI’s interests.  The restriction applied only to a small section of the water purification industry and KXI’s CEO provided a plethora of companies that Mr. Saaski could work for without violating the non-compete agreement.

The court found the overall non-compete and confidentiality covenants to be reasonable and concluded that they did not place excessive restriction on Mr. Saaski’s ability to pursue his occupation and earn a living.  Accordingly, the court found in favor of KXI and enforced the provisions of the non-compete agreement.

 

The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County.  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.

Enforcing a Non-Compete Agreement in the Connecticut Insurance Industry

Grayling Associates, Inc. v. Villota, 2004 Conn. Super. LEXIS 1859
Case Background

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 years 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’s Decision

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.

The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County.  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.

Perpetrator Not “Beamed There By Martians” – Court Upholds Defendant’s Accessory Conviction

Appellate Court of Connecticut: Criminal Law Matter

In a criminal law matter involving a defendant’s accessory conviction, the Appellate Court of Connecticut rejected a defendant’s claim that the State presented insufficient evidence that she participated in a plot to steal nearly a quarter of a million dollars from her employer.

This case involved the February 22, 2005 theft of approximately $248,000 in cash from a bank located in New Britain. The interior of the location has little public access, and employees must first be buzzed into or use their key to access a “mantrap” before proceeding through another door to the employee area. This section of the store contains a bathroom and the safe room, and the only exit is to proceed back through the mantrap.

Case Details

The defendant was a store manager at the bank and was working alone for five and a half hours prior to closing. An hour before leaving the store, she received a phone call from a former district manager (former manager), who had been fired following a previous unsolved robbery at the bank years earlier.

The defendant counted the money in the safe, after which she closed down the store and set the alarm. Approximately thirty minutes later, motion sensors and alarms were rapidly triggered in reverse order from the safe room to the front door. The bank owners called the defendant, who was in the vicinity of the bank, and asked her to allow police into the building. When police arrived, they found no evidence of forced entry, but the money was gone and the defendant did not look or act surprised.

Telephone records revealed that the phone call received by the defendant prior to closing the bank was made from a cell phone in New Britain. She received two more calls from numbers belonging to the former manager: the first from a landline in Manhattan only minutes after the incident; the second twenty minutes thereafter once again from the cell phone, this time placed from the New Haven area.

Arrest Details

The defendant was subsequently arrested for accessory to larceny in the first degree, conspiracy to commit larceny in the first degree, and accessory to burglary in the third degree, in violation of General Statutes §§ 53a-8, 53a-122(a)(2), 53a-48, and 53a-103. The State’s theory of the case was that the defendant knowingly permitted someone to stay behind in the employee area prior to her departure. The defendant argued that one of the employees working earlier that day “could have let someone into the bathroom unbeknownst to [her].” The prosecutor countered that this was unreasonable:

“The idea of somebody sitting in this bathroom for five and one-half hours, waiting for business to close, is as ludicrous as saying that they were beamed there by Martians.”

The defendant was convicted on all counts and appealed, arguing that the State presented insufficient evidence identifying her as a participant, and therefore the jury convicted her “on the basis of mere speculation.”

Jury Details

When a jury considers the facts presented in a case, they are permitted to make reasonable and rational inferences stemming from those facts. “When we infer, we derive a conclusion from proven facts because such considerations as experience, or history, or science have demonstrated that there is a likely correlation between those facts and the conclusion.”

The more strained the correlation, the less reasonable the inference will be. In this case, the Appellate Court admitted that the evidence presented was scant, but still sufficient to support the convictions. The jury could reasonably infer that the defendant was knowingly involved in the scheme to steal the money from the bank, permitting someone to remain behind after she set the alarm and left for the night. Therefore, the Appellate Court affirmed the judgment.

Written by Lindsay E. Raber, Esq.

When faced with a charge of larceny, burglary, conspiracy, or accessory, an individual is best served by consulting with an experienced criminal law practitioner. Should you have any questions regarding criminal defense, please do not hesitate to contact Attorney Joseph C. Maya in the firm’s Westport office in Fairfield County at 203-221-3100 or at JMaya@Mayalaw.com.

Despite Trial Court’s Abuse of Discretion, Defendant Failed to Prove Specific Harm Warranting Reversal

In a recent criminal law matter, the Appellate Court of Connecticut affirmed judgment after a defendant, convicted of DUI, unsuccessfully claimed that his constitutional rights were violated when the trial court arbitrarily denied his motion for a minor continuance.

This case arose from an incident that occurred on November 22, 2003, in Stratford. The defendant crashed his vehicle into an unoccupied parked car, and responding officers noticed visible signs of intoxication. The defendant failed several field sobriety tests and was arrested for operating a motor vehicle while under the influence (OMVUI) of alcohol in violation of General Statutes § 14-227a(a)(1). The defendant wanted a jury trial, and during jury selection, the defendant used up all his peremptory challenges. When Juror T was selected as the alternate, defense counsel challenged him for cause. The reason given was because Juror T’s vehicle had been rear-ended by an intoxicated driver, he had been the passenger of an intoxicated driver, and he managed an alcoholic employee. The court would not excuse Juror T for cause, and defense counsel did not seek any additional peremptory challenges.

Due to a miscommunication, a regular juror did not appear at court on the scheduled trial date. However, because the alternate was present, the court stated that the trial would proceed that afternoon. Defense counsel immediately objected and requested a continuance to the next morning, when the regular juror would be available. The court denied the request “without giving any reason… other than that the alternate juror was selected in the same manner as the regular jurors were selected.” The defendant was convicted of OMVUI and thereafter appealed, arguing that the court abused its discretion when it denied the motion, therefore depriving him of the right to an impartial jury.

Trial courts have wide discretion in deciding whether or not to grant a motion for a continuance. These decisions will not be overturned on appeal unless the appellant shows that the denial of this motion was arbitrary. A reviewing court will consider a number of non-exclusive factors:

[T]he timeliness of the request for continuance; the likely length of the delay; the age and complexity of the case; the granting of other continuances in the past; the impact of delay on the litigants, witnesses, opposing counsel and the court; the perceived legitimacy of the reasons proffered in support of the request; [and] the defendant’s personal responsibility for the timing of the request.

State v. Coney, 266 Conn. 787, 801 (2003). Even if the Appellate Court finds that the trial court acted arbitrarily, it must also determine that the denial was harmful, a burden placed on the appellant. If the denial implicates the violation of a constitutional right, prejudice is presumed. In addition, with respect to alternate jurors, they must have “the same qualifications and be selected in the same manner as regular jurors.” General Statutes § 54-82h(a).

In this case, the Appellate Court considered the factors listed above and came to the conclusion that the trial court’s denial of the motion for a continuance was “unreasonable and arbitrary under the unique circumstances of the case.” However, though the defendant cited a deprivation of his Sixth Amendment protections, he did not cite any case law or provide any analysis in support of his claim. As such, prejudice was not presumed, and the defendant had to show he was harmed by Juror T sitting on the jury. The defendant failed to demonstrate specific harm, and the Appellate Court declined to presume that Juror T was not “an impartial juror under these circumstances.” Therefore, the judgment was affirmed.

When faced with a charge of operating a motor vehicle while intoxicated (a.k.a. driving under the influence) or license suspension, an individual is best served by consulting with an experienced criminal law practitioner. Should you have any questions regarding criminal defense, please do not hesitate to contact Attorney Joseph C. Maya in the firm’s Westport office in Fairfield County at 203-221-3100 or at JMaya@Mayalaw.com.

Written by Lindsay E. Raber, Esq.

Toxicology Report Suppressed in DUI Case Because Warrantless Search Exceptions Did Not Apply

In this criminal law matter, a Superior Court of Connecticut granted a defendant’s motion to suppress evidence, because the State did not show exigent circumstances allowing the warrantless seizure.

This case arose from an incident that occurred on August 15, 2003. The defendant was involved in an automobile accident, resulting in the death of the other driver. He was transported to a nearby hospital where, without a warrant, police requested that his blood be drawn. One of the officers unaware of this order was informed of that the blood had been drawn, so he elected to not perform the field sobriety and chemical alcohol tests. Five days later, police applied for and was granted a warrant for the blood toxicology report. The defendant was charged with operating a motor vehicle while under the influence (OMVUI), in violation of Connecticut General Statutes (CGS) § 14-227a(a), and second-degree manslaughter with a motor vehicle, among several other counts. On March 8, 2004, the defendant submitted a motion to suppress the toxicology report, arguing that they were obtained in violation of the search and seizure protections of the state and federal constitutions.

Under state and federal law, individuals are protected against unreasonable searches and seizures of their persons, houses, papers, and effects. The “[c]ompulsory administration of a blood test” clearly constitutes a search and seizure of one’s person. If a search is conducted without a warrant evidencing probable cause, it is per se unreasonable, and evidence derived from this illegal search will be excluded unless one of a “few specifically established and well-delineated exceptions” applies. Two such exceptions to the exclusionary rule are inevitable discovery and exigent circumstances.

The inevitable discovery exception will thwart suppression of evidence if the State can show, by the preponderance of the evidence (more likely than not), that through lawful means the evidence would have been discovered anyway. Officers must have been actively pursuing such means before the constitutional violation in question occurred. In this case, the State argued that this exception applied because had the officer not been told the blood was drawn, he would have proceeded with the various OMVUI-related tests. Therefore, the State would have inevitably discovered the defendant’s blood alcohol content (BAC). However, the Superior Court was not persuaded, because the State assumed that the defendant would have consented to the alcohol chemical tests. Under CGS § 14-227b, a person is free to refuse the test, though he will face license suspension for doing so. As such, the police could not presume that this procedure would inevitably lead them to discovery of the defendant’s BAC level.

Exigent circumstances doctrine applies where police officers, who have requisite probable cause, do not have time to get a warrant. They must act swiftly to effectuate an arrest, search, or seizure, to avoid, for example, the destruction of evidence. The State bears the burden to point to specific and articulable facts that gave rise to the exigent circumstances. In this case, the State argued that if they did not order that the defendant’s blood be taken, they would have lost evidence of his BAC level. However, the Superior Court noted that the record was devoid of any facts to support this proposition. Therefore, because neither exception applied to the facts of this case, the Superior Court granted the defendant’s motion to suppress.

Written by Lindsay E. Raber, Esq.

When faced with a charge of operating a motor vehicle while intoxicated (a.k.a. driving under the influence) or license suspension, an individual is best served by consulting with an experienced criminal law practitioner. Should you have any questions regarding criminal defense, please do not hesitate to contact Attorney Joseph C. Maya in the firm’s Westport office in Fairfield County at 203-221-3100 or at JMaya@Mayalaw.com.

When is A Non-Compete Geographical Limitation Unreasonable?

In Braman Chemical Enterprise, Inc. v. Barnes, 2006 Conn. Super. LEXIS 3753, Ms. Valerie Barnes worked as an exterminator for Braman Chemical Enterprises, Inc. from November 5, 1990, to April 26, 2006.  On October 24, 1990, in preparation for Ms. Barnes beginning to work, the parties executed a non-compete agreement titled “Restriction Against Other Employment After Termination of Work With Braman Chemical Enterprises, Inc.” where it stated that Ms. Barnes was prohibited from working at any branch of a pest control business within fifty miles of the Hartford City Hall for a period of six months.  The company provided pest control services to commercial and residential customers in approximately ninety percent of Connecticut’s towns and cities.  Ms. Barnes worked the majority of her career with Braman servicing the area defined as east of New Haven, west of Guilford, south of Meriden, and north of the Long Island Sound.  She received training for her operator’s license while employed by Braman but obtained her supervisor’s license on her own time and at her own expense.

On April 26, 2006, Ms. Barnes voluntarily terminated her employment at Braman and formed a Connecticut limited liability company called “Bug One, LLC” based in Hamden that provided substantially identical services as her previous employer.  Braman sued Ms. Barnes in Connecticut state court to enforce the non-compete and enjoin her from further violations of the restrictive covenant’s provisions.  Ms. Barnes asserted that the geographical limitation in the agreement was unreasonable and provided an unnecessary amount of protection for Braman.

The court found Ms. Barnes’ argument to be meritorious and denied Braman’s request to enforce the agreement.  A non-compete agreement is analyzed in its entirety but a single unreasonable provision can be sufficient to invalidate the entire agreement and prevent enforcement.  Connecticut courts have traditionally tended to apply greater scrutiny to a non-compete agreement that creates a general restriction on a geographical area than agreements that focus simply on doing business with the employer’s clients.  Employers are legally allowed to protect themselves in a “reasonably limited market area” but may not overreach to the degree that the restriction prevents the former employee from practicing his or her trade in order to make a living.  While Braman contended that the geographical limitation was reasonably tailored to meet its legitimate business needs, the court held that the provision went well beyond the “fair protection of plaintiff’s [Braman’s] interests”.  The geographical area of fifty miles from Hartford City Hall placed an unreasonable restraint on trade for Ms. Barnes.  The court notes that the prohibited area covered roughly two million potential customers and an area of 7,850 square miles, covering parts of Connecticut, Massachusetts, Rhode Island, and New York.  To put this in perspective, the entire state of Connecticut is only 5,018 square miles.  This area as defined in the non-compete agreement was thus an unreasonable limitation and sufficient cause to invalidate the entire agreement.

The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County.  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.

Breach of Non-Compete in Connecticut Insurance Firm

Breach of Non-Compete in Connecticut Insurance Firm
CUNA Mutual Life Insurance Co. v. Butler, 2007 Conn. Super. LEXIS 1623

Mr. Matthew Butler worked for CUNA Mutual Life Insurance Co. for approximately five years (August 2002 to March 2007) as an Executive Benefits Specialist servicing accounts in Maine, Vermont, Connecticut, Rhode Island, New Hampshire, Massachusetts, and part of New York. CUNA sold insurance-related products to credit unions and Mr. Butler was responsible for marketing and constructing deferred executive compensation programs that involved life insurances, mutual funds, and annuities. CUNA had Mr. Butler agree to and sign a non-compete agreement when it hired him and stipulated that he be prohibited from soliciting or providing services to CUNA clients for a period of two years following his termination from the company. Mr. Butler also agreed to return “all company books, rate books, records, applications, materials, conditional receipts, [and] customer or client lists”.
On March 22, 2007, while still employed by CUNA, Mr. Butler created Elite Capital Management Group to do business as an affiliate of Cambridge Research Investment, with the intent to continue to market and sell insurance-related products. On March 28, 2008, he sent an e-mail to seventy-five of his CUNA clients lauding the prestige, expertise, and quality of the newly formed Elite Capital. He tendered his resignation from CUNA and immediately began to provide the same services at his new firm. He told the court that several clients had contacted him for work because of his March 28 e-mail describing Elite Capital. CUNA sued Mr. Butler in Connecticut state court requesting enforcement of the non-compete agreement.
The court granted CUNA’s request to enforce the restrictive covenant and enjoined Mr. Butler from further soliciting and providing services to CUNA’s current or past clients. This was a proper decision in order to provide the necessary protection for CUNA with regard to its investment in developing good will and positive customer relationships via its employment and occupational enrichment of Mr. Butler. There was clearly a breach of the restrictive covenant in Mr. Butler’s active solicitation of CUNA’s clients during and immediately following his employment at the company. Furthermore, the court held that the restrictions were reasonable in the sense that they “protected CUNA Mutual’s substantial investment in building good will with its clients while permitting Mr. Butler to market to a very large potential group of customers”. The restrictions had a very limited scope (credit unions in the northeast that were customers of CUNA) and did not excessively restrict Mr. Butler’s ability to earn a living. There was no evidence that the agreement would create unreasonable hardships for Mr. Butler since he was still able to market his skills and products to state and federal banks, corporations, non-profits, and other business that were not in the narrow definition of prohibited parties.

Continue Reading