Posts tagged with "voluntary termination"

Connecticut Federal Court Applies Louisiana Law to Enforce Non-Compete to Protect Confidential Information

In United Rentals, Inc. v. Myers, 2003 U.S. Dist. LEXIS 25287, United Rental, Inc. was a Delaware corporation with principal business operations in Connecticut that employed Ms. Charlotte Myers in its Shreveport, Louisiana office from May 20, 2002, to March 7, 2003.  She signed an employment agreement with United Rentals on her first day of work that contained non-compete and confidentiality clauses that prohibited employment for a period of twelve months at any competing company located within one hundred miles of a United Rentals location where she worked.  The restrictive covenants further stated that the state and federal courts in Fairfield County, Connecticut would have jurisdiction in the event that legal proceedings ensued.  Upon her voluntary termination from United Rentals, Ms. Myers began to work at Head & Enquist Equipment, Inc., a competitor, at an office located approximately ten miles away from the United Rentals’ Shreveport office.  United Rentals contacted her to remind her of the restrictive covenants and her obligations under them but she continued her employment with Head & Enquist.  United Rentals sued Ms. Myers in Connecticut federal court for breach of the non-compete and confidentiality agreements and sought a court injunction to enforce their provisions.  The court found in favor of United Rentals and granted its request to enforce the non-compete agreement.

Ms. Myers presented various arguments to the court to persuade it to deny enforcement of the agreement, but the court ultimately found in favor of United Rentals.  She argued that Louisiana law should be controlling in the legal dispute, and further asserted that Louisiana law does not permit “choice of law” clauses in employment agreements.  The court investigated Ms. Myers’ contention and explained that the proper procedure to determine if a “choice of law” clause is permissible is to consult the law of the state being selected, in this case, that of Connecticut.  Connecticut law however cannot be the “choice of law” state when there is another state with a “materially greater interest…in the determination of the particular issue”.  The court held that Louisiana did in fact have a greater interest in the dispute and thus Louisiana law was applicable and controlling for the case.

Although Louisiana law is less than favorable to United Rentals with regard to “choice of law” clauses, it still recognizes that parties are entitled to a remedy in connection with a violation of a confidentiality agreement “if the material sought to be protected is in fact confidential”.  Courts generally view the disclosure of confidential information as sufficient evidence for a company to establish that it would suffer irreparable harm if an injunction were not granted.  During her employment with the company, Ms. Myers was exposed to and had access to United Rentals’ trade secrets, contract details, customer data, financial information, and marketing plans/strategies.  The court held that this was clearly sensitive and confidential information, the content of which entitled United Rentals to protection in the form of a court-ordered injunction.

The court held for United Rentals despite applying Louisiana law in response to Ms. Myers’ justified assertion that this specific “choice of law” provision was not valid.  Although Louisiana law shuns “choice of law” provisions in non-compete agreements, it does support injunctions when it is necessary and proper for a company to protect its confidential business information.

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.

Applying Basic Contract Principles to the Enforcement of Non-Compete Agreements

Applying Basic Contract Principles to the Enforcement of Non-Compete Agreements

North American Outdoor Products, Inc. v. Dawson, 2004 Conn. Super. LEXIS 2677

North American Outdoor Products, Inc. (NAOP) was a company created to facilitate sales of outdoor goods to mass retail merchants. The company marketed products such as instant garages, sporting goods, shelters, and canopies. Mr. Curt Dawson worked for NAOP in its sales and marketing department from February 1999 to April 2, 2004. He worked as the National Sales Manager for a period of time in Florida but returned to work in Connecticut when NAOP agreed in a January 2003 meeting to an annual raise of $25,000.00 and related moving expenses.
In March 2003, management requested that Mr. Dawson sign an Employee Agreement that contained and explained several restrictive covenants that would become effective upon termination. The agreement prohibited him from competing with NAOP for twelve months following termination as well as soliciting any entity that NAOP had transacted with in the three-year period prior to termination. Mr. Dawson signed and returned the employment and non-compete agreement on March 26, 2003 but a representative for the company did not sign the document at that time. A representative for NAOP only signed the document on March 20, 2004 when the company learned of Mr. Dawson’s intent to voluntarily terminate his employment.
NAOP brought legal action against Mr. Dawson and sought an injunctive order from the court to enforce the provisions of the non-compete agreement. Mr. Dawson however presented multiple defenses as to why the restrictive covenants were unenforceable: 1) lack of consideration, 2) unreasonable time and geographical restrictions, 3) unclean hands on the part of NAOP, and 4) lack of necessary signatures. The court found in favor of Mr. Dawson, held that the non-compete agreement was unenforceable, and denied NAOP’s request for injunctive relief.
Under Connecticut law, a non-compete agreement must have sufficient consideration to make the document legally binding upon the parties. For enforcement of a restrictive covenant, the employee must receive something in exchange for his or her covenant. The agreement at hand did not bestow any new benefit upon Mr. Dawson and stated that his continued employment was the consideration for the agreement. Connecticut courts have concluded however that “continued employment is not [sufficient] consideration for a covenant not to compete entered into after the beginning of the employment”. NAOP claimed that the raise and moving expenses promised in January 2003 demonstrated adequate consideration but the court rejected this notion because those promises bore no substantial connection to the written agreement from March 2003.
Furthermore, the court concluded that the covenant not to complete was unenforceable because of inherent ambiguities in its language. Courts cannot create a binding contract in the absence of a meeting of the minds between the parties. The plaintiff, in this case NAOP, bears the burden of proof with respect to demonstrating a meeting of the minds in order to prove its version/interpretation of the alleged contract. The court looked to the plain language of the agreement to ascertain whether it articulated clear and concise provisions that led to a meeting of the minds between Mr. Dawson and NAOP. The court concluded that the agreement was unclear about material details, namely the effective date of the provisions and the identification of the specific parties. The agreement was a bilateral document that required signatures of both parties in order to be complete and become legally binding. The absence of NAOP’s signature at the same time as Mr. Dawson’s thus rendered the agreement unenforceable.
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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Court Enforces Non-Compete Clause Against Real Estate Agent

Court Enforces Non-Compete Clause Against Real Estate Agent
Century 21 Access America v. McGregor-Mclean, 2004 Conn. Super. LEXIS 3239

Century 21 Access America is a national real estate company that employed Ms. Tori McGregor-Mclean as a real estate agent in it Bridgeport, CT office from July 2003 to June 16, 2004. Her employment contract, dated July 7, 2003, contained a non-compete clause that prohibited her for a two-year period following termination from engaging in competing business activities within a fifteen-mile radius of 3850 Main Street, Bridgeport, CT. Ms. McGregor-Mclean voluntarily terminated her employment on June 16, 2004 and began to work for Buyer’s Capitol Real Estate, a company located outside of the fifteen-mile radius in Stamford, CT. Century 21 did not have a problem with her new employment because the office was located outside of the prohibited area but issues arose when Ms. McGregor-Mclean began accepting listings within the fifteen-mile radius. Century 21 sued Ms. McGregor-Mclean in Connecticut state court for violation of the non-compete clause and requested that the court issue an injunction to enforce the agreement.
The court found that Ms. McGregor-Mclean’s activities with her new real estate agency were in fact violations of the non-compete agreement and it ordered that the provisions be enforced. The plain language of the non-compete clause stipulated that Ms. McGregor-Mclean was prohibited from carrying out any direct or indirect competing business activities within the defined fifteen-mile radius. She was in breach of the agreement because she accepted five listings within the prohibited area- it is inconsequential as a matter of law that her office was located outside of the fifteen-mile radius. Under the agreement, she was prohibited from having a physical business presence and transacting individual deals within the defined area. The court identified the unlawful breaches of the non-compete clause, concluded that the agreement was valid and reasonable, and issued an injunction to enjoin Ms. McGregor-Mclean from further violations of the covenant not to compete.
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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Breach and Irreparable Harm Required for Enforcement of Non-Compete Agreement

Breach and Irreparable Harm Required for Enforcement of Non-Compete Agreement
Opticare, P.C. v. Zimmerman, 2008 Conn. Super. LEXIS 759

Opticare, P.C. was a company engaged in the business of offering optometry and ophthalmology services to patients. A sister company, Opticare Eye Health Centers, Inc. was created in 1995 to provide management services to Opticare, operate an ambulatory surgical center, and own/operate retail eye-wear stores. Opticare employed Dr. Neal Zimmerman as an ophthalmologist specializing in vitreoretinal surgery from April 1984 to November 10, 2006. He signed several employment agreements with Opticare during his time as an employee with the company and each one contained a non-compete clause that would become effective upon Dr. Zimmerman’s termination. The restrictive covenant stated that Dr. Zimmerman was prohibited for eighteen months after his termination from offering medical services at a competing company located with a restricted area that was a hexagon ranging from fifteen to thirty miles from where he practice his profession. The non-compete agreements also specified that Dr. Zimmerman was required to provide one year notice of voluntary termination if he intended to continue to practice medicine in the state of Connecticut.
On September 6, 2006, Dr. Zimmerman provided a sixty-day notice of voluntary termination to Opticare’s management and shortly thereafter, five other physicians tendered their resignation from the company. He began providing ophthalmological services on January 2, 2007 at a new office located in Prospect, Connecticut, a mere four miles from Opticare’s office in Waterbury and clearly within the prohibited area according to the non-compete agreement. He testified that approximately 50% of his current patients were former patients of Opticare, his former employer. Opticare sued Dr. Zimmerman for breach of the non-compete agreement and asked the court to grant injunctive relief by enforcing the restrictions enumerated in the agreement.
After weighing the evidence presented by the parties, the court held in favor of Dr. Zimmerman and concluded that the non-compete agreement was not enforceable. Dr. Zimmerman admitted he violated the agreement based on the face value of its terms but raised questions regarding the legality of the covenant and argued that he was not obligated to refrain from further activities at his new practice. The court weighed the evidence to evaluate whether Dr. Zimmerman’s breach of the agreement had any negative impact on Opticare’s business operations or that the company had incurred irreparable harm. It ultimately found that Opticare failed to present sufficient evidence to prove that it experienced either of these detriments and the court noted that Opticare was “still in business and there was no showing that the business is close to ruination or has been permanently harmed in any way”. Breach alone, according to the court, is insufficient to demonstrate that an injunction is necessary. A moving party must demonstrate breach and incurred or imminent irreparable harm in order to be successful with a request for injunctive relief.
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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Court Amends Time Restriction for Engineering Firm Non-Compete Agreement

Court Amends Time Restriction for Engineering Firm Non-Compete Agreement
Maintenance Technologies International, LLC v. Vega, 2006 Conn. Super. LEXIS 136

Maintenance Technologies International, LLC (MTI) was a Milford, Connecticut based company that offered highly specialized engineering maintenance services to clients. The company employed Mr. Daniel Vega as an engineer from February 25, 2002 to October 7, 2005. His responsibilities for this position included conducting vibration analysis, infrared thermography, motor testing, and laser alignment. He signed a covenant not to compete as part of his employment agreement with the company. The restrictive covenant prohibited Mr. Vega, for a period of two years following termination, from engaging in competing business activities within one hundred fifty miles of MTI’s current principal place of business. The agreement further stated that he could not own any stock in a competing business located within one hundred fifty miles of MTI’s principal place of business.
Mr. Vega informed his superiors that he would be voluntarily terminating his employment with the company due to family related issues and his personal ambition to finish his master’s degree in theology. Once he quit MTI however, he began to work for Schultz Electric Co., a competing company with major offices in Connecticut, Maine, Massachusetts, and New Jersey. MTI’s management interpreted this move as a violation of the non-compete agreement executed when Mr. Vega’s employment with the company started and sued him in Connecticut state court. The company requested that the court enforce the provisions of the restrictive covenant in order to prevent any further violations of the agreement. The court found in favor of MTI, granted the company’s request for an injunction, but amended the time restriction to be only one year, instead of the two-year period as stipulated in the agreement.
In reaching its decision, the court assessed whether MTI had a legitimate interest that needed protection and whether the restrictions in the non-compete agreement were reasonable in scope. The court recognized that the company spent a great deal of resources on training its employees and this created a valid interest according to the court. Furthermore, the employees were on the front lines with regard to the business relationships with MTI’s customer and had direct access to proprietary and confidential information. The court held that a company’s employees and customer relationships are its most valuable assets and are worthy of protection under Connecticut law. Injunctive relief, therefore, was reasonably necessary for the fair protection of the employer’s business interests.
Next, the court examined whether the specific restriction contained in the agreement were reasonable in scope. The court held that they amounted to a reasonable and legitimate restriction of Mr. Vega’s ability to work. They provided an adequate amount of protection to MTI while not overreaching and unnecessarily restricting Mr. Vega’s ability to secure future employment. The limitations still allowed many viable career options for Mr. Vega. The court did however slightly amend the time restriction. It was concerned that the full two years could prove to be “somewhat inequitable” and reduced the restriction to one year, instructing the parties that they could submit arguments prior to the expiration of the one year regarding a potential extension to the full two years as stipulated in the covenant not to compete.
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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Three-Year Restriction Found Unreasonable in CPA Non-Compete Agreement

Haims, Buzzeo & Co. v. Wikstrom, 2003 Conn. Super. LEXIS 2539

Ms. Nancy Wikstrom owned a certified public accounting firm, Wikstrom & Company, which she sold to Haims, Buzzeo & Co. (HBC) on January 1, 2001. The purchase agreement outlined the obligations of the respective parties and contained a covenant not to compete. Ms. Wikstrom was to stay on as an employee of HBC, continuing to work as a certified public accountant (CPA) and she agreed to bring her clients’ business to the firm. The non-compete agreement prohibited her, for a period of three years following termination, from soliciting clients and engaging in competing business activities within the city of Stamford, Connecticut. In exchange for these covenants, Ms. Wikstrom was to receive employment, $30,000 monthly payments to begin on January 1, 2010, and compensation for the sale of her former company’s good will and stock.
The merger of the two accounting firms did not go very well and Ms. Wikstrom left HBC in March 2002 due to dramatic differences in business personality and management style. She proceeded to start her own accounting firm, the Wikstrom Group, located in Stamford that provided the same accounting services as HBC. HBC interpreted these actions as clear violations of the non-compete agreement and sued Ms. Wikstrom in Connecticut state court for breach of the restrictive covenant. The company specifically claimed that she had “actively and purposefully tried to induce her former clients to come with her to the new accounting practice she created, and otherwise attempted to hinder and damage the plaintiffs in their practice”. Ms. Wikstrom however claimed that the agreement was unenforceable and that she did not violated any legally binding clauses contained in the purchase and employment agreements.
The court ultimately denied HBC’s request for an injunction preventing further violations of the non-compete agreement and concluded that the agreement was in fact unenforceable. It reached this decision based on several factors: 1) HBS had failed to demonstrate it was likely to succeed on the merits of the case and 2) the company failed to prove that it had incurred irreparable harm because of Ms. Wikstrom’s actions. After examining the facts of the case and the provisions of the non-compete agreement, the court held that injunctive relief was inappropriate and HBC was not entitled to an injunction restraining Ms. Wikstrom’s business actions.
The company was not able to meet the burden of proof required to demonstrate to the court that it was likely to succeed on the merits of the case. Most notably, the court addressed the reasonability and enforceability of the restrictions contained in the restrictive covenant. The geographical limitation was reasonable in scope but this was not true for the three-year time restriction. This, according to the court, was unreasonable because Ms. Wikstrom had been practicing as a CPA for over thirty years, had many long-standing loyal clients, and needed income from her chosen profession to sustain herself. The three-year period was too long, in the opinion of the court, and unnecessarily restricted her business actions and ability to pursue her occupation.
Furthermore, HBC did not demonstrate that it had incurred irreparable harm or that it was likely to do so in the future. The only clients that left HBC where those that were clients of Wikstrom & Company prior to the merger of the two accounting firms. The court noted that those clients would actually be harmed if an injunction was granted and held that its denial was the only way to maintain the status quo between the parties. By denying the request for an injunction, the court permitted HBC and Ms. Wikstrom’s new company to carrying on their business activities as they had been doing the previous eighteen months (since Ms. Wikstrom voluntarily terminated her employment with HBC).
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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Enforcement of a Non-Compete Agreement in the Salon Industry

Enforcement of a Non-Compete Agreement in the Salon Industry
Piscitelli v. Pepe, 2004 Conn. Super. LEXIS 3264

Ms. Francine Piscitelli owned and operated a hairdressing and beauty salon since 1985. She employed Ms. Bernadette Pepe as a stylist from 1990 to July 31, 2004. The salon moved and underwent a change in its trade name in 1997. Ms. Piscitelli had Ms. Pepe sign an Employment Agreement on February 27, 1997 that contained a restrictive covenant. The non-compete agreement prohibited Ms. Pepe for one year following termination from engaging in competing business activities, soliciting the salon’s employees, or soliciting the salon’s current clients. The agreement designated a restricted area for the covenant not to compete: Branford, North Branford, East Haven, Guilford, and the portion of New Haven east of the waterway formed by the Quinnipiac River, New Haven Harbor, and Morris Cove.
Ms. Pepe signed a three-year lease on March 9, 2002 for a premise in North Branford to operate a full-service hair and nail salon. Ms. Piscitelli learned of this in May 2004, confronted Ms. Pepe about the development, and Ms. Pepe confirmed what her boss had been hearing around the salon. Ms. Pepe assured her boss that she would not be soliciting any of the employees or any current clients beyond her own. Ms. Piscitelli was comforted by these assurances and allowed Ms. Pepe to continue to schedule appointments at the salon until she voluntarily terminated her employment on July 31, 2004. In the following months, three stylists left the salon the work for Ms. Pepe at La Bella salon and Ms. Pepe solicited clients of her previous salon regarding the opening of her own salon.
Ms. Piscitelli sued Ms. Pepe in Connecticut state court for breach of the non-compete agreement. Ms. Pepe however contended that the agreement was unenforceable because it: 1) lacked adequate consideration, 2) contained unreasonable restrictions, and 3) there was an adequate remedy at law, thus barring injunctive relief as an appropriate legal solution. The court rejected these defenses, found in favor of Ms. Piscitelli, and granted her request for enforcement of the covenant not to compete.
While the agreement did not increase Ms. Pepe’s compensation, paragraph ten created additional consideration because it obligated the employer, Ms. Piscitelli, to pay for “certain courses in professional education and training”. This benefit, according to the court, was adequate consideration in exchange for Ms. Pepe’s covenants. Furthermore, the court concluded that the covenant not to compete was reasonable with respect to the time and geographical limitations contained therein. The restrictions did not unnecessarily restrict Ms. Pepe’s ability to earn a living or secure future employment within the salon industry. The restriction adequately protected Ms. Piscitelli’s legitimate business interests while not excessively harming Ms. Pepe’s career opportunities. Lastly, the court disagreed with Ms. Pepe that there was an adequate remedy at law available for the case. The court held that Ms. Piscitelli met the burden of proof to show the need for an injunction and concluded that injunctive relief was appropriate for the case.
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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Both Parties Must Sign Non-Compete Agreement To Make It Legally Binding

Both Parties Must Sign Non-Compete Agreement To Make It Legally Binding
Fairfaxx Corp. v. Nickelson, 2000 Conn. Super. LEXIS 2340

Fairfaxx Corporation, a company based in Norwalk, Connecticut, employed Ms. Sarah Nickelson from January 1997 until she voluntarily terminated her employment on November 23, 1998. Fairfaxx provided services for full and part-time employees to clients located in Fairfield and New Haven counties in Connecticut in addition to Putnam and Westchester counties in New York. Ms. Nickelson first worked as a part-time receptionist for Fairfaxx at Aviator in Stratford, then as a temporary employee of Fairfaxx itself, and then hired on a permanent basis as a Personnel Consultant in May 1997. He did not have an employment contract and as such, she was classified as an employee at will. Seven months later, in December 1997, Fairfaxx’s employees, including Ms. Nickelson, were presented with a “Confidentiality and Non Compete Agreement”. There was an understanding that the employees would be terminated should they refuse to sign the restrictive covenant. Ms. Nickelson signed and returned the non-compete agreement on December 9, 1997. The covenant not to compete prohibited Ms. Nickelson from recruiting candidates or soliciting clients in New Haven, Fairfield, Putnam, and Westchester counties for two years following her termination.
Ms. Nickelson moved in November 1998 and was promptly contacted by a recruiter concerning a job at Premier Staffing Solutions, a company in direct competition with Fairfaxx. She was offered a position with Premier and accepted due to the shorter commute and higher commission rate. She ended her employment with Fairfaxx on November 23, 1998 and immediately began to work for Premier. Fairfaxx sued Ms. Nickelson in Connecticut state court for breach of the covenant not to compete and requested that the court enforce the restrictions contained therein. Ms. Nickelson argued that the non-compete agreement was not a valid employment agreement and she was not obligated to abide by its restrictions. The court ultimately found in favor of Ms. Nickelson, invalidated the non-compete agreement, and denied Fairfaxx’s request for injunctive relief.
The court came to this decision because the agreement lacked adequate consideration and the requisite signatures. The non-compete agreement spoke of “mutual promises” but the court concluded that Ms. Nickelson received nothing in exchange for her covenants. She had the same job, same salary, and same benefits after she signed the agreement as before its execution. She was promoted to Manager of the Temporary Division at Fairfaxx in January 1998 but the court found that this was not in any way connected to the non-compete agreement and held that this could not be construed as consideration for the covenants that Ms. Nickelson gave to the company.
Furthermore, the court found that the non-compete agreement was not legally binding because it was only signed by Ms. Nickelson. Fairfaxx noted that it clearly intended to sign the agreement and have its provisions become legally binding but did not actually know if someone from the company’s management had signed the covenant not to compete. The agreement was designed to be a bilateral contract and would not become legally binding until both parties had signed. The agreement contained signature blocks for Ms. Nickelson and Fairfaxx and required both in order for the restrictions/provisions to become effective.
In light of a missing requisite signature and inadequate consideration, the court held that the non-compete agreement was unenforceable and denied Fairfaxx’s request for injunctive relief.
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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Non-Compete Agreements in the New Haven Salon Industry

Non-Compete Agreements in the New Haven Salon Industry
Sabatasso v. Bruno, 2004 Conn. Super. LEXIS 899

Mr. Pascale Sabatasso owned SoHo Hair Group Day Spa where he had provided salon services for over twenty years and employed approximately twenty-two employees. He hired Ms. Jody Brinkmeyer in June 2001, Ms. Jo Bruno in September 2001, and Ms. Cara Hanson in February 2002 to work as stylists. Pursuant to his long-standing employment policies, he had the three women sign non-competition and confidentiality agreements as a condition to their employment. The restrictive covenants prohibited the women for twelve months following termination from rending competing services within ten miles from the center of New Haven, soliciting SoHo clients, or soliciting SoHo employees. This clause created a restricted area that included all or part of New Haven, North Haven, East Haven, West Haven, Hamden, Woodbridge, Orange, and Branford. Ms. Sabatasso justified the need for such a restrictive covenant in order to protect the salon’s investment in the form of the expenses incurred associated with the training, education, and marketing of its stylists.
The three women voluntarily terminated their employment at SoHo on April 26, 2003 and began to work at Designers, a competing salon located in Orange, a city well within the restricted area defined by the non-compete agreement. Mr. Sabatasso’s legal representation sent the women letters on May 15, 2003 stating that he would withdraw legal action if they immediately terminated their employment with Designers. All three did in fact terminate their employment at Designers to pursue other employment options. Ms. Brinkmeyer began to work as a stylist at a salon in Southbury (a city outside of the restricted area), Ms. Hanson lived in Woodbridge but did not work as a stylist, and Ms. Bruno provided styling services out of her home in East Haven and the homes of former SoHo clients, the majority of which were located within the restricted area. Ms. Sabatasso proceeded to sue the three women in Connecticut state court and requested the enforcement of their respective non-compete agreements.
The court granted an injunction with respect to Ms. Bruno but denied the requests for injunctions for Ms. Brinkmeyer and Ms. Hanson. The holding stated that Ms. Bruno “shall adhere to all of the terms and conditions provided for in the agreement for a period of one year from the date of her voluntary termination”. The court found that only Ms. Bruno had breached the non-compete agreement and that the continued activities of Ms. Brinkmeyer and Ms. Hanson were permissible and in accordance with the covenant. The former employees presented several arguments as to why the agreement was unreasonable but the court concluded that its provisions were in fact reasonable and enforceable in the event of a breach, as was the case with Ms. Bruno.
SoHo, according to the court, as a matter of public policy was entitled to protect its proprietary property including its customers for a reasonable period. One year was not so extreme or restrictive and as such, the court found this to be a reasonable restriction. Additionally, the court concluded that the ten-mile restriction was reasonable given the facts of the case and the circumstances of the salon industry in the New Haven area. Seventy-five percent of SoHo’s clients lived within the ten-mile radius and the company had an interest to protect its proprietary property within that area. The court also noted that there were three hundred to four hundred salons located in non-restricted areas within a thirty-minute drive from the women’s homes. Two of the women testified that a thirty-minute drive was acceptable and the court did not believe that this amounted to an unreasonable hardship. This finding demonstrated that the provisions of the non-compete did not overly restrict the women’s ability to pursue their profession or find new employment at a salon that would not violate the 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.

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Court Enforces Non-Compete and Rejects “Ambiguous Language” and “Unreasonable Restrictions” Defenses

Court Enforces Non-Compete and Rejects “Ambiguous Language” and “Unreasonable Restrictions” Defenses
Century 21 Access America v. Lisboa, 2003 Conn. Super. LEXIS 2085

Century 21 Access America was a residential real estate sales company based in Milford, Connecticut that employed Ms. Nereida Lisboa as a salesperson from April 2002 until April 2003. Her employment was contingent upon signing an Independent Contractor Agreement on April 24, 2002 wherein paragraph twelve constituted a non-compete clause. The restrictive covenant prohibited Ms. Lisboa for a period of two years from working at a competing company located within fifteen miles of Milford, Connecticut. Once Ms. Lisboa voluntarily terminated her employment with Century 21, she immediately began to work for William Raveis Real Estate, a direct competitor located directly across the street. Century 21 sued Ms. Lisboa for breach of the non-compete agreement and requested that the court enforce the provisions of the covenant.
Connecticut courts have the authority to exercise equitable power to order a temporary injunction pending final determination of the order, upon the moving party demonstrating that it will incur irreparable harm in the absence of such an injunctive order. The court found that an injunction was warranted and proper in this case and as such, granted Century 21’s request for an injunctive order to restrain Ms. Lisboa from further violations of the covenant not to compete. Ms. Lisboa offered several defenses to invalidate the agreement, including a claim that the language of the agreement was ambiguous and another claim that the provisions were unreasonable. The court ultimately rejected both of these assertions and held in favor of Century 21.
The challenging party bears the burden of proof to show that an agreement is invalid and should not be binding upon the signatory parties. The court found no merit in Ms. Lisboa’s claim that the agreement was ambiguous and that she was not obligated to refrain from any specific business activity. The court stated that “although the covenant is neither a model of clarity or precise craftsmanship, the defendant [Ms. Lisboa] fails to demonstrate how the covenant’s language, in and of itself, is ambiguous”.
The court further dissected Ms. Lisboa’s defenses and shot down her claim that the restrictions were unreasonable. It is well established in Connecticut law that a company has a proprietary right to its clients and is thus entitled to protection for that right. Century 21 had a legitimate business interest worthy of protection based on the fact that Ms. Lisboa could use information gained from Century 21’s client lists and the time she spent with the company to solicit business for herself and her new company to the detriment of Century 21. The company was well within its rights to employ reasonable restrictions to protect this legitimate business interest. Ms. Lisboa’s license to engage in the real estate industry is valid throughout the state of Connecticut and the covenant only restricted her business activities within a relatively small area with a fifteen-mile radius. This, in combination with a limited time restriction, made the court conclude that the geographical restriction was in fact reasonable and enforceable.
The court identified a legitimate business interest that required protection and concluded that the provisions of the covenant not to compete were reasonable, leading it the grant Century 21’s request for injunctive relief in the form of enforcement of 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.

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