Goodwin's Darryl Woo.

Lawyers are lucky. They're generally not subject to non-compete agreements, thanks to the American Bar Association's model rules on professional conduct.  

But for the rest of the working world, it's a different story. A team from Goodwin Procter led by partner Darryl Woo just scored a key victory in a case that illustrates how sticky non-competes can be.

Woo and local counsel Felhaber Larson in Minneapolis represent Michael Rabern, who was sued by his ex-employer Virtual Radiologic Corp., or vRad, after he quit his job in sales to work for a California-based start-up called Nines Inc.

"Employee mobility fueled the growth of Silicon Valley," noted Woo, who is based in San Francisco. Litigation over the scope and enforceability of non-compete agreements is "a growing area of concern" on all sides, he said. "There's a public policy against non-competes in California, and increasingly, more states are also looking favorably on employee mobility."

Rabern's case is a good example of how these tensions can play out. 

Represented by Dorsey & Whitney, vRad—which is owned by Mednax (2019 revenue $3.5 billion)—sued Rebarn personally in a classic David-and-Goliath matchup.

VRad alleged that Rebarn violated his non-compete agreement, solicited vRad employees and misappropriated confidential information and trade secrets related to teleradiology—the transmission of images such as x-rays, CTs, and MRIs from one location to another for professional diagnostic reading and analysis by a radiologist.

Dorsey partner F. Matthew Ralph did not respond to a request for comment.

The complaint was filed on Feb. 4 in U.S. District Court for the District of Minnesota. The next day, vRad asked U.S. District Judge Patrick Schiltz to issue a temporary restraining order to "prevent Rabern from continuing to violate his contractual and other obligations and to secure vRad's confidential and trade secret information." 

The plaintiffs also wanted to stop Rabern from working for Nines or any other company in the teleradiology industry for a year (during which time, Rabern could … be a barista at Starbucks? Stay home and watch Netflix?)

Woo and Goodwin associates April Sun and Wendell Lin sprang into action to answer the motion.

"The timing was thrust upon us … but in a way, it worked out in our favor," Woo said. 

Treating vRad's motion as a preliminary injunction, the court held an evidentiary hearing on Feb. 25, with oral arguments the following day.

The result? Rabern got a super-speedy ruling that was deeply skeptical of his ex-employer's claims. 

"Here, vRad has neither demonstrated a likelihood of success on the merits nor a threat of irreparable harm," Schlitz wrote.

The judge noted that Rabern's "original employment agreement essentially prohibited him for working for any competitor of vRad anywhere in the world for one year after his employment with vRad terminated."

But before he left vRad, Rabern "negotiated an amendment to his non‐compete (as well as to the customer non‐solicitation provision of his employment agreement) that narrowed the scope of the restrictions." Indeed, his new job offer was contingent on securing such an assurance.

But the amendment was … not the best legal work product. 

"The amendment is poorly drafted, and neither party has proposed an interpretation of the amendment that both makes sense and comports with its text. vRad has had a particularly difficult time explaining the meaning of the amendment, even though vRad drafted it," Schlitz wrote.

According to vRad, Rabern induced the company to agree to the amendment "by lying about the nature of Nines's business," allegedly claiming that his new employer wasn't really a competitor, the judge wrote. 

Rabern, on the other hand, swears he did no such thing.

"Neither side's account is entirely believable," Schlitz wrote. 

But here's the thing. If Nines didn't compete with vRad, then why would Rabern have asked for the non-compete amendment in the first place? If he was going to work as a barista at Starbucks, he wouldn't have bothered. 

"vRad has no credible explanation for why it would agree to amend the non‐compete of an employee who had assured it that nothing that he would be doing would violate the non‐compete," Schlitz wrote. 

That's not all. In a footnote, the judge added that even if he set the fight over the amended agreement aside, "the court has serious concerns about the enforceability of the original non‐compete provision … the non‐compete is drafted very broadly, and almost certainly is more expansive than necessary."

Also, Radern has been working for Nine for six months. During that time, Schlitz wrote, no one claims he's made any sales of teleradiology services. "vRad cannot identify a single customer—existing or prospective—who has given its business to Nines instead of vRad."

Which makes me wonder—why exactly did vRad bring this suit? 

As for the trade secrets claims, Schlitz rejected the allegations out of hand. "Virtually every item of information contained in the screenshots is either freely available on the internet or available for purchase," he wrote. "[T]he court concludes that it is unlikely that vRad will be able to convince a jury that the screenshots qualify as confidential information or trade secrets."