When Enforcing Restrictive Covenants, Timing is Everything
What point in time should a court focus on when assessing whether an employer has legitimate interests to protect?
January 21, 2022 at 10:00 AM
7 minute read
Consider the following fact pattern: In 2006, Acme Sandwich Company hired Jane Doe to make sandwiches at one of its shops in Roseland, New Jersey. At that time, Acme required Jane to sign an employment agreement that contained a restrictive covenant stating that if Jane ever leaves her employment, she cannot work for a competing company within 20 miles of Roseland for a period of one year. Jane was an excellent employee. Five years later, Acme promoted her to regional manager, and five years after that in 2016, to vice president of sandwich innovation. Acme did not ask her to sign a new employment agreement in connection with either promotion. By 2021, Jane felt that she accomplished all she could at Acme and accepted employment with the Wonka Sandwich Company in Newark, New Jersey, as its director of marketing. Acme got wind of her hire and sued Jane in the Chancery Division to enforce the restrictive covenant in her 2006 employment agreement.
Acme, of course, argues that the covenant is reasonable and enforceable because it is necessary to protect Acme's legitimate interests. Acme says that as vice president of sandwich innovation, Jane was privy to Acme's confidential business strategies, marketing plans, and trade secrets concerning its sandwich ingredients. Jane responds that Acme's temporal focus is incorrect. She argues that the restrictive covenant is unenforceable because it did not protect any legitimate interests of Acme in 2006, when she entered into it and was merely a sandwich maker. Who's correct? Jane is. Or at least she should be.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllUnanswered Questions on Remote Work Complicate NJ Wage Transparency Law, Litigators Say
4 minute readJudge Approves $667K Settlement Against Independence Blue Cross for Unpaid, Pre-Shift Computer Work
4 minute readLaw Firms Mentioned
Trending Stories
- 1Does My Company Really Need a Generative AI Policy?
- 2'This Is a Watershed Moment': Daniel's Law Overcomes Major Hurdle
- 3Navigating the Storm: Effective Crisis Management (Part 1)
- 4The Testamentary Exception Does Not Permit a Decedent to Impliedly Waive a Survivor’s Attorney-Client Privilege
- 5Trump 2.0 and Your Career
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250