COMMERCIAL LAW: Covenants Not to Compete for 18 Months Not Enforceable

CASE:  Creative Dimensions Inc. v. Laberge

COURT:  New Haven J.D., at New Haven

DOC. No.: CV11-6020991-COURT OPINION BY:  Robinson, J.

DATE:  May 31, 2012-PAGES:  12

When ruling on the enforceability of a contract not to compete, courts may consider; 1.) the length of the restriction; 2.) the geographical area; 3.) the fairness of protection to the employer; 4.) the extent of the restraint on workers’ opportunities to pursue occupations; and 5.) the extent of interference with the public’s interests.  In 2005, the plaintiff, Creative Dimensions Inc., purchased Convergence Exhibits, which was owned by the defendants, William Miler and Adam LaBerge.  Creative Dimensions hired the defendants as employees, and they signed agreements not to compete.  In 2009, the defendants went to work at a competitor, ABC Sign.  Allegedly, one of the defendants took with him a cell phone that Creative Dimensions had purchased and that contained client information.  The plaintiff sued the defendants and sought to enforce the agreements not to compete.  The agreements provided, “for a period of eighteen (18) months following the termination of …employment for any reason, [the defendant] will not engage in any activity that is or is intended to be, directly or indirectly competitive with those aspects of the Company business with the Company; and [the defendant] will not call upon, solicit, divert or take any customers, business or prospective customers of the Company or any of its suppliers.”  The court found that the time and the geographical restrictions were reasonable.  Between 2005 and 2009, Miller and Laberge were the only workers who were asked to sign restrictive covenants.  Creative Dimensions regularly outsourced work to competitors, and it did not ask them to sign restrictive covenants not to compete or to solicit.  If the court enforced the prohibition against the defendants working with or soliciting current or prospective customers of Creative Dimensions, this would not protect the plaintiff, because other competitors posses access to the same information as the defendants.  Training that the plaintiff provided to the defendants did not furnish them with specialized information that is not readily available to others in the field.  The court concluded the agreements not to compete or to solicit were not enforceable.