While non-competition agreements can be a very useful tool for employers that want to protect their confidential information and maintain a competitive edge, such agreements are generally disfavored by the courts as a restraint on trade and the ability to earn a livelihood, making their overall enforcement quite difficult. A recent Massachusetts trial court decision, however, breathes new life into the enforceability of non-competition agreements.
In this case, Plaintiff, Inner-Tite, filed a lawsuit against former employee William Brozowski seeking to prevent him from working at one of its competitors in accordance with the non-competition and non-disclosure agreement he had signed. Inner-Tite had required its regional sales managers, including Brozowski, to sign such agreements at the time of hire. The agreement itself specifically prevented sales managers from seeking employment with any competitor for a period of two years after their separation, prevented them from disclosing confidential company information to anyone, and prevented them from soliciting any customers of Inner-Tite. Brozowski left Inner-Tite voluntarily in order to work for a competitor company.
The court initially determined that the non-competition agreement was overly broad and, thus, not reasonable as written; however, the court nonetheless decided to enforce the agreement to the extent it deemed reasonable under the circumstances. Since Brozowski was the sole sales manager in his region, since there were only six sales regions in the United States and since Brozowski worked independently, occupying a position of trust and confidence within the company, the court found that it would be reasonable to prevent Brozowski from working at a competitor within his particular sales region for a period of one year, enforcing the agreement to that extent.
In reaching its decision, the court reasoned that it was in the interest of public policy to preserve businesses, especially in this economic climate. “Requiring reasonable enforcement of non-compete and secrecy agreements preserves legitimate business interests and maintains the expectations of the parties, which helps to sustain a business. This results in economic stability, which is clearly in the public interest.” Inner-Tite Corp. v. Brozowski (Kenton-Walker, J.) (Worcester Superior Court, April 12, 2010).
Although this is only a trial court decision, this case is helpful authority for supporting the business-based reasons behind establishing and enforcing non-competition agreements. The case also serves as a reminder of the importance of carefully drafted, narrowly tailored agreements. Agreements that contain a very limited geographic scope and duration are much more likely to be deemed reasonable and, thus, enforceable.