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Hassler v. Circle C Res.

Hassler v. Circle C Res.

Supreme Court of Wyoming

February 25, 2022, Decided

S-21-0132

Opinion

 [**171]  KAUTZ, Justice.

 [*P1]  Circle C Resources sued its former employee, Charlene Hassler, for breach of a noncompete agreement. Ms. Hassler claimed the agreement was unenforceable and void as against public policy. The district court used the blue pencil rule to modify some of the restrictions in the noncompete agreement to make them reasonable (in the district court's opinion), ruled Ms. Hassler had breached the court-modified agreement, and granted summary judgment to Circle C. We conclude it is no longer tenable for courts to use the blue pencil rule to modify unreasonable noncompete agreements. Because Circle C's noncompete agreement with Ms. Hassler is unreasonable on its face, it is void in violation of public policy. We reverse and remand to the district court for entry of summary judgment in favor of Ms. Hassler.

ISSUE

 [*P2]  Ms. Hassler's initial [***2]  arguments on appeal were primarily that Circle C did not prove her breach of the noncompete agreement was the proximate cause of its damages and the terms of the noncompete agreement were unreasonable, making it void in violation of public policy. We requested supplemental briefing from the parties on the appropriateness of using the blue pencil rule to revise noncompete agreements. In light of the arguments raised in that briefing, we conclude the dispositive issue in this case is whether the district court erred by using the blue pencil rule to modify the unreasonable terms in Circle C's noncompete agreement with Ms. Hassler.

FACTS

 [*P3]  Circle C provides day and residential habilitation services to disabled clients in Natrona and Converse counties. It is also authorized by the Wyoming Department of Health to provide services in Fremont, Weston, Laramie, Johnson, and Campbell counties. Circle C has a day habilitation facility in Casper where clients interact with each other and participate in activities. Circle C also engages employees to provide residential habilitation services to clients in the employees' homes.

 [*P4]  Circle C hired Ms. Hassler, a CNA, on March 17, 2015, to provide residential [***3]  habilitation care in her home in Converse County for one of its long-term adult clients (hereinafter referred to as Client). At the time of her hire, Ms. Hassler signed Circle C's "Confidentiality and Noncompetition Agreement." The noncompete aspect of the agreement was set out in Section 2. Paragraph A of that section stated:

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2022 WY 28 *; 505 P.3d 169 **; 2022 Wyo. LEXIS 28 ***

CHARLENE HASSLER, Appellant (Defendant), v. CIRCLE C RESOURCES, Appellee (Plaintiff).

Prior History:  [***1] Appeal from the District Court of Natrona County. The Honorable Kerri M. Johnson, Judge.

CORE TERMS

blue pencil, noncompete agreement, parties, noncompete, terms, covenant, employees, void, public policy, summary judgment, restrictions, district court, contracts, courts, violate public policy, habilitation, geographic area, unenforceable, compete, geographical, provider, overly broad, arbitration, residential, bargaining, encourages, duration, rewrite, revise, provide a service

Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Questions of Fact & Law, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Judgments, Partial Summary Judgment, Entitlement as Matter of Law, Genuine Disputes, Contracts Law, Contract Interpretation, Intent, Defenses, Public Policy Violations, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Noncompetition & Nondisclosure Agreements, Customers of Former Employer, Governments, Courts, Judicial Precedent