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Noncompetition agreements may protect legitimate employer interests such as customer relationships and employee-specific goodwill that are significantly broader than proprietary information such as trade secrets and confidential customer information.
The company hired the worker as a regional vice-president of sales. The worker signed an agreement which prohibited him from working for any business that competed with the company for a period of six months following the end of his employment. The worker left the company and started a partnership with his wife which represented a competitor of the company. The superior court enjoined the worker for working for a competitor for a six-month period pursuant to the terms of a noncompetition agreement. On appeal, the worker argued that the trial court erred by enforcing the agreement, because the agreement did not safeguard a legitimate interest of the employer.
Did the noncompetition agreement safeguard a legitimate interest of the employer?
The court held that noncompetition agreements protected legitimate interests such as customer relationships and employee-specific goodwill that were significantly broader than proprietary information such as trade secrets and confidential customer information. The trial court found that the company had a legitimate protectable interest in proprietary information, and the evidence supported the finding. The appellate court further held that the agreement was not overly restrictive. The appellate court found that the worker claimed hardship based on nothing more than a bald statement that he would be unable to work for six months if the agreement is enforced.