Sigma Chemical Co. v. Harris

586 F. Supp. 704 (E.D. Mo. 1984)

 

RULE:

The test for reasonableness of geographic scope for a restrictive covenant is whether it is no greater than fairly required for protection. There is no requirement that a restrictive covenant have some geographic limit to be valid. The requirement is that the geographic scope be reasonable.

FACTS:

When defendant entered plaintiff's employ, he signed an employment contract containing a restrictive covenant. The covenant prohibited defendant from working for a competitor for two years, worldwide. Defendant subsequently left plaintiff's employ and went into the employ of plaintiff's competitor. Plaintiff filed suit for breach of contract and sought a preliminary injunction barring defendant from rendering services for plaintiff's competitor and from using or disclosing plaintiff's trade secrets or other confidential information. The court granted the injunction.

ISSUE:

Was the restrictive covenant in defendant’s employment contract, which prohibited him from working for the plaintiff’s competitors for two years, worldwide, valid and enforceable?

 

ANSWER:

Yes.

CONCLUSION:

Worldwide application of the restrictive covenant was necessary to protect plaintiff's interests. Both plaintiff and its competitors operated on a worldwide basis. Therefore, the covenant was reasonable in terms of geographic scope and was valid and enforceable.

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