February 2014

                 

The reality of the litigation world is the vast majority of cases are settled.  That means there is no trial, there is no summary judgment, and there is no ultimate decision by the court that resolves the case.  I had a professor in law school that said a trial was the ultimate failure in the system because good lawyers and rational parties would properly evaluate the risks involved in their respective positions and reach the appropriate settlement.  As high minded as that comment sounded in law school, it is accurate.  Many cases proceed to trial because of a misevaluation by one of the parties.

So what does that mean in the world of non-compete cases? Parties have to define what a “victory” is for them prior to moving forward with a lawsuit or application for temporary restraining order/injunction.  As certain as a party may be that their non-compete or non-solicit is enforceable you can never lose sight of the fact that  initially (the temporary restraining order stage) a single individual (the judge) will be deciding whether that agreement is enforceable based on fairness.  That does not always correspond to what the legally right outcome is.  That first decision will define the rest of the case.

The tricky part in defining what victory is sticking with that definition of victory.  More often than not there is what I would call “scope-creep” where the ultimate objection is blurred and doesn’t resemble what was first discussed.  This is dangerous for  the relationship between lawyer/client. 

So what is a victory in post-employment covenant litigation?  Obviously that depends upon the situation.  The objective can range from full enforcement of the provision, to putting the person out of business, to restricting the area in which they work, to agreeing to a list of customers that the former employee cannot contact.  It is not easy to make a non-compete stick, no matter how well it was written, drafted, or considered. 

Remember that a non-compete agreement is a restraint of trade, and is permitted only by statute or common law.  Employers need to be both reasonable and pragmatic when it comes to enforcement.  You never know what you are going to get at the court house and that judge sees your non-compete agreement for the very first time and is asked to enter a temporary restraining order.