CONTRACT IS TOO BIG…. “Overbroad”

Judges get to have a great deal of fun in non-compete cases. (sarcasm)

They get to hear evidence on how contracts are narrowly tailored to protect the legitimate business interests of the company, and that they are not over broad or too big.

For example.

Company Star City Shower Curtains, sells shower curtains. Only shower curtains. The main brand of shower curtain is manufactured by a company called USA RETAILER INC. In addition to shower curtains, USA RETAILER INC. makes bath mats, toothbrush holders, window curtains, toilet seat covers etc., none of which Star City Shower Curtains sells.

Employee at Star City Shower Curtain spends years selling shower curtains. Her agreement says however, that when she leaves, she can’t work anywhere that sells USA RETAILER INC. Products for 1.5 years.

If Sally Employee leaves Star City and goes to work for WalMart, and Walmart Sells the bathmats made by USA RETAILER INC., is she in breach?

Technically, she is in breach.

The plaintiff company however, has to prove to the Court not only actual breach, but that the agreement at issue was narrowly tailored to protect a legit. business interest, and not over broad. After all, the agreement prohibited Sally employee from selling things the plaintiff company has never sold. Further more, it prohibits her from working anywhere that sells these products, even if she is not involved with that aspect of the business.

So, if I represented Sally, I would ask the court to rule the agreement is over broad, unreasonable and cannot be enforced against Sally. And the judge will have to decide whether the contract is too big – or over broad.

I hope in this made up example, the court would rule the agreement was over broad.

If so, Sally can go work for Walmart and everyone moves on… And that is essentially how we represent employees in these cases. We examine the agreements, and if necessary, ask the court to hold they are over broad. If your agreement is NOT over broad, we will tell you that too.

Lauren Ellerman

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.