Eastern District of Virginia Rejects Non-Duties-Based Non-Compete
In a memorandum opinion issued on April 15, 2008, the Eastern District of Virginia rejected a non-duties-based non-compete as facially overbroad under Virginia law. The case is Nortec Communications, Inc. v. Carl Lee-Llacer (Case No. 1:08cv127).
The two-part non-compete prohibited Lee-Llacer, a former Nortec information technology consultant, from becoming employed by or performing services for any existing Nortec client for whom he had provided services while employed with Nortec if such employment or services "relates to the products or services offered by" Nortec for twelve months following the termination of his employment with Nortec. It also prohibited him during that time from engaging in any business in direct competition with Nortec in Maryland, Virginia, or the District of Columbia.
In dismissing the non-compete claim, Judge Lee focused on the failure to limit the non-compete to the same work that Lee-Llacer performed for Nortec. In so doing, Judge Lee noted that the non-compete prohibited Lee-Llacer from working for an existing Nortec client to the extent the employment relates to products or services offered by Nortec, however, there was no regard for whether Lee-Llacer's employment with the client involves the use of any skills or knowledge gained through his prior work for Nortec or whether the employment relates to a product or service Nortec offers to that client.
Judge Lee also dismissed the client non-solicitation claim on the basis that it contained certain ambiguous phrases, such as "urge or suggest," "solicit, encourage or induce," and "interfere with or disrupt," which made it similarly overbroad.
This decision is consistent with other recent cases suggesting a trend towards greater judicial focus on the need to demonstrate direct employee access to confidential information and clients in enforcing non-competes.
The two-part non-compete prohibited Lee-Llacer, a former Nortec information technology consultant, from becoming employed by or performing services for any existing Nortec client for whom he had provided services while employed with Nortec if such employment or services "relates to the products or services offered by" Nortec for twelve months following the termination of his employment with Nortec. It also prohibited him during that time from engaging in any business in direct competition with Nortec in Maryland, Virginia, or the District of Columbia.
In dismissing the non-compete claim, Judge Lee focused on the failure to limit the non-compete to the same work that Lee-Llacer performed for Nortec. In so doing, Judge Lee noted that the non-compete prohibited Lee-Llacer from working for an existing Nortec client to the extent the employment relates to products or services offered by Nortec, however, there was no regard for whether Lee-Llacer's employment with the client involves the use of any skills or knowledge gained through his prior work for Nortec or whether the employment relates to a product or service Nortec offers to that client.
Judge Lee also dismissed the client non-solicitation claim on the basis that it contained certain ambiguous phrases, such as "urge or suggest," "solicit, encourage or induce," and "interfere with or disrupt," which made it similarly overbroad.
This decision is consistent with other recent cases suggesting a trend towards greater judicial focus on the need to demonstrate direct employee access to confidential information and clients in enforcing non-competes.
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