Articles Posted in Non-Competition Agreements

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In Everett J. Prescott, Inc. v. Leahy, Maine’s U.S. District Court recently denied Everett J. Prescott, Inc.’s (EJP) motion for a temporary restraining order that would have, among other things, required its former employee to cease working for one of EJP’s competitors.  This case involves a relatively common type of agreement that some employers require their employees to sign—a non-disclosure and non-competition agreement.

Many employers require their employees to sign non-competition agreements because they do not want their employees to have the ability to go work for a competitor and take business away from them.  Similarly, many employers have trade secrets that they do not want employees to share with their competitors.  To protect those secrets, they require their employees to sign non-disclosure agreements which prohibit employees from sharing trade secrets with anyone even after they stop working for the employer.

In this case, EJP asked the court to order that Mr. Leahy could not work for its competitor in any capacity.  EJP wanted the court to enter such an order without even giving Mr. Leahy a chance to respond to EJP’s arguments for why he breached the non-competition and non-disclosure agreement between him and EJP.  The court denied EJP’s motion because, among other reasons, the non-competition agreement Mr. Leahy allegedly entered into did not say that he could not work for an EJP competitor in any capacity—it only said that he could not work for an EJP competitor “in the same or similar capacity or function to that in which” he worked for EJP.