Choose your words carefully when using noncompetition agreements

 

Many courts are generally reluctant to enforce noncompetes. And sometimes employers make their tasks even easier.

For example, I read a state appellate court decision last night in which a company tried to enforce a three-year, thirty-mile noncompete against its former nurse practitioner that would prevent her from “provide[ing] services involving the medical field of allergy or immunology.”

Three years and thirty miles sound pretty aggressive, and the trial court agreed that the geography alone was unreasonable. But it also refused to enforce the agreement for another reason when the plaintiff sued to enjoin the defendant from working for another ear, nose, and throat (ENT) doctor. Namely, the plaintiff practiced pediatrics, allergy, and immunology. It was not an ENT specialty. Plus, the defendant’s new employer also specialized in facial plastic surgery. So, there was minimal overlap between the two and, therefore, no legitimate business reason to prevent the defendant from earning a living in her chosen profession.

On appeal, the plaintiff argued that the prohibition involving the “medical field of allergy or immunology” barred the defendant’s employment with the ENT practice because the ENT practice sees and treats patients with allergies.

But here’s where words matter.

The agreement that the plaintiff required the defendant to sign as a condition of employment did not contain terms addressing overlapping care, similar fields, or allergy treatment. Its straightforward language limited the defendant from providing her services “involving the medical field of allergy or immunology.” In other words, the language of the noncompete provision within that agreement applied only to employment with an allergy and immunology practice. And the defendant went to work for an ENT, a medical field different from allergy and immunology.

For example, if the agreement were changed to read, “[defendant] cannot treat allergy patients,” the plaintiff would have had far better leverage to enforce the agreement.

If your company has such agreements with employees that it may seek to enforce, they should be reasonable in time and geography. A lawyer should also draft it to serve the company’s legitimate business interests.