Fenner Precision v. Mearthane Products

U.S. DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
Employment

New York Law Journal

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Judge Charles Siragusa

After 17 years selling elastomeric precision products (EPP) Garrod was hired by Winfield, and subject to a non-compete agreement containing restrictive covenants. Fenner Precision bought Winfield in 2008 and hired its staff, including Garrod. Garrod signed a non-compete agreement—governed by Pennsylvania law—containing confidentiality, non-compete, and non-solicitation provisions. He became EPP Sales Manager before termination in May 2012. He did not sign a severance agreement imposing non-compete, non-disclosure and non-solicitation obligations beyond those in his March 2008 agreement with Fenner. Garrod later accepted a sales position with Fenner's competitor Mearthane. Despite showing irreparable harm under Pennsylvania law, the court denied Fenner a preliminary injunction for Garrod's alleged violation of the confidentiality and non-solicitation provisions. Rather, it found Garrod likely to show that enforcement of the non-solicitation clause is unreasonable. Fenner overstated the extent of goodwill he built up, or knowledge he obtained, while working for it and Winfield. The record showed Garrod had significant contacts with, and knowledge about, EPP makers before employment with Winfield and Fenner.

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