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N.C. appeals court ruling: Noncompete clause goes too far

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in Employment Law,Human Resources

A staffing company’s noncompete clause restricted a former manager’s option too much, according to a state appeals court.

The case revolved around two nurse-staffing agencies, MSN and Triangle. When MSN hired a manager in 2000, it required her to sign a noncompete agreement that barred her from working for any competitor within 60 miles. The agreement included in the definition of “competitor” any “parent, division, subsidiary, affiliate, predecessor, successor or assign.”

The manager left to work for Triangle in 2005. According to court testimony, the manager attempted to recruit several MSN employees and lured 10 nurses to Triangle. MSN sued for breach of contract and was awarded more than $1.1 million from Triangle and the manager.

The appeals court felt the agreement’s definition was too broad. It agreed the manager violated the agreement, but sent the case back to the lower court to recalculate the damages.

Note: Courts generally don’t like noncompete agreements. Only those that limit competition for a reasonable length of time, geographic area and type of business will stand up in court.

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