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Federal court edits noncompete pact

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in Employment Law,Human Resources

A federal court in Minnesota has invoked Texas law to rewrite a noncompete agreement that it decided was too broad.

A Minnesota employee of a Texas company went to work for a competitor. Because he had signed a noncompete agreement with his former employer, BMC Software, the company sued to stop the man from working for the competitor.

The case was filed in the Minnesota District of Federal Court. The agreement called for the agreement to be adjudicated under Texas law. The court did so and found the agreement was valid, but limited in impact.

Upon examination, the court found that the noncompete agreement’s geographic restriction was limited. The man worked for BMC as a Midwestern states manager. His new position called for him to push BMC’s competitor’s global initiative. The court found that Texas law limited the geographic area to the area where the man worked for BMC.

So the court decided to “modify the noncompete covenant to reach only his former accounts,” effectively preventing him “from working at [the new company] in any sales or marketing capacity related to BMC’s Midwestern customer accounts for which he was responsible until May 15, 2016.”

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