Update (November 4, 2014): The case described below was recently settled apparently with the help of U.S. Mag. Judge Jeffrey J. Keyes (D. Minn.) at a settlement conference and the case is dismissed.
Update (April 16, 2014): Greenspring Media, the owners of Minnesota Monthly, tried and failed to stop a former employee, Thomas Gavaras, from working for a competitor based on a weak and unenforceable non-compete agreement, as discussed below in a Minnesota Litigator post from January.
Plaintiff Greenspring lost but, more recently, Plaintiff asked the Court (U.S. District Court Judge Ann D. Montgomery (D. Minn.)) if the Court would pretend Greenspring won pending its appeal of her adverse judgment. (That is, they asked that the Court “preserve the status quo” and bar Mr. Gavaras from taking his new job because otherwise, they argued, Minnesota Monthly would suffer “irreparable harm.”) Yeah. No. Not going to happen.
Original post (January 15, 2014) (under subject line: Minnesota Monthly Seeks (And Fails) to Squelch Competition): In her recent decision tossing out a non-compete agreement as vague and overbroad, U.S. District Court Judge Ann D. Montgomery (D. Minn.) pointed out the following:
The Minnesota Supreme Court explained that an employee is selling his labor and in certain circumstances “cannot well afford to raise any objection to any of the terms in the contract of employment offered him, so long as the wages are acceptable.” For this reason, restrictive covenants are viewed with disfavor.
“The simple reality of this case is the Noncompete Agreement [the employee] signed seventeen years ago is unclear, vague, overly broad and incomplete.”
“[T]he Noncompete Agreement has a fundamental flaw. Its enforceability is explicitly contingent on ‘the terms of [MN Monthly’s] written employment agreement’ with [Plaintiff, its employee]. But no such agreement exists.”
Also, “[t]he Noncompete Agreement has a blank next to the word ‘effective’ that is not filled in. Assuming this refers to a written agreement, a written agreement without an effective date is evidence that no written agreement exists.”
Also, “there is no geographic limitation in the Noncompete Agreement, which makes it potentially very broad.” And, the “job description…is impermissibly generic and broad [for] noncompetition purposes…”
From the perspective of a lawyer who works on behalf of clients in claims against lawyers for malpractice, I have to stop and wonder whether the employer paid some lawyer or law firm money for the non-compete seventeen years ago only to find that it was ultimately unenforceable when put to the test. If so, could this have been malpractice? If so, when would the statute of limitations have begun?
This is idle wondering. I offer no opinion as to the answers. Having said that, I would not expect this to be an overwhelmingly strong legal malpractice case. On the other hand, this is one of the many cases showing that consumers of legal services need to understand that hiring a specialist in a particular practice area might cost more up front but might be many times more valuable at a later time. The Minnesota employment law bar is full of talent — whether on the employer side or the employee side.
A word of advice (not legal advice, per se): Don’t just google “non-compete,” cobble something together, and think you’re saving money by not hiring a lawyer. And don’t go to a lawyer who tells you that the lawyer is not an employment lawyer but he or she is “a quick study” who can dig something up for a few hundred dollars (also known as “advanced googling”?). If you are looking for a robust noncompete, particularly for a Minnesota business, go to a Minnesota employment lawyer. Such a qualified person could help you out at very little cost. If you call me, I would be glad to pass on a name of one or two or three at no cost (and getting no referral fee or payment of any kind).