|By PR Newswire||
|March 19, 2014 10:02 AM EDT||
RICHMOND, Va., March 19, 2014 /PRNewswire/ -- A federal district court in Miami recently issued a preliminary injunction in a non-compete case involving a narrowly tailored restriction under Virginia law. The ruling enjoining the continued employment of a former employee offers guidance to companies that hire employees subject to narrowly drawn non-compete agreements, according to Steven D. Brown, a Richmond-based shareholder in national law firm LeClairRyan.
On March 13, U.S. District Court Judge Marcia G. Cooke issued a preliminary injunction sought by Corning MobileAccess, Inc. (CMA), which filed suit against its former sales manager Cindy Torres and her current employer, Reach Holdings LLC d/b/a SOLiD Technologies ("SOLiD"), alleging breach of contract (non-competition and confidentiality covenants), misappropriation of trade secrets and other claims. CMA is headquartered in Herndon, Va.; and Torres lives in the Miami area. Judge Cooke considered Virginia law in her ruling in Corning Mobile Access, Inc. v. Cindy Torres et al (13-24463-Civ-COOKE, U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA).
"Judge Cooke's opinion in this case strengthens the ability of companies to enforce narrowly tailored covenants not to compete at the preliminary injunction stage," said Brown, who represents CMA and focuses his practice on labor, employment and business issues.
The preliminary injunction means that Torres will be unable to work for SOLiD from March 13 until the earlier of December 31 or until the final disposition of this matter, whichever occurs first. Further, the defendants are enjoined from using CMA's proprietary and confidential information and from directly or indirectly contracting with, soliciting, or otherwise doing business with CMA's customers and prospective customers where such business may have been obtained by the improper use of CMA's trade secrets or proprietary or confidential information until the earlier of December 31 or until the final disposition of the case. The preliminary injunction order also requires Torres to disclose any CMA trade secrets she allegedly improperly accessed and also to disclose to whom they were distributed.
CMA is engaged nationally in the business of developing, marketing, distributing, installing and supporting converged wireless indoor networks that support multiple wireless voice and data services, also known as Distributed Antenna Systems, or DAS. Reach Holdings LLC engages in business under the name SOLiD Technologies and is one of seven companies nationally in the DAS industry.
In 2009, Torres signed an employment agreement with CMA that included a confidentiality clause and a non-compete provision that specifically enjoined her from working with SOLiD and other named direct competitors for a period of 12 months after the date that she ceased working with CMA for any reason other than termination by the company without cause. During her employment with CMA, Torres was provided with extensive confidential client and pricing lists, and other sensitive, trade-secret protected and highly valuable information.
The lawsuit against Torres and her employer arose after she left the company around November 8, 2013, having accepted employment as SOLiD's director of carrier accounts on October 31, 2013.
Under Virginia law, a non-compete agreement "is enforceable if it 'is narrowly drawn to protect the employer's legitimate business interest, is not unduly burdensome on the employee's ability to earn a living, and is not against public policy'" noted Judge Cooke's opinion. "CMA's restrictive covenant is not unduly harsh or oppressive to Ms. Torres insofar that it does not prohibit or preclude Ms. Torres from finding employment in her field."
"Companies that hire employees should be very diligent in determining whether the employee is bound by a valid restrictive covenant (non-compete or non-solicitation agreement) and also whether the applicant has accessed or taken proprietary or confidential information from the former employer," said Brown. "Employers that are careful during the interview process can save themselves thousands of dollars by eliciting detailed information about the applicant's conduct while working for the soon-to-be former employer. In this digital age, many employees download information from company computers without permission to do so. Many employees are under the mistaken belief that the work product they prepared for a current or former employer is actually their personal data that can be taken to a new job."
As a trusted advisor, LeClairRyan provides business counsel and client representation in corporate law and litigation. In this role, the firm applies its knowledge, insight and skill to help clients achieve their business objectives while managing and minimizing their legal risks, difficulties and expenses. With offices in California, Colorado, Connecticut, Maryland, Massachusetts, Michigan, New Jersey, New York, Pennsylvania, Virginia and Washington, D.C., the firm has approximately 350 attorneys representing a wide variety of clients throughout the nation. For more information about LeClairRyan, visit www.leclairryan.com.