Date of Notice: 04/05
Policy Type COMMERCI
Producer Name ANNETTE
AGENCY INC
Producer Telephone # 305-625-
Producer Code: 70927
WITHDRAW
RETAIN THIS NOTICE FOR YOUR REO
Term
Notice Date
17/2018
04/05/2018
Producer Name and Phone Number
WILLIS INSURANCE AGENCY INC
27TH AVENUE
ENS FL 33056
2
URANCE
mpany of Florida
TER, MA 01570
MAPER
urar
APR 09 2018
"NCY INC
Sureweabeer
754
Part 6: Terminating Employment
in the future is too remote to justify injunctive relief. If
NanoMech is able to bring a valid claim for breach of
contract against Suresh in the future, injunctive relief
may then be warranted. Until then, however, the Court
will deny without prejudice NanoMech's request for
permanent injunction for failure to state a claim. ***
Information” provision of the Employment Agreement,
the legal requirements for the issuance of a permanent
injunction are: (1) a threat of irreparable harm, (2) that
the harm outweighs any injury which granting the in-
junction would inflict on other parties, (3) a likelihood
of success on the merits, and (4) that the public interest
favors the injunction.
First, the Court does not find that Nano Mech
has made a showing of irreparable harm. Suresh is
no longer employed by BASF and has, in fact, filed
a counterclaim against NanoMech in these proceed-
ings, in which she maintains she was fired from BASF
because of NanoMech's acts taken during the course
of this lawsuit. Second, NanoMech alleges no facts
that state that Suresh has actually disseminated or
misappropriated NanoMech's confidential or propri-
etary information. .
The Court finds that, to the extent NanoMech re-
quests a permanent injunction barring Suresh's future
dissemination of proprietary information to a potential
employer, the threat of irreparable harm occasioned by
a future breach of contract does not justify injunctive
relief. *** The Court is not convinced that
or threatened disclosure of confidential information
occurred, and therefore, the possibility of its occurrence
* * *
CASE QUESTIONS
1. What were the legal issues in this case? What did the
court decide?
2. What did the Nondisclosure Agreement (NDA) call
for? Why did the former employer claim that the
agreement was breached by the former employee?
Why does the court disagree?
3. What did the Noncompetition Agreement call for?
Why does the court conclude that this agreement is
unenforceable?
4. This decision mentions in passing that the former
employee was terminated by her new employer and
is suing Nanomech for this. What do you think
happened here? How does the existence of restric-
tive covenants complicate post-employment life
for both the former employee and prospective new
employers?
5. What should Nanomech have done differently?
any actual
Courts consider a number of factors when deciding whether to enforce noncompeti-
tion agreements (by issuing injunctions against former employees or awarding damages
for breach of contract), and their willingness to do so varies considerably across states.
California's courts have been especially prone to invalidating noncompetition agree-
ments.76 As with any other contracts, restrictive covenants must be supported by consid-
eration. For newly hired employees, being allowed to commence employment appears to
be sufficient. But to impose noncompetition agreements on existing employees, some ad-
ditional benefit beyond continuation of employment is likely needed. "1 Courts regularly
state that noncompetition agreements are disfavored as restraints on trade, and they will
be enforced only if former employers can bear the burden of show
is no greater than necessary to protect login
for the agreemi
LIST
Chapter 19: Downsizing and Post Termination Issues 753
pany:
thus are
Marshalltown defines "competitor" as "any company
in the trowel industry that is in competition with
Marshalltown for sales in the United States, regard-
less of where that company is located" Marshalltown
suggests that the use of the word "competitor" in its
agreement with Bendinger supplies a sufficient geo-
graphic restriction which this court should uphold,
but that term as Marshalltown wishes to define it is
not contained in the covenant, and we are unable to
rewrite the restrictive covenant to supply it.***
imposed.
of two years following her separation from the com-
covenant not to compete with Nano Mech for a period
: In general, covenants not to compete in employ-
ment contracts are disfavored under Arkansas law and
nected with a sale of business. In order for a non-com-
subject to stricter scrutiny than those con-
be met: (1) the covenantee must have a valid interest
pete agreement to be valid, three requirements must
to protect, (2) the geographical restriction must not be
overly broad, and (3) a reasonable time limit must be
pete that is embedded in the Employment Agreement
fails to include a geographic restriction and instead
NanoMech concedes that the covenant not to com-
prohibits Suresh from working anywhere for a
s that competes with Nano Mech. Nevertheless,
NanoMech maintains that under Arkansas law, non-
compete agreements that lack geographic restrictions
are still enforceable. In support of this contention,
NanoMech cites to Girard v. Rebsamen Insurance Com-
pany, a case in which the Arkansas Court of Appeals
insurance salesman from soliciting or accepting busi-
any busi-
ness
held that a non-compete agreement that prohibited an
from customers whose accounts he serviced at
the time of his termination was reasonable under the
circumstances, even though the covenant contained no
Using the same reasoning ..., this Court finds the
phrase “any business which competes” in NanoMech's
Employment Agreement to be vague and undefined.
NanoMech's Agreement does not supply a sufficient
geographic restriction for the non-compete clause, and
the Court lacks the authority to rewrite the covenant
to clarify whether BASF-or
any
other
company,
for
that matter-would meet NanoMech's definition of a
“business which competes” against Nano Mech. Nano-
Mech's covenant is so overbroad that it cannot even be
interpreted to mean that it has a nationwide limitation.
Indeed, Nano Mech goes so far as to suggest in its brief
to the Court that the covenant not to compete could be
enforced against Suresh “around the globe," and that
“[a]ny geographic restriction within a non-compete
agreement with the Defendant would not sufficiently
protect NanoMech’s intellectual property.
NanoMech's covenant not to compete is unreason-
able and contrary to public policy because it prevents
Suresh from working anywhere for a two-year period
for an undefined set of “competitors” of NanoMech.
[T]his Court finds that the phrase "any business which
competes” to be unenforceable, and no cause of action
exists for a breach of an unenforceable contract. This
claim will be dismissed with prejudice.
geographic limitation.
The Girard case does not apply here, as it is an
exceptional, fact-driven case in which a non-compete
agreement without a geographic restriction was
deemed enforceable. The Arkansas Supreme Court
discussed the implications of Girard and noted that,
despite the lack of geographic restrictions in Girard's
non-compete agreement, it still permitted him to ac-
cept business from 95% of the overall insurance mar-
ket and 80% of the customers of his former employer's
office. The covenant did not, therefore, unreasonably
restrict Girard's ability to work and make a living in a
Particular industry or across a geographic area. Instead,
the covenant's restrictions were customer-specific.
Nano Mech's covenant not to compete is more like
the covenant in the case of Bendinger v. Marshalltown
C. Permanent Injunction
NanoMech requests a permanent injunction “bar-
ring Suresh from employment with BASF for the re-
mainder of the term of the non-compete provision
within the Employment Agreement, and enjoining her
from disclosing any of NanoMech's confidential infor-
mation.” As discussed previously, the covenant not to
compete contained in the Employment Agreement is
unenforceable, so the Court will not issue an injunction
to enforce the terms of the covenant. With regard to
Nano Mech's request for an injunction barring Suresh's
disclosure of NanoMech's confidential information,
either pursuant to the NDA or the “Confidential
ever
, unlike Girard, the covenant in Bendinger was not
Trowell Co., which the Arkansas Supreme Court found
to be unenforceable. Like Girard, the covenant in
| Bendinger contained no geographic restriction; how-
customer-specific but instead prohibited Bendinger
from working for any company that his former em-
ployer considered a “competitor.”
court opined:
30
SURA
m
6
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752
Part 6: Terminating Employment
Company Florid
EBSTER
W-6-5
eins
*
Suresh was hired by Nano Mech. * None of the
pleadings submitted in this case describe exactly what
information was shared with Suresh during that lim-
period of time when she was engaged in pre-em-
ited
ployment talks with Nano Mech. Instead, the amended
complaint states thtype of information Suresh was
exposed to during her employment with NanoMech,
including research and development of nano-parti-
cle-based products, nano-integrated materials, and
specific manufacturing processes. Nevertheless, for
the purpose of evaluating Suresh's motion for judg-
ment on the pleadings, the Court will assume that
Suresh acquired confidential, proprietary, or trade se-
cret information about NanoMech and its particular
products during the five-day pre-employment period
covered by the NDA.
According to the plain language of the NDA, which
in the Court's view appears to be a valid and binding
contract, it expired three years after March 22, 2010,
the last possible day that pre-employment disclosures
could have been made to Suresh before she was hired by
NanoMech. Therefore, the NDA expired on March 22,
2013 and is no longer in force. Suresh... began work
for BASF, NanoMech's alleged competitor, in January of
2013 and was terminated on June 3, 2013. Therefore,
the NDA was applicable to Suresh's employment with
BASF from January of 2013 to March 22, 2013.
Turning now to the issue of whether NanoMech
has stated a valid claim for a breach of the NDA, the
elements of a breach of contract claim under Arkan-
sas law are (1) the existence of a valid and enforceable
contract, (2) an obligation on the part of the defen-
dant, (3) a breach of that obligation, and (4) dam-
ages resulting from the breach. In considering these
elements, the Court finds that NanoMech has stated
sufficient facts to satisfy the first two. As for the third
element, which requires a showing that a breach of
a legal obligation occurred, NanoMech alleges that
Suresh (1) made “hundreds of copies” of unspecified
Nano Mech documents, presumably with a photo-
copying machine, and (2) emailed certain confiden-
tial, proprietary documents concerning formulations
and testing results Because NanoMech does not
plead facts to show that Suresh actually misused, di-
vulged, or otherwise misappropriated confidential
information covered under the NDA, Nano Mech is
reduced to arguing that Suresh “will inevitably dis-
close (to BASF) Nano Mech's confidential, proprietary
or trade secret information based on the nature of her
work in the field of chemistry?'
"In general, damages recoverable for breach of con-
tract are those damages which would place the injured
party in the same position as if the contract had not
been breached.” “Although recovery will not be denied
merely because the amount of damages is hard to de-
termine, damages must not be left to speculation and
conjecture.” Here, NanoMech does not contend that
it has suffered any losses attributable to Suresh's al-
leged breach of the NDA. *** * However, Nano Mech
attempts to salvage its claim by arguing that pursuant
to the “inevitable-disclosure doctrine"
this Court
should find it sufficient for pleading purposes that
Suresh's job as a chemist for NanoMech's competitor
made it “inevitable” that she would disclose Nano-
Mech's confidential information in the course of her
new employment.
As a preliminary matter, the Eighth Circuit has nei-
ther accepted nor rejected the inevitable-disclosure
doctrine, and the Arkansas Supreme Court has only
theoretically approved of the doctrine's use in the lim-
ited context of issuing temporary, emergency relief for
certain violations of the Arkansas Trade Secrets Act.
The Trade Secrets Act may be violated through either
an actual or threatened misappropriation.
A search of the relevant case law reveals that there
is no precedent for applying the inevitable-disclosure
doctrine as NanoMech describes: to infer or impute po-
tential losses in a breach-of-contract action. The doc-
trine has only been applied in Trade Secrets Act cases,
particularly where plaintiffs have alleged the "threat-
ened misappropriation of trade secrets," a discrete vio-
lation of the Act that is inherently speculative in nature.
By contrast, NanoMech asks the Court to assume
that Suresh must have misused confidential informa-
tion because she emailed certain documents to her per-
sonal email account and at some point went to work for
NanoMech's competitor. These facts, as alleged, are in-
sufficient to show that an actual loss or damage flowed
from Suresh's breach.
Therefore, Nano Mech's claim for breach of the NDA
will be dismissed for failure to state sufficient facts to
show that the breach resulted in damages. Dismissal
will be without prejudice to NanoMech's right to bring
a future, non-speculative claim for a breach of the NDA
if facts supporting such a claim materialize prior to the
expiration of the statute of limitations.
* * *
* *
B. Breach of Non-Compete Agreement
NanoMech alleges that Suresh breached a clause
in her Employment Agreement
that contained a
sizing
and Post-Termination Issues
751
OPINION BY DISTRICT JUDGE
Nanomech v. Suresh
2013 U.S. Dist. LEXIS 128213 (W.D.Ark.)
pursue higher education for the next two to four years,
(Prior to Suresh's departure, it was discovered that
she had forwarded several emails from her Nano Mech
email account to a personal email account" These
emails allegedly contained "Nano Mech's confidential,
proprietary and trade secret information,
In October of 2012, a member of Nano Mechs
products
("NanoMech") that its former employee, Plaintiff Aru-
This lawsuit concerns the claim of Nano Mech, Inc.
na Suresh, violated the terms of a Non-Disclosure
Agreement (NUA") and a covenant not to compete
Mech is an Ar ansas-based research and development
contained within her Employment Agreement. Nano-
company that specializes in creating nano-technology
The amended complaint alleges that Suresh entered
into an NDA with NanoMech on March 18, 2010,
ment relationship with Nano Mech. During these pre-
employment talks, Suresh received certain proprietary
and confidential information relating to NanoMech's
materials, processes and their applications, and related
business plans and strategies. Under the terms of the
NDA, Suresh was required to hold “in trust and confi-
dence” these pre-employment disclosures for a period
>)
of three years after the disclosures were made..
Nano Mech ultimately hired Suresh on March 22,
2010, just four days after she signed the NDA. As a
condition of her employment as a Product Engineer/
Tribologist with NanoMech, Suresh executed an Em-
ployment Agreement on April 5, 2010. The Employ-
ment Agreement contained a covenant not to compete
that stated that for a period of two years after the
termination of Suresh's employment, she could not
"directly or indirectly enter into, be employed by or
consult in any business which competes with the Com-
pany.” The Employment Agreement did not define
what it meant to “compete with the Company," nor did
it restrict the covenant's application to any particular
geographical area.
As a Product Engineer for NanoMech, Suresh
was privy to NanoMech's confidential and proprietary
management team learned that Suresh was not pur-
suing higher education and was instead looking for a
job “in a field of technology occupied by Nano Mech”
Nano Mech sent Suresh a letter reminding her of her
obligations pursuant to the NDA and covenant not to
compete. Nano Mech later discovered after searching
the internet that Suresh had accepted a job as an Ap-
plication Chemist with a company called BASF North
America (“BASF”), beginning in January 2013. The
amended complaint describes BASF as a worldwide
chemical company whose portfolio of products in-
cludes, among other things, equipment and engine lu-
bricants that compete directly with Nano Mech's nGlide
products, which are the subjects of a pending patent
application ...
The claims for relief made in the amended com-
plaint are premised on Nano Mech's assumption that,
in the course of Suresh's employment as an Applica-
tion Chemist with BASF, she “will inevitably disclose
to BASF, if she has not already," the formulation and
testing of the nGlide products. [T]here are three claims
for relief in the amended complaint. The first two are
for breach of contract due to Suresh's alleged viola-
tions of the NDA and the Employment Agreement's
covenant not to compete. The last claim is for a per-
manent injunction barring Suresh from disclosing any
of Nano Mech's confidential information and "from
employment with BASF for the remainder of the term
of the non-compete provision within the Employment
Agreement”
* * *
product concepts and prototypes, as well as research-
related reports prepared in order to attract funding for
Nano Mech's suite of patent-pending nano-lubrication
products. Suresh also had insight into the chemistries,
methodologies, and formulations for NanoMech prod-
integrated materials and manufacturing processes.
Suresh resigned from NanoMech on May 2, 2012,
after informing the company that she planned to
A. Count I: Breach of NDA
The NDA that Suresh signed during pre-employment
discussions with Nano Mech pertains to confidential
and proprietary information that was shared with
Suresh “solely for the purpose of evaluating a poten-
tial employment relationship," from March 18, 2010,
the first possible date of disclosure, until March 22,
2010, the last possible date of disclosure and date
ucts and was trained on the chemical aspects of nano-
WITHDRAWAL OF CA
2
Date of Notice 04/05/2018
Policy Type COMMERCIAL AUTO
Producer Name: ANNETTE WILLIS IN
Producer Telephone # 305-625-2403
AGENCY INC
Producer Code: 70927
RETAIN THIS NOTICE FOR YOUR PECE
APR 09 2018
Term
verage remains
Notice Date
04/05/2018
Producer Name and Phone Number
WILLIS INSURANCE AGENCY INC
7TH AVENUE
-NS FL 33056
17/2018
ΟΝΙ ΔΟ.
674 Part 6: Terminating Employment
With respect to the assurance that it would take four CASE QUESTIONS
to six months to become comfortable with the posi- 1. What were the legal issues in this case? What did the
tion, the statement cannot be reasonably relied upon
court decide?
as a promise of employment in the sales administra- 2. What was the implied contract in this case? How
tor position for a set period of time. Courts have gen- did the employer breach it?
erally required a promise of a specific and definite 3. Why does the disclaimer in the employee manual
nature before holding an employer bound by it. An not have the effect desired by the employer?
estimate of how long it would take a person to adjust 4. Why does Dillon's promissory estoppel claim fail?
to a job cannot be converted into a definite prom-
ise of employment for that period of time. Thus, the
vague assurance given to Dillon is not sufficient to
support her claim of promissory estoppel.
Effect of Disclaimers Employment at will is a harsh arrangement. It is difficult to put
a positive "spin" on the message that “We can fire you at any time for any reason not spe-
cifically prohibited by law and without even the most elementary procedural safeguards."
Most employers prefer to gain the motivational and employee relations benefits that come
from communicating the desire to treat employees fairly. Most employers probably also
intend to treat employees fairly. But employers do not want to be bound by promises of
fair treatment and liable for breaches. In short, most employers would like to have it both
ways: basking in the warm glow of assurances of fair treatment and remaining entirely
free to depart from any self-imposed limitations on the right to terminate at will.
Disclaimers are used to this end. Disclaimers are written statements incorporated
into employee handbooks, employment applications, or other important documents that
"disclaim” or deny that any statements in those documents create contractual rights bind-
ing on the employer. Language disclaiming the existence of a contract is typically com-
bined with notification to employees
in clear terms that their employment is at will. The
statement (capitalized) on the first page of the employee manual in Dillon informing em-
was being made to employees about how terminations and other decisions would be han-
dled is a good example of a disclaimer. As another examnle a bank included the following
ployees that the manual's provisions constituted guidelines only and that no commitment
in its
Purchase answer to see full
attachment