Janitors can be seen as caretakers of a building; custodians. Their role can be either undermined or seen as part of what makes the world go around. They have also hit headlines recently when it comes to the push to have their pay raised. Their recognition has made its way into the realm of Contract Law and that trend is continuing. Janitor tests ended up setting the standard in non-compete cases and situations.
The Janitor Test and Non-Compete Agreements
A non-compete agreement is a contract between an employee and an employer in which the employee agrees not to enter into competition with the employer during or after employment. These legal contracts prevent employees from entering into markets or professions considered to be in direct competition with the employer. Restricting covenants have had their application in the utilization of a concept that some courts and litigants refer to as the “janitor analogy” or the “janitor test,” when questioning the breadth and scope of a non-compete provision. The test has evolved over the years, which shows us that janitors and the test will stay.
The first case we can look at is Reading & Language Learning Center v. Sturgill (2016). That case arguably had an overbroad, unenforceable agreement because the agreement did not clearly define the capacity in which scope of services could be provided. The speech therapist could even be prohibited from services other than the function in which that person worked previously, including but not limited to, selling furniture, providing cleaning services or plan school functions.
This line of reasoning was also applied in Distributor Service, Inc. v. Stevenson (2014). The Court stated, “[t]he bottom line is that the plain language of the Non-Compete Provision would prohibit Mr. Stevenson from being an ‘employee’ of any entity who engages in ‘Competitive Business Activity,’ whether he is in sales, works as a janitor, or maintains the second employer’s lawn. Thus, it is overbroad and unenforceable.”
When scope was limited, a “janitor analogy” did not go far because the scope of services was limited to areas in which that person had worked previously. The confidential information could, therefore, be used.
The more recent case of Medix Staffing Solutions, Inc. v. Dumbrauf (2018) had “janitor clauses”. It just goes to show that their use is another example of why these sorts of clauses can prove costly to employers. Courts will even be reluctant to want to modify them. On its face, the clause excluded an employee from taking any position with another company that engages in the same business, without regard to whether that position is similar to the prior position held. Accordingly, it was argued that the covenant was “too restrictive” and that the “covenant bars him from taking positions with those companies extend beyond roles that were similar to those he previously held to any position whatsoever at other companies in the industry.” The argument extended so far as to say that he couldn’t even work as a janitor for another company. The question of the justification of broader restrictions vs. legitimate business interests was the main crux of in which way the court was likely to lean. Continue reading ›
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