Chicago Business Litigation Lawyer Blog
The Federal Court of Appeals for 8th Circuit —the appeals court for federal district courts in South Dakota, Minnesota, Missouri, Nebraska, North Dakota, Iowa, and Arkansas —refused to enforce a corporate employer’s non-compete contract.
The Parties’ Dispute.
The case arose out of the following facts.NanoMech, a Delaware corporation with its principal place of business in Arkansas, researches and develops nanotechnologies. The company specializes in creating nanotechnology products for nanomachining, manufacturing, lubrication, energy, biomedical coatings, and strategic military applications.
NanoMech hired Arunya Suresh in March of 2010. NanoMech required Suresh to sign a confidentiality/nondisclosure agreement before hiring her. In that agreement she agreed to protect NanoMech’s interest in any information that was disclosed to her for the purpose of evaluating a potential employment relationship. As a condition of her employment, she later signed an employment agreement which she agreed would be governed by Arkansas law.
The contract’s non-compete clause stated:
COVENANT NOT TO COMPETE: The Employee agrees that during the term of this Agreement, and for two (2) years following termination of this Agreement by the Company, with or without cause, or, for a period of two (2) years following a termination of this Agreement by the Employee, the Employee will not directly or indirectly enter into, be employed by or consult in any business which competes with the Company.
During her employment with NanoMech, Suresh participated in projects involving use of nanointegrated materials and in manufacturing processes for nanoparticle-based products. She researched and helped develop one of NanoMech’s multi-component lubrication products called nGlide.
On May 2, 2012, Suresh gave notice stating that she intended to pursue her doctorate full-time. Later, in March 2013, NanoMech discovered that Suresh had in fact taken a job as an application chemist with BASF, a worldwide chemical company that develops engine lubricants. Continue reading ›