In the context of a covenant not to compete, legitimate business interests include protecting the goodwill that arises from a former employee’s contacts with customers and safeguarding the confidential information to which the former employee had access. Here however, the covenant between plaintiff and defendant Gibson – plaintiff’s former employee – is not sufficiently tailored to such interests. The non-compete clause broadly purports to prohibit Gibson from “directly or indirectly engaging in or having an ownership interest in or participating in the financing, operation, management or control of any business that engages in a Restricted Business in a Restricted Territory.” This language would prohibit Gibson from working as a line cook in the cafeteria at IBM, Oracle or SAP. This is unquestionably overbroad.
The court denies defendants’ motion to dismiss plaintiff’s claim that Gibson has breached the nondisclosure provision of his employment agreement. Otherwise, the motion is granted. Plaintiff’s motion for a preliminary injunction is denied.
Plaintiff provides its customers with enterprise asset management software. Defendant Gibson signed an employment agreement and worked for plaintiff. Gibson voluntarily resigned and went to work for defendant Prospecta Software, which provides a platform for data management. Plaintiff alleges that Gibson breached his employment agreement.
In addition to the types of work it prohibits Gibson from performing, the non-compete...
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