94 F. Supp. 3d 280
D. Conn.2015Background
- Naso was promoted to Branch Manager at A.H. Harris in April 2013 contingent on signing a Confidentiality and Non-Interference Agreement containing (1) a 2‑year antisales restriction, (2) a 2‑year noncompetition clause within a 100‑mile radius (expressly naming White Cap), and (3) a broad nondisclosure clause. She signed after unsuccessfully seeking revisions tied to a possible Baltimore office closure.
- A.H. Harris increased Naso’s salary and made her eligible for management bonuses as part of the promotion. The Baltimore branch closed in November 2013 and Naso’s employment was terminated.
- Naso accepted employment with White Cap in Baltimore. A.H. Harris sued for breach of contract and other claims and moved for a preliminary injunction to bar Naso from working for White Cap.
- Naso and White Cap argued the Agreement was unenforceable due to (i) fraud in the inducement (company secretly considering exiting Baltimore), (ii) lack/withdrawal of promised consideration (bonus opportunity), and (iii) unreasonableness of the restrictive covenants.
- The court held the Agreement enforceable, found A.H. Harris likely to prevail on the breach claim, concluded irreparable harm and inadequate legal remedy were presumptively present for a reasonable covenant, and granted a preliminary injunction enjoining Naso’s employment with White Cap within the restricted scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability — fraud in inducement | A.H. Harris: no fraudulent misrepresentation; company did not knowingly conceal intent to exit market | Naso: company misled her about not exiting Baltimore when it was considering closure | Denied — defendants failed to prove clear and satisfactory evidence of fraud; communications showed only a risk and assurances were limited and accurate |
| Enforceability — consideration | A.H. Harris: promotion, pay increase, and bonus eligibility constituted adequate consideration | Naso: promised bonus/consideration was frustrated by employer-initiated termination | Denied — promised opportunity and other economic benefits are sufficient consideration even if bonus never paid |
| Enforceability — reasonableness of restraints | A.H. Harris: 2‑year duration, antisales scope and 100‑mile radius reasonably protect legitimate business interests in a narrow‑margin, relationship‑driven market | Naso: clauses overbroad (broad customer definition, large radius, prevents earning a living) | Denied — under Scott factors covenants are reasonably tailored in time, area and protection; not contrary to public interest |
| Preliminary injunction factors (irreparable harm, likelihood of success, balance of equities) | A.H. Harris: reasonable covenant → presumption of irreparable harm and inadequate remedy; likely to prevail on breach; equities favor enforcing agreed restrictions | Defendants: insufficient evidence of actual misuse of confidential info; injunction disrupts Naso's employment | Granted — court applied rebuttable presumption of irreparable harm, found likelihood of success on breach, and concluded equities favor plaintiff |
Key Cases Cited
- Aqleh v. Cadlerock Joint Venture II, L.P., 299 Conn. 84 (Conn. 2010) (standard for temporary injunctions in Connecticut)
- Mattis v. Lally, 138 Conn. 51 (Conn. 1951) (irreparable damage presumed from violation of reasonable covenant)
- Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525 (Conn. 1988) (Scott factors and treatment of antisales vs anticompetitive covenants)
- New Haven Tobacco Co. v. Perrelli, 18 Conn. App. 531 (Conn. App. 1989) (analysis of geographic scope and public interest)
- Schoonmaker v. Cummings & Lockwood of Connecticut, P.C., 252 Conn. 416 (Conn. 2000) (reasonableness determined by facts, not mere literal breadth of language)
- Osborne v. Locke Chain Co., 153 Conn. 527 (Conn. 1966) (consideration doctrine: exchange of promises is sufficient)