ADP LLC v. Jordan Lynch
678 F. App'x 77
3rd Cir.2017Background
- ADP offered selective incentive stock awards through an online portal that required employees to check a box confirming they had read the associated documents and then click “Accept Grant” after entering a personal password.
- The linked 19‑page PDF contained the award plan, award agreement, and a noncompete that expressly stated acceptance of the award was conditioned on agreeing to the noncompete.
- The noncompete barred joining an ADP competitor and soliciting ADP’s current and prospective clients for 12 months post‑employment.
- Lynch and Halpin accepted five awards via the portal while employed at ADP, then resigned and began working for ADP’s direct competitor, Ultimate Software.
- ADP sued and obtained a preliminary injunction that (1) enjoined solicitation of ADP’s current clients, (2) limited solicitation of prospective clients only to prospects of which Lynch and Halpin had knowledge while at ADP, (3) lasted one year, and (4) allowed them to remain employed at Ultimate.
- Lynch and Halpin appealed, arguing the district court should have held a hearing and that checking a box that they had “read” the documents did not prove assent to the noncompete.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a hearing was required before granting the preliminary injunction | Lynch/Halpin: disputed facts required a hearing | ADP: written evidence (documents, affidavits, depositions) resolved relevant facts | No hearing required; evidence left no unresolved material facts |
| Whether checking a box stating “I have read all the documents” plus clicking “Accept Grant” and entering a password constitutes assent to the noncompete | Lynch/Halpin: checkbox only confirmed reading, not agreement | ADP: acceptance was conditioned on agreement; clicking Accept + password manifested assent | Court: acceptance bound them to the noncompete; likely to succeed on the merits |
| Whether the preliminary injunction was overbroad / not reasonably tailored under New Jersey law | Lynch/Halpin: injunction exceeded reasonable time/area/scope limits | ADP: injunction was tailored for preliminary relief (limited duration and scope) | Court: injunction was appropriately tailored for preliminary relief and not an abuse of discretion |
| Whether other preliminary‑injunction factors supported relief (irreparable harm, balance of harms, public interest) | Lynch/Halpin: disputed harm and scope | ADP: risk of solicitation, employer interests, public interest in enforcing contracts | Court: weighed factors and affirmed preliminary injunction |
Key Cases Cited
- K.A. ex rel. Ayers v. Pocono Mountain Sch. Dist., 710 F.3d 99 (3d Cir. 2013) (standards of review and factors for preliminary injunction)
- Am. Tel. & Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421 (3d Cir. 1994) (scope of appellate review of preliminary injunctions is narrow)
- Bradley v. Pittsburgh Bd. of Educ., 910 F.2d 1172 (3d Cir. 1990) (hearing is not always required before ruling on a preliminary injunction)
- Williams v. Curtiss‑Wright Corp., 681 F.2d 161 (3d Cir. 1982) (preliminary injunction may issue on affidavits and written evidence if no unresolved factual issue)
- Stelluti v. Casapenn Enterprises, LLC, 1 A.3d 678 (N.J. 2010) (party who enters written contract is presumed to understand and assent to its terms)
- Ingersoll‑Rand Co. v. Ciavatta, 542 A.2d 879 (N.J. 1988) (restrictive covenants enforceable to extent reasonable in time, area, and scope)
- McLendon v. Cont’l Can Co., 908 F.2d 1171 (3d Cir. 1990) (permanent injunctions require closer scrutiny than preliminary injunctions)