Burleigh v. Center Point Contractors, Inc.
2015 Ark. App. 615
| Ark. Ct. App. | 2015Background
- Center Point (general commercial construction) sued former operations manager Richard Burleigh for breach of a noncompete/confidentiality agreement and sought a preliminary injunction after he helped form KB Structural and solicited bids.
- Burleigh signed an agreement barring competition within 50 miles for two years and promising confidentiality and injunctive relief; it did not identify proprietary software, unique bidding formulas, or a secret customer list.
- Center Point’s owners testified Burleigh received only office/process orientation, not specialized training or proprietary tools; customer leads came from a subscription service available to others.
- Burleigh had ~14 years’ industry experience prior to Center Point and testified he gained no unfair advantage from Center Point.
- The circuit court granted a preliminary injunction and added terms not in the contract (broadly enjoining similar business activities, requiring Burleigh to notify Center Point of prospective work, and obligating Center Point to respond and submit bids; required a $50,000 bond).
- On appeal the Arkansas Court of Appeals reviewed whether Center Point showed likelihood of success on the merits (valid noncompete) and whether irreparable harm existed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the noncompete is enforceable (protectable interest) | Center Point: agreement protects its business from unfair competition and trade-secret/confidential use by Burleigh | Burleigh: Center Point offered no special training, trade secrets, or customer list—agreement merely bars ordinary competition | Reversed: noncompete invalid because Center Point lacked a protectable interest; it only shielded against ordinary competition, so no likelihood of success on the merits |
| Whether the court’s additional injunction terms showed the agreement was unreasonable | Center Point argued relief was appropriate to prevent competitive harm | Burleigh argued added terms demonstrated the contract’s overbreadth and unreasonableness | Court did not reach this point on appeal because it reversed on the primary enforceability issue |
Key Cases Cited
- Moore v. Midwest Distrib., Inc., 65 S.W.3d 490 (Ark. Ct. App. 2002) (employment noncompetes require special training or trade secrets to justify enforcement)
- Bendinger v. Marshalltown Trowell Co., 994 S.W.2d 468 (Ark. 1999) (challenger must show covenant is unreasonable to invalidate it)
- Freeman v. Brown Hiller, Inc., 281 S.W.3d 749 (Ark. Ct. App. 2008) (three-part reasonableness test: protectable interest, geographic scope, reasonable time)
- Import Motors, Inc. v. Luker, 599 S.W.2d 398 (Ark. Ct. App. 1980) (employer may not use covenant to shield from ordinary competition)
- Potter v. City of Tontitown, 264 S.W.3d 473 (Ark. 2007) (preliminary injunction standard: irreparable harm and likelihood of success on the merits)