Charlene Hassler v. Circle C Resources
2022 WY 28
| Wyo. | 2022Background
- Circle C Resources hired Charlene Hassler in 2015 as a CNA to provide residential habilitation for a long‑term Medicaid client; Hassler signed Circle C’s written Confidentiality and Noncompetition Agreement.
- The agreement barred Hassler from competing or providing services to any of Circle C’s clients for 24 months and covered multiple Wyoming counties; it included a clause authorizing courts to substitute “maximum restrictions” if portions were held unenforceable.
- Client switched day‑service providers in early 2017; Hassler obtained a Medicaid provider number and began providing residential services under a different provider.
- Circle C sent a cease‑and‑desist letter, then sued Hassler for breach; the district court applied the liberal “blue pencil” rule, narrowed the covenant to Natrona and Converse counties and 12 months, and awarded Circle C $94,742.10.
- On appeal the Wyoming Supreme Court considered whether courts should continue to use the blue‑pencil (partial‑enforcement) approach to reform overbroad noncompetes.
- The court overruled its prior adoption of the liberal blue‑pencil rule, held the agreement’s duration and geographic restraints unreasonable, declared the entire covenant void as against public policy, reversed, and directed judgment for Hassler.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether courts may use the liberal blue‑pencil (partial enforcement) rule to rewrite overbroad noncompete covenants | Blue‑pencil is permissible to salvage parties’ bargains and protect employers’ legitimate interests | Court rewrite exceeds judicial authority and produces uncertainty; courts should not craft new contractual terms | Overruled Hopper; Wyoming courts will no longer reform unreasonable noncompetes — liberal blue‑pencil rejected |
| Whether Circle C’s noncompete was reasonable in duration and geographic scope | The covenant, if narrowed (as district court did), is reasonable and enforceable; damages flow from breach | The covenant as written is overbroad and unenforceable; court should not reform it | The original 24‑month and broad geographic terms are unreasonable; because blue‑pencil is disallowed, the entire covenant is void |
| Whether district court properly awarded damages based on its court‑modified covenant | Damages equal to projected profit for the modified 12‑month restriction | The entire agreement is void so no damages under the covenant | Judgment for Circle C reversed; summary judgment for Hassler directed (no enforceable covenant) |
| Who bears burden to show a noncompete is reasonable | Employer must prove restraints are reasonable to overcome presumption against restraints on trade | Same — employer must justify all covenant terms | Employer bears burden to prove all terms reasonable; failure here supports invalidation of entire covenant |
Key Cases Cited
- Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531 (Wyo. 1993) (previously adopted the liberal blue‑pencil/partial enforcement approach)
- Brown v. Best Home Health & Hospice, LLC, 491 P.3d 1021 (Wyo. 2021) (reaffirmed presumption that noncompetes are prima facie invalid and employer’s burden to justify restraints)
- Ridley v. Krout, 180 P.2d 124 (Wyo. 1947) (historic statement of public policy encouraging employee mobility)
- Reddy v. Community Health Found. of Man, 298 S.E.2d 906 (W. Va. 1982) (rejecting judicial revision of inherently unreasonable covenants)
- Questar Expl. & Prod. Co. v. Rocky Mountain Res., Inc., 388 P.3d 523 (Wyo. 2017) (procedural rule permitting appellate courts to grant summary judgment to nonmovant with notice)
- Golden Rd. Motor Inn, Inc. v. Islam, 376 P.3d 151 (Nev. 2016) (criticizing blue‑pencil practice and encouraging careful drafting of reasonable restraints)