217 Conn.App. 224
Conn. App. Ct.2023Background
- Schimenti Construction (plaintiff) employed Joseph Schimenti (defendant) from 1998; defendant was promoted to managing director effective Feb. 1, 2014.
- On Feb. 25, 2014 plaintiff presented a promotion letter (stating defendant remained an at‑will employee) and a nondisclosure/assignment/non‑solicit agreement requiring a 24‑month post‑employment restriction; defendant signed the NDA Feb. 28, 2014 and the promotion letter March 17, 2014.
- The promotion letter made execution of the NDA a condition of the defendant’s continued employment and contemplated a future raise contingent on performance.
- Defendant resigned in March 2018 to work for a competitor; plaintiff sued for breach of the NDA and related claims.
- The trial court granted summary judgment for defendant, ruling the restrictive covenants lacked consideration (relying on this court’s Thoma decision); plaintiff appealed.
- The Appellate Court reversed, holding Roessler v. Burwell controls and that continued employment of an at‑will employee can be sufficient consideration, so genuine issues of material fact precluded summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether continued employment of an at‑will employee is sufficient consideration for a restrictive covenant signed after employment begins | Continued employment (and the promotion/raise condition) may constitute consideration; Roessler controls | Continued employment is merely status quo and cannot supply consideration for new obligations | Reversed trial court: continued employment can be adequate consideration; genuine factual dispute exists |
| Whether the promotion and promised raise constituted separate consideration for the NDA | Promotion and $20,000 raise (and added duties) supplied consideration | Any promised future raise was illusory/contingent and did not create consideration | There is a genuine issue of material fact as to whether the promotion/raise supplied consideration; remand for further proceedings |
| Whether Thoma precludes continued employment as consideration as a matter of law | Roessler is controlling Supreme Court precedent permitting consideration via continued employment | Thoma was invoked to hold continued employment insufficient | Thoma was fact‑specific and does not negate Roessler; trial court erred to rely on Thoma as a broad rule |
| Whether summary judgment was appropriate on the lack‑of‑consideration defense | Plaintiff: factual disputes (conditioning of continued employment, timing, voluntary departure) preclude summary judgment | Defendant: no consideration as a matter of law, so judgment should be entered | Summary judgment improper because material factual issues exist; case remanded |
Key Cases Cited
- Roessler v. Burwell, 119 Conn. 289 (Conn. 1934) (continued employment of an at‑will employee can constitute adequate consideration for a restrictive covenant)
- Torrington Creamery, Inc. v. Davenport, 126 Conn. 515 (Conn. 1940) (upholding restrictive covenant despite employer’s ability to discharge employee at will)
- Thoma v. Oxford Performance Materials, Inc., 153 Conn. App. 50 (Conn. App. 2014) (fact‑specific holding; continued employment there was not adequate because plaintiff lost contractual rights and continued employment was not predicated on the new agreement)
- Van Dyck Printing Co. v. DiNicola, 231 Conn. 272 (Conn. 1994) (discusses enforceability of post‑employment covenants signed after employment begins)
- Dick v. Dick, 167 Conn. 210 (Conn. 1974) (addresses past consideration principles; not dispositive for at‑will employment restrictive covenants)