Technology Company’s Non-Compete Found Enforceable on Grounds of Protecting Employer’s Interest and Commercial Operations
by
Joseph C. Maya on Feb. 23, 2024
Summary: Xplore Techs. Corp. v. Killion, 2010 Conn. Super. LEXIS 2401
Xplore Technologies Corporation was a company engaged in the engineering, developing, and marketing of rugged computer tablets. Mr. Timothy Killion worked as a Senior Sales Representative with the company from December 8, 2003, to June 2010. As part of his employment contract with Xplore, Mr. Killion signed a non-compete and non-disclosure agreement that stated, “By accepting this offer, you agree not to exercise or participate in any activity directly or indirectly competing with that of Xplore Technologies, Corp.” for a period of one year.
In June 2010, Mr. Killion announced that he would be leaving Xplore to work for another company, later identified as DRS Technologies, Inc., a direct competitor. In the years leading up to Mr. Killion’s resignation he was intimately involved in the development of a new product and a deal with AT&T valued at $20-23 million. Xplore commenced a suit seeking an injunction to prevent DRS’s further employment of Mr. Killion and prevent the disclosure/utilization of any classified information regarding Xplore’s business operations. Mr. Killion claimed that the non-compete agreement was unenforceable because it was too broad in scope.
The Court’s Decision
The Superior Court held in favor of Xplore Technologies, finding the non-compete to be valid and issued an injunction prohibiting DRS from employing Mr. Killion until a year after his resignation from Xplore. The court found that the strongest factor that made the agreement enforceable was the employer’s interest to protect its commercial operations. Non-compete agreements protect employers in the specific area in which they do business by restricting the disclosure of trade secrets, technical marketing, and financial information. The court held that the non-compete agreement was a reasonable and binding way for Xplore to protect itself given the uniqueness of the industry, its products, and business activities.
The court struck down Mr. Killion’s assertion that the agreement was too broad with regard to time and space. It held that the one-year period was appropriate and reasonable provided the length of Mr. Killion’s employment with Xplore and the nature of the company. The lack of geographical limitations does not invalidate the agreement in this case. The nature of Xplore’s business is heavily internet-based and its employees’ work is not confined to a specific office within a specific geographical area. Instead, the geographical limitations become Xplore’s three direct competitors that conduct business in the same manner and that are involved in the development of similar products.
Maya Murphy P.C. has proudly been included in the 2024 Edition of Best Law Firms®, ranked among the top firms in the nation. In addition, Managing Partner Joseph C. Maya has been selected to The Best Lawyers in America® 2024 for his work in Employment Law and Education Law in Connecticut. Recognition in Best Lawyers® is awarded to firms and attorneys who demonstrate excellence in the industry, and is widely regarded by both clients and legal professionals as a significant honor.
Our firm in Westport, Connecticut serves clients with legal assistance all over the state, including the towns of: Ansonia, Beacon Falls, Bethany, Bethel, Branford, Bridgeport, Brookfield, Cheshire, Danbury, Darien, Derby, East Haven, Easton, Fairfield, Greenwich, Guilford, Hamden, Madison, Meriden, Middlebury, Milford, Monroe, Naugatuck, New Canaan, New Fairfield, New Haven, Newton, North Branford, North Haven, Norwalk, Orange, Oxford, Prospect, Redding, Ridgefield, Seymour, Shelton, Sherman, Southbury, Stamford, Stratford, Trumbull, Wallingford, Waterbury, West Haven, Weston, Westport, Wilton, and Woodbridge. In addition to assisting clients in Connecticut, our firm handles education law and employment law matters in New York as well.
If you have any questions about employment law or education law in Connecticut, or would like to speak to an attorney about a legal matter, please contact Joseph C. Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation today.
