Connecticut Law Governs Non-Compete for Employee Based in Company’s Brazil Office
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Mr. Raymond Selle worked for MacDermid, Inc. for thirty years in various capacities at facilities in Connecticut, Maryland, and Sao Paulo, Brazil. MacDermid is a specialty chemical company engaged in a range of development, manufacture, and sale of chemicals and their corresponding processes. Mr. Selle resigned from the company in 2007 while stationed in Brazil and immediately began work at Enthone, a West Haven based company with a presence in Brazil, as its South American New Business Development Manager. MacDermid brought suit against Mr. Selle to enforce employment agreements from 1996 and 2002, seeking to prevent his employment at Enthone and the disclosure of confidential information.
MacDermid’s basis for legal action was two restrictive covenants signed by Mr. Selle and the vast amount of confidential information he acquired while employed at MacDermid.
Employment Agreement
The first “Employee’s Agreement” was signed November 24, 1996 and included a one-year non-compete agreement prohibiting employment with an industry competitor and an indefinite confidentiality agreement. Mr. Selle signed a second non-compete and non-disclosure agreement on June 25, 2022 when he began his position at MacDermid’s Sao Paulo office.
Additionally, the agreement stipulated that its provisions were to be “construed and enforced in accordance with the laws of the State of Connecticut, without regard to conflict of law principles”. MacDermid sought to enforce both the one-year non-compete clause and the indefinite confidentiality clause. The company claimed that Mr. Selle was privy to considerable confidential information while employed there, including business strategies, research & development projects, and customer contact information and transaction history.
The Court’s Decision
The federal court found in favor of MacDermid, enjoined Mr. Selle from employment with Enthone or any other of MacDermid’s industry competitor until September 10, 2008 (the duration of the one-year prohibition), and enjoined him from disclosing any confidential or proprietary knowledge acquired during his employment with MacDermid. The court found that there was “no basis for doubting the validity and enforceability of his [Selle’s] 1996 and 2002 employment agreements with MacDermid”. Mr. Selle’s tried to make the claim that the restrictive covenants were too broad and favored the employer but the court concluded that the covenant’s provisions were narrow and limited in scope so as not to dramatically disadvantage the employee.
The court also discussed and decided what jurisdiction’s law to apply. Mr. Selle argued that Brazilian law should govern the agreement and legal proceedings since that was where he found new employment at Enthone. Mr. Selle made this assertion because he felt that Brazilian law reflects a fundamental public policy against the enforcement of restrictive covenants in employment contracts. The court however held that Connecticut law superseded Brazilian law in this case and would govern the restrictive covenant, as specified and agreed to in the 1996 and 2002 agreements.
Conclusion
This case shows that in certain restrictive covenants, Connecticut law (or any state’s law) can be governing even when employment takes the employee out of the country. The choice of law provision establishes the controlling legal principles (in this case, those of Connecticut) of the restrictive covenant and is characterized by global application.
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