Court Amends Time Restriction for Engineering Firm Non-Compete Agreement

Maintenance Technologies International, LLC (MTI) was a Milford, Connecticut-based company that offered highly specialized engineering maintenance services to clients.  The company employed Mr. Daniel Vega as an engineer from February 25, 2002, to October 7, 2005.  His responsibilities for this position included conducting vibration analysis, infrared thermography, motor testing, and laser alignment.  He signed a covenant not to compete as part of his employment agreement with the company.

The restrictive covenant prohibited Mr. Vega, for a period of two years following termination, from engaging in competing business activities within one hundred fifty miles of MTI’s current principal place of business.  The agreement further stated that he could not own any stock in a competing business located within one hundred fifty miles of MTI’s principal place of business.

Breach of the Employment Agreement 

Mr. Vega informed his superiors that he would be voluntarily terminating his employment with the company due to family related issues and his personal ambition to finish his master’s degree in theology.  Once he quit MTI however, he began to work for Schultz Electric Co., a competing company with major offices in Connecticut, Maine, Massachusetts, and New Jersey.

MTI’s management interpreted this move as a violation of the non-compete agreement executed when Mr. Vega’s employment with the company started and sued him in Connecticut state court.  The company requested that the court enforce the provisions of the restrictive covenant in order to prevent any further violations of the agreement.  The court found in favor of MTI, granted the company’s request for an injunction, but amended the time restriction to be only one year, instead of the two-year period as stipulated in the agreement.

The Court’s Decision

In reaching its decision, the court assessed whether MTI had a legitimate interest that needed protection and whether the restrictions in the non-compete agreement were reasonable in scope.  The court recognized that the company spent a great deal of resources on training its employees and this created a valid interest according to the court.

Furthermore, the employees were on the front lines with regard to the business relationships with MTI’s customers and had direct access to proprietary and confidential information.  The court held that a company’s employees and customer relationships are its most valuable assets and are worthy of protection under Connecticut law.  Injunctive relief, therefore, was reasonably necessary for the fair protection of the employer’s business interests.

Next, the court examined whether the specific restriction contained in the agreement were reasonable in scope.  The court held that they amounted to a reasonable and legitimate restriction of Mr. Vega’s ability to work.  They provided an adequate amount of protection to MTI while not overreaching and unnecessarily restricting Mr. Vega’s ability to secure future employment.  The limitations still allowed many viable career options for Mr. Vega.

The court did however slightly amend the time restriction.  It was concerned that the full two years could prove to be “somewhat inequitable” and reduced the restriction to one year, instructing the parties that they could submit arguments prior to the expiration of the one year regarding a potential extension to the full two years as stipulated in the covenant not to compete.

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