Case Background
Ms. Adele Unger worked for Prudential Realty and signed an employment agreement with the company at the start of her employment that contained a non-compete clause. The restrictive covenant prohibited her for a period of one year following termination from directly or indirectly influencing any Prudential Realty employee to sever his or her employment/association with the company or any of its subsidiaries.
Upon termination from Prudential, Ms. Unger began to work as a real estate agent for Paul Breunich and William Pitt Real Estate, LLC. She notified the company’s President and Chief Financial Officer (Mr. Paul Breunich) of the existence of the restrictive covenant with her former employer and that she was legally prohibited from recruiting Prudential agents to work for the company.
Mr. Breunich, in connection with his management positions, solicited/recruited agents for offices where the office manager was a signatory to a non-compete agreement with a former employer. Ms. Unger did not solicit any agent from her former employer or furnish her new company with any information but Mr. Breunich did contact several Prudential agents to inquire if they were interested in switching companies. Prudential sued Ms. Unger and her new employer for violation of the restrictive covenant, alleging that Mr. Breunich’s actions constituted an indirect solicitation by Ms. Unger, a business activity expressly prohibited in the employment agreement.
The Court’s Decision
The court denied Prudential’s request for injunctive relief and held that Ms. Unger had not directly or indirectly violated the restrictive covenant contained in the employment agreement. The parties did not dispute that Mr. Breunich contacted and solicited Prudential agents, but the court did find any evidence that Ms. Unger provided him with any information to assist in his solicitations. There was no conscious disregard for the restrictive covenant by Ms. Unger, in either a direct or an indirect manner.
It would be an entirely different case if Ms. Unger’s superiors had solicited Prudential agents based on proprietary information she gained while working for her former employee, but this was not at all the circumstances of the case. Prudential was not able to present adequate and convincing evidence that Ms. Unger had in any way violated the restrictive covenant and as such, the court denied the company’s request for an injunction against Ms. Unger.
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