3rd time not always charm: Nondisparagement provisions will be enforced . . . eventually

The Vermont Supreme Court recently issued its third major opinion in an employment law case with a long and complex history. While the issues in the appeal (and there are many) are interesting, one is particularly relevant to Vermont employers, specifically the court’s consideration of the matters related to a permanent injunction for nondisparagement.

Facts

In 2003, Richard Howell invented a ski binding to prevent knee injuries common in downhill skiing and, in 2006, founded Kneebinding, Inc., to sell his products. He was ousted from the company relatively quickly on bad terms, but he signed a severance agreement containing a nondisparagement clause, a confidentiality clause, and a release of claims.

Howell promptly violated the agreement, including by picketing in front of the courthouse with a sign that said, “KneeBinding was 100% defective.” After some litigation, however, the parties eventually agreed to a permanent injunction.

Howell continued to violate the agreement and the injunction, which ultimately resulted in an additional injunction. The trial court found him in contempt and imposed sanctions.

The supreme court reinstated the permanent injunction in its second major decision in the case, which prevented Howell from disparaging the company or its products.

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