Appellate court sides with employer in dispute over noncompete agreement

In a win for employers, the Connecticut Appellate Court recently reversed a trial court’s decision that an employer couldn’t enforce a noncompete clause signed by an employee.

Facts

Joseph Schimenti worked for Schimenti Construction Company, LLC, as an at-will employee. He wanted more responsibility, so the company’s president promoted him. He remained an at-will employee, but his salary increased (provided he achieved certain performance objectives).

As a condition of the promotion, however, he had to sign a nondisclosure agreement that included a clause prohibiting him from competing with the company’s business during his employment and for two years after it ended.

Schimenti resigned from the company four years later and accepted a position with one of its competitors. The company sued him claiming, among other things, that he had breached the noncompete clause he had signed. He responded by claiming the clause was unenforceable because there hadn’t been any “consideration” for it.

In short, Schimenti claimed he hadn’t actually gotten anything (any “consideration”) for signing the nondisclosure agreement with the noncompete clause. All he “received” was continued employment, but that employment was “at-will,” meaning he could be terminated at any time for any reason (so, the continued employment wasn’t actually worth anything).

Courts weigh in

The trial court agreed with Schimenti and granted summary judgment (dismissal without a trial) in his favor.