BUSINESS, Noncompete Clause: Kegel v. Tillotson (COA 10/30/2009)

Kegel v. Tillotson
2008-CA-001938 10/30/09 2009 WL 3486739
Opinion by Judge Caperton; Judges Dixon and Taylor concurred.

The Court reversed and remanded an order of circuit court granting a motion for summary judgment in favor of appellee and denying a motion for summary judgment in favor of appellants on appellants’ complaint alleging that appellee violated, and continued to violate a non-compete clause she signed with the prior owner of the business for which she worked selling promotional products and advertising merchandise. The Court first held that the trial court erred in finding that the non-compete clause was not assignable. The contract was not one of personal confidence as appellee’s resignation letter showed that her relationship was with the company, not with the former owner, and evidenced an implicit acknowledgment that appellants stood in the former owner’s shoes insofar as their contractual rights were concerned. The Court further held that appellee’s status as an independent contractor did not alter the applicability of prior precedent that a successor employer may enforce an employee’s restrictive covenant as an assignee of the original covenantee. The Court next held that the trial court’s finding that the non-compete clause was unconscionable was prematurely entered. Whether or not the particular non-compete clause was conscionable was highly fact specific and the trial court could apply the “blue pencil” rule to reform or amend restrictions that are overly broad or burdensome.

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