Courtroom Victory: Restrictive Covenant & Confidential Information Dispute
Overview
Stephen Wolpert and Athanasios Makrinos, partners at Whitten & Lublin PC, successfully defended Fabio Folino, a former employee of Labrador Recycling, Inc., against claims of breach of restrictive covenant and misuse of confidential information.
Background
Labrador Recycling Inc. accused Mr. Folino of violating a restrictive covenant in his employment agreement and misusing confidential information after leaving the company. Labrador Recycling sought injunctive relief to prevent him from competing with them in the market, alleging that Folino was soliciting and accepting business from their customers using confidential information.
The plaintiff argued that the restrictive covenant in Folino’s employment agreement should be enforced and that he had breached confidentiality provisions, harming the company’s business. Mr. Wolpert and Mr. Makrinos, representing Mr. Folino, challenged the enforceability of the restrictive covenant, stating it was overly broad in its reach and unreasonable.
Case Details
The court addressed two key issues:
- Whether the restrictive covenant in Folino’s employment agreement was enforceable.
- Whether Labrador Recycling had established a strong prima facie case for misuse of confidential information.
Initially, Labrador Recycling argued that the non-solicitation and non-acceptance clause was necessary to protect their business interests. However, Mr. Wolpert and Mr. Makrinos argued that the latter clause was akin to a non-compete clause, which is generally unenforceable unless it meets strict criteria for reasonableness.
The court expressed doubts about the enforceability of the clause, agreeing with Mr. Wolpert and Mr. Makrinos that the clause lacked clear temporal and geographic limits, and imposed restrictions on personal contacts unrelated to the plaintiff’s business. Additionally, the court found that the plaintiff failed to establish a strong prima facie case of confidential information misuse or any irreparable harm.
Results
The court sided with the defendants, ruling that the restrictive covenant was unenforceable, and that the plaintiff had not established a strong prima facie case for misuse of confidential information. The motion for injunctive relief was dismissed.
Conclusion
This case underscores the importance of carefully drafted restrictive covenants and the challenges employers face in enforcing such clauses. Stephen Wolpert and Athanasios Makrinos successfully defended their clients by demonstrating the unreasonableness of the restrictive covenant and the lack of evidence for the alleged misuse of confidential information.
How Can Employers and Employees Protect Their Rights?
Navigating employment agreements and restrictive covenants can be complex. Our experienced employment lawyers can help protect your business interests or defend your rights as an employee. Contact us for a consultation online or by phone (416) 640-2667 today.