executive employment contracts including non ... - ALI CLE

A.Need to be aware of potential pitfalls.PART 1: INTRODUCTIONCertain problems and pitfalls recur regularly in restrictive covenant cases. An experiencedpractitioner who is aware of these problems and pitfalls may, however, be able to avoid themby carefully drafting an employment agreement. Compare Seligam and Latz of Pittsburgh,Inc. v. Vernillo, 114 A.2d 672 (1955) (holding restrictive covenant enforceable againstformer employee who memorized customers' names and formed new salon) with ReneeBeauty Salon, Inc. v. Blose-Venable, 661 A.2d 847 (Pa. 1995) (holding salon withoutrestrictive covenant unable to enjoin former employee who memorized customer names fromcompeting). Similarly, in the do-it-yesterday rush that may accompany an employer'sattempts to enforce a covenant through a preliminary injunction, advance knowledge of thesespecial issues will help the practitioner make an appropriate attack.B.This discussion highlights some of the common problems often seen in these cases.1.Problems relating to validity.a.Consideration and continued employment;b.Overbreadth.2.Particular protection problems.a.Confidential information;b.Nonraiding, inventions and work for hire, and nonsolicitation of customers;c.Duties and acknowledgment of other opportunities;d.Review by counsel.3.Problems relating to damages and injunctive relief.a.Acknowledgment of venue and jurisdiction;b.Liquidated damages;c.Equitable bars;d.Period of injunction.4.Choice of law.C.Caveat: States often have widely varying approaches to these problems. Some suggestedsolutions may or may not be enforceable in a given state.- 36 -