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A.N. Deringer, Inc. v. Strough

United States Court of Appeals for the Second Circuit
103 F.3d 243 (1996)


A.N. Deringer, Inc. (Deringer) (plaintiff), was a customs broker with about 30 offices dotting the border between the United States and Canada. Deringer hired John Strough (defendant) in 1984. Strough worked for Deringer for 10 years, eventually working as a salesman for Deringer. At the time Strough began his sales position, he executed a confidentiality and trade-secret agreement with Deringer, for which he was compensated $1,000. This agreement prohibited Strough from competing with Deringer for 90 days after the termination of his employment and within a 100-mile radius of any Deringer office. If Strough breached the agreement, Deringer was entitled to enjoin Strough from violating the agreement, as well as to attorneys’ fees. Just a few months after signing this agreement, Strough quit his job at Deringer and the next day began work at Fritz Companies, Inc. (Fritz). Fritz was a competitor of Deringer’s. Strough worked as an officer manager for a Fritz office near the Deringer office where he had previously worked. Deringer immediately brought an action to enforce its noncompetition agreement against Strough, seeking damages for breach, and attorneys’ fees and costs. Thirty days after Strough left Deringer, the district court granted Deringer a preliminary injunction against Strough, instructing him to comply with the noncompetition agreement until the agreement’s 90 days had run. Fritz allowed Strough to work in one of its offices that was outside of a 100-mile radius of any Deringer office for the remaining 60 days of the agreement. About six months later, Strough moved for summary judgment, arguing that the noncompetition agreement was unenforceable. In response, Deringer moved for summary judgment, damages, and attorneys’ fees. The district court granted Strough summary judgment, finding the noncompetition agreement overly broad in its geographical restraint. The district court declined to amend the agreement’s geographical restraint because the 90-day time restriction had already expired. Deringer appealed.

Rule of Law


Holding and Reasoning (Restani, J.)

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