Dearborn v. Everett J. Prescott, Inc.

486 F. Supp. 2d 802 (2007)

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Dearborn v. Everett J. Prescott, Inc.

United States District Court for the Southern District of Indiana
486 F. Supp. 2d 802 (2007)

Facts

Christopher J. Dearborn (plaintiff), an Indiana resident, worked for Everett J. Prescott, Inc. (EJP) (defendant), a Maine corporation with its principal place of business in Maine, in sales out of EJP’s Indiana office. Dearborn left EJP after 10 years, accepting a position with an EJP competitor, Ferguson Enterprises, Inc. (Ferguson). Two years earlier, EJP had required Dearborn to sign a noncompetition agreement. The noncompetition agreement contained a Maine choice-of-law provision. Employees were paid $250 as consideration for the agreement, and the agreements broadly restricted employees from working for a competitor for three years after their employment with EJP in any geographic area within 100 miles of EJP offices, distribution centers, or any other EJP place of business. After Dearborn began working for Ferguson, EJP sent him a cease-and-desist letter, but the demands in the letter were narrower in scope than the noncompetition agreement. Dearborn filed suit in federal district court in Indiana, seeking declaratory and injunctive relief barring EJP from enforcing the noncompetition agreement. Under Maine law, if a former employer only sought to enforce a portion of a noncompetition agreement, the court would consider whether that portion of the noncompetition agreement was enforceable. Under Indiana law, the court looked at the noncompetition agreement as a whole to determine its enforceability, regardless of whether the employer only sought to enforce a narrower scope of the restrictions. EJP moved for a preliminary injunction to prevent Dearborn from working for Ferguson, arguing that Maine law applied.

Rule of Law

Issue

Holding and Reasoning (Hamilton, J.)

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