Mazonson, Part II: Judge Finds Customer-based Noncompete Overbroad

The Mazonson decision described in the previous post also contained an interesting discussion of the plaintiff’s request to enforce a customer-based restriction against one of the individual defendants.  On this issue as well, the Massachusetts court denied the request for a preliminary injunction.  Interestingly, Judge Murtagh found that the agreement’s restriction prohibiting the employee from providing services or selling insurance to any customer, even if there had been no solicitation by the employee, violated public policy and was unenforceable.  

The provision at issue was something of a hybrid:  it prohibited not only the solicitation of the company’s customers but also the provision of services to them.  As such, it was essentially a limited form of non-compete agreement.  Such provisions have been enforced by other Massachusetts judges in other contexts, particularly where the plaintiff could show that enforcement was necessary to protect customer goodwill.  But Judge Murtagh found it to be a “naked and unreasonable restraint on trade and commerce.”  He went on to find that there was no concrete evidence that any of the three customers at issue in the case were solicited by the individual defendants.  (As it happens, one of the allegedly-solicited customers was Foley Hoag; we played no role as counsel in the case.)   In so doing, Judge Murtagh sent a clear signal that he will scrutinize very carefully any request for injunctive relief in a restrictive covenant case.

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