Today I read a recent unpublished court of appeals decision. E-Mation v DeJong.
A very brief summary of the facts: a Kent County, Michigan based company made its employee sign a Confidentiality and Non-Compete Agreement.
Employee, DeJong, resigned his employment to go work for a competitor.
Company sued former employee alleging violation of the non-compete.
In Michigan, Non-Competes are not per se, unenforceable. They must be reasonable.
But the problem the Company ran into was in the language it chose to use in its contract.
The language of the non-compete stated the following:
“[f]or a period of 12 months after termination of [DeJong’s] employment by the company . . .”
The Judge admitted they had not seen such language before, and held the non-compete was only operative if the Company terminated the employee.
The typical language in a non-compete that I would see might say something to the effect of, “for a period of 12 months after employment ends, for any reason…”
The Court applied the plain, unambiguous, language of the contract to hold the employee had not violated the agreement.
The case goes on…the court of appeals upheld a finding by the trial court sanctioning the company for filing a frivolous lawsuit and is required to pay attorney fees to the former employee (over $60,000…).
The point I want to leave you with is this:
If you haven’t had your business contracts reviewed in a while, it might be worth engaging legal counsel to do a review.
