from the July 2012 LEL Newsletter
We live in a market society that generally assumes competition will achieve more positive results than would a monopoly. However, in some cases, courts will enjoin competitors. For example, noncompete contracts between employers and employees are often enforced, but only if the competition bar is narrow in length of time, geographic scope, and type of work. A recent case from Alabama struck down an employer’s overly broad noncompetition agreement that would have kept former employees from opening any new company that would compete with their former employer for defense contracts. The employer claimed that it needed that protection in order to protect trade secrets. Monte Sano Research Corp. v. Kratos Defense & Security Solutions, Inc. (Ala. May 25, 2012) http://law.justia.com/cases/alabama/supreme-court/2012/1101484.html
http://statecasefiles.justia.com/documents/alabama/supreme-court/1101484...
The facts in this case involve military procurement processes and contract language. The court’s discussion and analysis are interesting, because they provide a window into how an important economic and political sector of our system functions. For example, in addition to the standards applied in run-of-the-mill noncompete covenant cases, this one also considers how the noncompete clause affects national defense needs.
