MASTERS LABORATORIES V. CONRAD

Conrad is legally precluded from going to work for Johnson Research.

Conrad, Chief Cancer Researcher at Employer, during the past four years covenanted in his employment contract with Employer that for a period of two years after he left the employ of Employer he would not engage directly in cancer research in the states of Connecticut and six other states including Pennsylvania. After he left the employ of Employer and within said two year period, Conrad became a cancer researcher for Johnson research, a small competitor of Employer in Scranton, Pennsylvania.

Overview. Although a number of states bar or strictly limit the enforceability of covenants not to compete in employment contracts, Connecticut is among the majority of states which handle such clauses on a case by case basis. Hartig says that "though restrictive covenants ancillary to contracts of employment were once considered void as repugnant to public policy, American courts have been enforcing noncompetition clauses for well over a century." The basic reason why courts in most states have tended to enforce such clauses is that "the shift of American business from a manufacturing economy to one based on services and intellectual property has

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nable because "it had taken years of effort for the [employer] to acquire its customers." Conrad should argue that in this case unlike the facts in Scott and other cases in which such covenants were enforced, Conrad had no contact with customers and that, therefore, the protection of customer goodwill is not involved. However, the Court in Scott and in May v. Young, supra, acknowledged that goodwill under modern conditions which needs protection often includes a firm's investment in trade secrets, research and technology. On the geographic limit, the Court in Scott said at 115 that "the application of a restrictive covenant will be confined to a geographical area which is reasonable in view of the particular situation." It went on to say that the geographical restriction would be unreasonable if the employer did not do business there or is unlikely to do business there." In an aside the Court made a statement which our client Conrad should use in support of his argument that the clause is unenforceable. At 115, the Court said that "a restrictive covenant in unenforceable if by its terms the employee is precluded from pursuing his occupation and thus is prevented from supporting himself and his family." The restrictive covenant
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Approximate Pages = 7 (250 words per page)