Brobston from disclosing proprietary information about ICA and by restraining him from competing with ICA? If so, for what duration and over what geographic area?

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Brobston from disclosing proprietary information about ICA and by restraining him from competing with ICA? If so, for what duration and over what geographic area?

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Richard Brobston was hired by Insulation Corporation of America (ICA) in 2006. Initially, he was hired as a territory sales manager but was promoted to national account manager in 2010 and to general manager in 2014. In 2016, ICA was planning to acquire computer-assisted design (CAD) technology to upgrade its product line. Prior to acquiring this technology, ICA required that Brobston and certain other employees sign employment contracts that contained restrictive covenants or be terminated and changed their employment status to “at-will” employees. These restrictive covenants provided that in the event of Brobston’s termination for any reason, Brobston would not reveal any of ICA’s trade secrets or sales information and would not enter into direct competition with ICA within three hundred miles of Allentown, Pennsylvania, for a period of two years from the date of termination. The purported consideration for Brobston’s agreement was a $2,000 increase in his base salary and proprietary information concerning the CAD system, customers, and pricing. Brobston signed the proffered employment contract. In October 2016, Brobston became vice president of special products, which included responsibility for sales of the CAD system products as well as other products. Over the course of the next year, Brobston failed in several respects to perform his employment duties properly, and on August 13, 2017, ICA terminated Brobston’s employment. In December 2017, Brobston was hired by a competitor of ICA who was aware of ICA’s restrictive covenants. Can ICA enforce the employment agreement by enjoining Brobston from disclosing proprietary information about ICA and by restraining him from competing with ICA? If so, for what duration and over what geographic area?

Explanation & AnswerSolution by a verified expert

Explanation

There is no need to take away the freedom of Individual B from getting employed in any competing business as it does not create any problem for the company, provided that Individual B engages for a specific time in a specific location with any rival business and not exchanges personal information with other firms.
For the best interests of both the parties, it is suitable to restrict Individual B from sharing any confidential information with some other firm.
Individual B does not have much information about the new technology installed in the company. Because of this, there is no threat to the confidentiality of the company from Individual B.

Verified Answer

It is unreasonable to restrict Individual B from engaging in any competing company for a specific time in a particular place and sharing sensitive details to other businesses.
For the protection of the company, it is enough to form a contract with Individual B that states that Individual B does not disclose any business secrets to other firms, and Individual B cannot be forced to seek employment in any other competing firm.

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