North Carolina Business Litigation Report

Edgewater Services, Inc. v. Epic Logistics, Inc., October 22, 2007 (Jolly)(unpublished)

The Court discussed the consideration element of a post-employment covenant not to compete, nothing that an increase in compensation or a job promotion can be sufficient consideration.

The Court held the non-compete at issue invalid for other reasons, however, involving its temporal and geographic scope. First, the Court held that the covenant prevented the defendant from having even an indirect ownership in a competing company. It therefore did not protect a legitimate business interest of the former employer.

The Court futher found the time period of the restriction to be unreasonable, as the wording of the restriction required it to "look back" to a period of time when the employee began serving the customers as to which the restriction was sought.

The restriction also attempted, invalidly, to prevent the employee from dealing with "prospective customers," which the Court found to be "an undefined, and, therefore, unduly vague group."

Given that the covenant was customer based, as opposed to geographically based, the Court found the covenant to be invalid.

Full Opinion

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Mack Sperling
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