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Court Rejects Competitor’s Attempt to Enforce Non-Compete Agreement

Whirlpool Corporation filed suit in state court in Michigan to enforce a non-competition agreement against a former employee who was hired by our client Electrolux as a salesman. Whirlpool alleged that the employee violated an agreement containing a 12-month ban on working for a competitor. We removed the case to federal court. The court ruled that the agreement was unreasonable because it had no geographic limitation and as such would bar the employee from selling home appliances anywhere in the world. The court also found that Whirlpool failed to show that the employee had disclosed confidential company information or that he was likely to do so. The court wrote that under Michigan's Antitrust Reform Act, a post-employment non-competition agreement had to protect an employer’s "reasonable competitive business interests" and had to be "reasonable as to its duration, geographical area, and the type of employment or line of business." The judge also pointed out that much of the information Whirlpool cited as confidential was either generally known in the appliance trade or was readily ascertainable.

Whirlpool Corp. v. Burns, 457 F.Supp.2d 806 (W.D. Mich. 2006).

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