Paramount Tax & Accounting LLC v. H & R Block E. Enters. Inc.

The noncompetition clause in a former employee's employment agreement was invalid and unenforceable as a matter of law for lack of proper territorial limits.

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Paramount Tax and Accounting, LLC “Paramount” and Mary Squire appeal from a preliminary injunction order entered against them and in favor of Squire’s former employer, H & R Block Eastern Enterprises, Inc. “Block”. Paramount and Squire assert that the trial court erred in finding: 1 that the restrictive covenants contained in Squire’s employment contract with Block were enforceable; 2 that Squire had breached those covenants; and 3 that the names and addresses of Block’s past customers constituted a trade secret. Paramount and Squire further claim that the trial court abused its discretion in entering an overly-broad injunction against them. We find that the noncompetition clause contained in Squire’s employment contract is invalid, because it fails to properly limit the territory to which it applies. Accordingly, the trial court erred in concluding that the restrictive covenants at issue were enforceable and that Squire had breached the same. We therefore reverse those findings and that part of the trial court’s order enjoining Squire from engaging in conduct that violates the invalid covenants. We affirm, however, that part of the trial court’s order finding that Block’s customer list constituted a trade secret, because this finding is supported by some evidence. Finally, we hold that the injunction entered against Paramount and Squire resulting from their misappropriation of this trade secret was impermissibly broad, and we therefore vacate that injunction and remand the matter to the trial court, so that it may fashion more narrowly tailored relief.

The decision to grant an interlocutory injunction rests within the sound discretion of the trial court, “and we will not disturb the trial court’s order in the absence of a manifest abuse of that discretion.” Punctuation omitted. Trujillo v. Great Southern Equip. Sales, LLC .1 An abuse of discretion may be found where there is no evidence supporting the trial court’s findings or where the trial court misinterpreted or misapplied the relevant law. Azzouz v. Prime Pediatrics, P.C. 2

Paramount Tax & Accounting LLC v. H & R Block E. Enters. Inc.

The noncompetition clause in a former employee's employment agreement was invalid and unenforceable as a matter of law for lack of proper territorial limits.

Share with Email

Thank you for sharing!

Trending Stories

More From ALM

Subscribe to Daily Report