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Appeals court tosses injunction tied to non-compete clause

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Terms of a non-compete clause in an agreement between an IT recruiter and his former employer are unreasonable, the Indiana Court of Appeals ruled Monday in throwing out an injunction that barred the recruiter from similar employment.

An appellate panel reversed and remanded an order from Tippecanoe Circuit Judge Donald L. Daniel granting a preliminary injunction for a West Lafayette firm that specializes in recruiting information technology executives.

In a 27-page opinion, Judge Elaine Brown reiterated the state’s general disfavor of non-compete clauses in employment contracts, the second such opinion handed down by the appeals panel in recent days. In Daniel B. Buffkin v. Glacier Group, 79A02-1302-PL-141, Glacier won a preliminary injunction from the trial court that barred Buffkin, a contract recruiter who had been terminated, from recruiting a range of IT professionals for any company with offices in the United States.  

Terms of the non-compete clause are “certainly excessive to protect Glacier’s legitimate interests,” Brown wrote in the opinion joined by judges Edward Najam and Paul Mathias.

“Based upon the language of the Agreement and the record, and keeping in mind that non-competition agreements are strictly construed against the employer … we conclude that Paragraph 6 of the Agreement, to the extent that it protects a legitimate interest of Glacier, is unreasonable in terms of the activities it prohibits and its geographic restraints. Accordingly, the non-competition covenant in the Agreement was unenforceable,” Brown wrote.

“Glacier failed to meet its burden of showing a reasonable likelihood of success at trial. As a result, the court erred in granting its request for a preliminary injunction.”

Last Monday, the same panel ruled that summary judgment was erroneously granted in favor of a former employer that sought to exercise the non-compete clause in the contract of a former airline mechanic who went to work for another company.

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