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COA: Restrictive covenant is overly broad and unreasonable

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The restrictive covenant a former employee of a high-end appliance sales company signed before leaving to join another high-end sales company is overly broad and unreasonable, the Indiana Court of Appeals affirmed Thursday.

Clark’s Sales & Service Inc. appealed the order denying its motion for a preliminary injunction as to the restrictive covenant Clark’s sought to enforce against former employee, John D. Smith, and his new employer, Ferguson Enterprises Inc. Smith worked for Clark’s for nearly 14 years before joining Ferguson, which also sells high-end appliances, but principally sells plumbing and lighting.

The trial court found the covenant to be overly broad and restrictive because it prevents Smith from working directly or indirectly in any capacity for any other entity that seeks to solicit or provide services to any entity that was a customer of Clark’s during the 14 years Smith worked there. The Court of Appeals agreed in Clark's Sales and Service, Inc v. John D. Smith and Ferguson Enterprises, Inc., 49A02-1306-PL-552, also finding the geographical scope of the covenant to be unreasonable.

Clark’s contended then that the appeals court should utilize the blue pencil doctrine and strike the portions of the covenant that are unenforceable, leaving in place some of the restrictions.

“Here, Clark’s had a fair opportunity to draft a reasonable and enforceable restrictive covenant yet failed to do so. The overly broad and unenforceable covenant that Clark’s did draft is not clearly separated into divisible parts or severable in terms such that we can mechanically strike unreasonable restrictions and enforce reasonable ones,” Judge Terry Crone wrote. “The restrictions are unreasonable as a whole. Therefore, we conclude that the blue pencil doctrine is inapplicable, as it would subject the parties to an agreement that they did not make.  Accordingly, we agree with the trial court that Clark’s has failed to establish by a preponderance of the evidence its likelihood of success at trial. The trial court’s denial of Clark’s motion for preliminary injunction is affirmed.”

 

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  1. Not enough copperheads here to care anymore, is my guess. Otherwise, a totally pointless gesture. ... Oh wait: was this done because somebody want to avoid bad press - or was it that some weak kneed officials cravenly fear "protest" violence by "urban youths.."

  2. Should be beat this rap, I would not recommend lion hunting in Zimbabwe to celebrate.

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  5. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

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