Roger Morris, who holds a master’s degree in electrical and computer engineering

Question

Roger Morris, who holds a master’s degree in electrical and computer engineering, signed an employment contract with Microguide, a company that designed, manufactured, and sold aviation guidance equipment for use in advanced aircraft. The contract indicated that Microguide would be entrusting Morris, as an employee, with confidential information. To protect its trade secrets, Microguide included a covenant not to compete in the contract. The covenant stated that Morris would not “render services, directly or indirectly, for a period of one year after the termination of my employment with Microguide to any competing organization in connection with any competing product within such geographic limits as Microguide and said competing organization are, or would be, in actual competition.” A few years later, Morris resigned his employment with Microguide and immediately accepted a position with Vitek, Inc., which was essentially Microguide’s only competitor. Microguide’s senior management have sued Morris to enforce the covenant not to compete. How will the trial court judge hearing this case analyze the following questions?

a. Is the covenant not to compete overbroad or unreasonably burdensome to Morris?

b. If evidence indicated that Vitek did not intend to elicit trade secrets from Morris and Vitek had no need for that information, would it be reasonable to enforce the covenant?

c. What reasons would Microguide have for its decision to sue Morris?

Explanation / Answer

No. The covenant is not overbroad or unreasonably burdensome to Morris. Morris was entrusted with vital information of the company's trade secrets. Even if Morris does not intend to furnish the details to the new company it cannot be guaranteed by the word of mouth. Every organization have the right to safeguard their trade secrets and confidential information. Morris might possess certain key informations regarding product differentiation that might be used by Microguide to gain competitive advantage in the industry, which might be used by the competitor to exploit certain market conditions to their own favor. As it is a written covenant Microguide has every right to sue Morris for breaching the contract and to protect their confidential information.

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