workers. For example, courts rarely enforce non-compete agreements against medical doctors, because it would harm society to do so. Here, Ryan’s contract is clearly more enforceable than Brutus’. Ryan is directly competing with his former employer. Ryan is taking business from the former employer. Ryan is using investment made by T&R to his own advantage, which is essentially stealing the investment T&R made, both in Ryan’s professional development and the relationship with the municipality. Before enforcing the contract, the court will generally look at whether the employee is profiting from something Ryan did not make the investment to create. Certainly, Ryan’s good work and relationship management was partially a product of his own investment, not just T&R’s. Even so, Ryan was
being paid to make that investment, whereas T&R was paying for it. In other words, arguably, Ryan was already compensated for his part of the investment. Meanwhile, Ryan is free to practice his business elsewhere and get his own clients. It is unlikely the court will see limitations on direct competition as undue. Next, Ryan and T&R are in a highly competitive business with lots of players. The court will likely not see a non-compete agreement as being unduly harmful to society. Brutus, on the other hand, is not competing with T&R in any way. T&R’s lawsuit against Brutus is weaker, because now, it just looks like T&R just doesn’t want Brutus to make a living at all for himself and wants to deprive the public of his services. Courts will rarely enable this kind of vindictive attitude. The trickier situation is Urban.
West 70 • November 2021 | Towman.com
Urban is competing with T&R and taking its customers. Part of Urban’s new business arises from investments from the former employer. However, the former employer did not really make investments to attain and retain Urban’s clients. Urban developed these relationships entirely on his own, just simply under the banner of T&R. How much T&R’s banner contributed to those relationships is a matter of debate. This situation would need more detail before a court could make a determination, and it may vary state-to-state. Generally speaking, tow companies should engage in practices that minimize these situations (note sidebar). Consult with an experienced lawyer before hiring and training employees. Good practices, in the management of employees and clients, can help avoid these situations.