Wednesday, December 18, 2013

Summits 7, Inc. v. Kelly case brief

Summits 7, Inc. v. Kelly case brief summary
886 A.2d 365 (2005)

Defendant former employee appealed from an order of the Chittenden Superior Court (Vermont) that enjoined her from violating her covenant not to compete with plaintiff former employer. She argued that there was no consideration to support the covenant and that the trial court had failed even to consider whether the geographic scope of the covenant was unreasonably broad.

The employee had been working for the employer for a year, and had received promotions and raises, when she was asked to agree to a covenant not to compete, for a period of one year after termination, in an area that included three states. She eventually left, and went to work for a nearby competitor.


  • The court noted that Vermont had never adopted any rule with regard for consideration required to support a covenant not to compete entered after an at-will employee was already employed. 
  • It decided to adopt the majority rule, which was that, in such a situation, continued employment with an implicit employer good faith obligation was in itself sufficient consideration. 
  • The court declined to address the employee's reasonableness argument, which the trial court had addressed in detail. 
  • Regardless of the propriety of a three-state scope, the place where the employee actually went to work was very nearby indeed. 
  • Moreover, that whole issue had been mooted after passage of a year.
The court affirmed the order and judgment.

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