New Jersey Appellate Court Affirms No Damages Award Against Individual Defendants In Non-Compete Case

A New Jersey jury decided that two individual defendants violated their non-competition contractual commitments but that they owed no damages.  The trial court then denied the former employer’s motion to enjoin the individuals from continuing to compete.  A few days ago, the State’s Appellate Court held that there was a plausible explanation for these several results and affirmed.  Miles Technology, Inc. v. Apex I.T. Group, LLC, Case No. A-3453-11T4 (NJ App. Court, 4/5/13).

Former employer’s first lawsuit.  Yetter, an employee of Miles Technology, signed a contract prohibiting him from providing competitive services to Miles’ customers for two years after his employment terminated.  Yet, almost immediately after resigning from Miles and acknowledging his obligation not to compete, he went to work for Miles-competitor Apex I.T. Group and began soliciting his former employer’s customers.  Miles sued Yetter and Apex.  The suit was dismissed without prejudice, however, when Apex’s counsel wrote Miles’ lawyer that Apex had fired Yetter. 

Former employer’s second lawsuit.  Shortly following the dismissal, Apex rehired Yetter and then hired Tavares, another Miles Technology employee who also had signed a non-compete.  On behalf of Apex, Yetter and Tavares solicited two of Miles’ customers, and Apex obtained an order or two from one while the other moved all of its business to Apex.  Miles filed a second lawsuit.  Yetter and Taveres were charged with breach of contract, and Apex was accused of intentional interference with (a) non-compete contracts, and (b) prospective economic advantage.  Miles sought hundreds of thousands of dollars in compensatory damages, as well as an injunction against the individuals and punitive damages from Apex. 

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