There were so many inadequacies in the covenant not to compete at issue in Accelerando, Inc. v. Relentless Sols., Inc., 2025 NCBC 29. that Chief Judge Robinson wasted little ink in dismissing Plaintiff’s claims resting on the non-compete.
The most glaring flaw in the non-compete signed by Defendant Yoder, Plaintiff’s former Vice-President of Platform Services, was that it tried to prevent him from competing “directly or indirectly”
Veteran readers of this blog know, from a post two years ago that Business Court Judge Earp ruled in Prometheus Group Enterprises, LLC v. Gibson, 2023 NCBC 23 that:
Opinions from the Court of Appeals and the Business Court have been “routinely refus[ing]” to enforce covenants with that language, calling it “particularly problematic” and “unreasonably broad” for the last few years.
Op. ¶35.
Judge Robinson focused heavily on the “directly or indirectly” language in dismissing the covenant not to compete claims, but observed some other language in the covenant which he found vague and unclear.
First was the lack of definition of the “services” which Yoder was prohibited from providing to a competitor. Plaintiff argued that “services” meant “only those same services Yoder provided while employed by Plaintiff, but the lack of that kind of limiting definition rendered the language “overbroad” and “failed to put Yoder on notice of what services he is prohibited from providing.” Op. ¶48.
The restriction was also vague as to which of the Plaintiff’s “customers, clients or accounts” its former employee was prohibited from serving. Chief Judge Robinson said that it was unclear that it was “limited to those customers, clients, and accounts who were serviced by Plaintiff specifically during the period of Yoder’s employment.” Op. ¶49.
Link to Other Claims Survived Dismissal Other Claims Survived Dismissal
Yoder did not walk off from his Motion for Judgment on the Pleadings with a slam dunk victory.
Plaintiff will still be pursuing its claims against its former employee Yoder for breach of the confidentiality provision in his Non-Compete Agreement and also for tortious interference with contract.
Next, on the confidentiality claims, Judge Robinson rejected Yoder’s argument that Plaintiff had not sufficiently alleged how he misappropriated trade secret information. Trade secrets claims need to be plead with particularity. Washburn v. Yadkin Valley Bank and Trust Co.
A similarly exacting standard does not apply to a breach of a confidentiality provision. The Court said that:
Plaintiff has alleged both the existence of a valid and enforceable agreement and that Yoder has breached the confidentiality agreement by disclosing to Relentless certain confidential customer information that he forwarded to his personal email prior to concluding his employment with Plaintiff.
Op. ¶54
Plain tiff’s tortious interference with contract claim also survived Yoder’s dispositive motion. Yoder had argued that any interference with Plaintiff’s contracts was justified because the parties were competitors. Chief Judge Robinson agreed that interference could be justified when a plaintiff and a defendant are competitors, “so long as it is carried on in furtherance of one’s own interests and by means that are lawful.”
Op. ¶59.
The conduct alleged of Yoder — that he had contacted Plaintiff’s customers using information covered by the Confidentiality Agreement — was sufficiently unlawful to keep its tortious interference claim alive.