Non-piracy agreement covering agency's clients and prospects ruled enforceable In April 2001, five agency employees asked a circuit court to invalidate a restrictive covenant in their employment agreement. The covenant provided that, upon termination of em- ployment, such an employee shall not solicit the agency's customers or pros-pects for two years.
The employer filed a motion for summary judgment, asserting that the restrictive covenant was a non-piracy provision because it permitted the plaintiffs to compete in the same market, as long as they didn't use the agency's customer information or contact its prospects for two years.
The plaintiffs, on the other hand, asserted that the restrictive covenant was a covenant not to compete that wrongfully foreclosed their ability to earn a livelihood as commercial insurance agents. They argued that the covenant's failure to mention any geographic or territorial limitation and to adequately define or specify the customers encompassed by the restriction rendered the covenant overly broad and unenforceable.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
