The accused Abner Joseph entered into an exclusive agency agreement (EA) with Allstate on or about December 3, 2014. In the contract, he agreed, one year after the termination of the EA contract one year after the termination of the EA contract, not to compete with Allstate from an office or company within a mile of his allstate Exclusive agency, according to Allstate`s complaint. Joseph also agreed that at the end of his EA agreement, all telephone numbers he had used for EA transactions were transferred to Allstate. The legal problem is that a non-compete clause is a restriction on trade and that trade restrictions are generally illegal. I say “general” because most states recognize an exemption for non-competition prohibitions. These states differ only in the size and contours of the exception. Labour professionals can check a non-compete clause before being signed, help you appear in court if you are sued for violating a non-compete clause, or try to get you out of non-competition with a former employer. While Tennessee courts “promote” non-competition prohibitions, the courts still impose it. Timeout for a fast rant. It always bothers me that the courts say that. It is simply wrong to claim that the harm resulting from the violation of non-competitive competition is always “moral” and “difficult to quantify”.
In many cases, the damage will be quite tangible and relatively easy to quantify: the amount of profits the company lost by purchasing a product from its customers from the former employee and not from the company. This led Allstate to believe that after May 31, 2017, Joseph kept hard copies of Allstate customer information in order to compete with Allstate and recruit its customers and potential customers on behalf of its competing insurance agency. Update: See also the interesting review in Gallagher Benefit Services, Inc. v. Richardson, 6:19-cv-00427, 2020 WL 1435111, at 6-7 (E.D. Tex). March 24, 2020), where the court filed an injunction on the insurance agency`s clients who had not left, but refused an injunction with respect to clients who had previously followed to a competitor. The Tribunal justified this decision by the fact that the Agency had not demonstrated its “realistic ability and prospects to recover one of the clients who had already left”. This is a common problem in insurance competition cases.