Litigation

Eighth Circuit Awards Former Employee Damages Under Noncompete Agreement

By H. William Allen et al.

It is rare that a former employee wins damages based on a noncompete agreement, but that is what happened in Bannister v. Bemis Co., Inc., No. 08-1634 (2/25/09).

Bemis had a noncompete agreement with Bannister that prohibited him from working for a Bemis competitor for 18 months after his employment with Bemis ended. The contract stated that, if he was unable to get employment because of these provisions, Bemis would pay him his monthly base salary during the 18-month period. After Bannister quit, he applied for the monthly payments. Bemis refused, saying it had released him from the contract as to all competitors except Mondi Packaging. Bemis had a separate contract with Mondi that prohibited them from hiring away Bemis employees.

The Eighth Circuit held that the contract does not provide for the partial release that Bemis attempted. Once Bemis chose to enforce the contract as to Mondi, it was obligated to pay Bannister his monthly salary. The court affirmed the judgment of $81,051.36.

Full post as published by Arkansas Business Litigation Blog on February 26, 2009 (boomark / email).