Recent Developments from Around the States

A covenant not to compete that purported to bind a hair stylist was determined to be geographically overbroad, and was modified by the Alabama Supreme Court. King v. Head Start Family Hair Salons Inc., 2004 WL 68617 (Ala. Jan. 16, 2004).

Kathy King worked as a hairstylist for Head Start Family Hair Salon for 16 years. She also served 1 year as a manager at a Head Start shop. Prior to becoming a manager, King signed a non-competition agreement, which barred her from working at a competing business within a 2-mile radius of any Head Start facility for a period of 1 year after her departure.

King left Head Start in 2003, and began working as a manager for a competitor of Head Start that was located in the same shopping center as her old shop. Head Start notified King that she had violated the covenant not to compete by working for a competitor, and by luring employees of Head Start to work with her. King continued to work at the competitor, and Head Start sought a preliminary injunction to enforce the covenant. The trial court granted the injunction.

On appeal, the Alabama Supreme Court scaled back the geographic scope of the covenant. It determined that King should be barred only from working within a 2-mile radius of her last location. In contrast, the preliminary injunction would have prevented King from working in a 2-mile radius from any of Head Start's 30 shops, located in two counties, which was held to be too burdensome a restraint. The court did agree to bar King from recruiting staff from Head Start.

CONNECTICUT

Compelled Self-Publication Does Not Give Rise to Defamation Claim

In response to three certified questions by the Second Circuit, the Connecticut Supreme Court determined that an employee who felt compelled to disclose to prospective employers the basis for his termination was unable to bring a claim for defamation against his former employer. Cweklinsky v. Mobil Chem. Co., 267 Conn. 210, 837 A.2d 759 (Jan. 6, 2004).

Victor Cweklinsky was an employee of Mobil Chemical Co. In November 1998, he was out of work for approximately 6 weeks for corrective surgery on his wrist. In December 1998, Cweklinsky obtained a letter from his doctor clearing him to return to work on Dec. 11, 1998. However, Cweklinsky asked the office manager in the doctor's office to change the date to Dec. 14, despite being scheduled to return to work on December 12 and 13. While the office manager did so on Cweklinsky's copy, the office manager failed to conform the copy in the doctor's office. Upon Cweklinksy's return to work, a human resources manager observed the discrepancies in dates, and after a brief investigation, determined that Cweklinsky had changed the date. He was terminated. (Although the company later found out what had actually occurred, it upheld the discharge because Cweklinsky had taken paid medical leave without a medical basis.)

Cweklinsky brought suit in federal court, and a jury ruled in his favor on defamation and breach-of-contract claims. The basis for his defamation claim was that he felt compelled to disclose to prospective employers the basis for his termination. The company appealed, and the Second Circuit certified question to the Connecticut Supreme Court.

The Connecticut Supreme Court recognized that some courts in other states had held that an employer may be held liable for compelled self-publication because it is foreseeable that the employee will be asked why he or she left a previous position. Thus, if an employee repeats to a third party a statement made by a former employer to that employee, it could give rise to a defamation claim. However, the court rejected this doctrine on public policy grounds.

In coming to this conclusion, the court cited a need for constructive criticism in the workplace, and the need to avoid a chilling effect on communications for employers to employees. Further, the court held that “compelled self-publication” would conflict with mitigation of damages principles, because a plaintiff could increase damages by talking to multiple prospective employers.

ALABAMA

Alabama Non-Competition Agreement Ruled Too Restrictive

A covenant not to compete that purported to bind a hair stylist was determined to be geographically overbroad, and was modified by the Alabama Supreme Court. King v. Head Start Family Hair Salons Inc., 2004 WL 68617 (Ala. Jan. 16, 2004).

Kathy King worked as a hairstylist for Head Start Family Hair Salon for 16 years. She also served 1 year as a manager at a Head Start shop. Prior to becoming a manager, King signed a non-competition agreement, which barred her from working at a competing business within a 2-mile radius of any Head Start facility for a period of 1 year after her departure.

King left Head Start in 2003, and began working as a manager for a competitor of Head Start that was located in the same shopping center as her old shop. Head Start notified King that she had violated the covenant not to compete by working for a competitor, and by luring employees of Head Start to work with her. King continued to work at the competitor, and Head Start sought a preliminary injunction to enforce the covenant. The trial court granted the injunction.

On appeal, the Alabama Supreme Court scaled back the geographic scope of the covenant. It determined that King should be barred only from working within a 2-mile radius of her last location. In contrast, the preliminary injunction would have prevented King from working in a 2-mile radius from any of Head Start's 30 shops, located in two counties, which was held to be too burdensome a restraint. The court did agree to bar King from recruiting staff from Head Start.

CONNECTICUT

Compelled Self-Publication Does Not Give Rise to Defamation Claim

In response to three certified questions by the Second Circuit, the Connecticut Supreme Court determined that an employee who felt compelled to disclose to prospective employers the basis for his termination was unable to bring a claim for defamation against his former employer. Cweklinsky v. Mobil Chem. Co. , 267 Conn. 210, 837 A.2d 759 (Jan. 6, 2004).

Victor Cweklinsky was an employee of Mobil Chemical Co. In November 1998, he was out of work for approximately 6 weeks for corrective surgery on his wrist. In December 1998, Cweklinsky obtained a letter from his doctor clearing him to return to work on Dec. 11, 1998. However, Cweklinsky asked the office manager in the doctor's office to change the date to Dec. 14, despite being scheduled to return to work on December 12 and 13. While the office manager did so on Cweklinsky's copy, the office manager failed to conform the copy in the doctor's office. Upon Cweklinksy's return to work, a human resources manager observed the discrepancies in dates, and after a brief investigation, determined that Cweklinsky had changed the date. He was terminated. (Although the company later found out what had actually occurred, it upheld the discharge because Cweklinsky had taken paid medical leave without a medical basis.)

Cweklinsky brought suit in federal court, and a jury ruled in his favor on defamation and breach-of-contract claims. The basis for his defamation claim was that he felt compelled to disclose to prospective employers the basis for his termination. The company appealed, and the Second Circuit certified question to the Connecticut Supreme Court.

The Connecticut Supreme Court recognized that some courts in other states had held that an employer may be held liable for compelled self-publication because it is foreseeable that the employee will be asked why he or she left a previous position. Thus, if an employee repeats to a third party a statement made by a former employer to that employee, it could give rise to a defamation claim. However, the court rejected this doctrine on public policy grounds.

In coming to this conclusion, the court cited a need for constructive criticism in the workplace, and the need to avoid a chilling effect on communications for employers to employees. Further, the court held that “compelled self-publication” would conflict with mitigation of damages principles, because a plaintiff could increase damages by talking to multiple prospective employers.