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'Independent Covenant' Language
It is a defense that has become perfunctory in restrictive covenant litigation ' “my former employer is barred from enforcing the restrictive covenant because it committed a prior breach of the agreement!” Most often, the former employee will claim that the former employer breached the employment agreement by failing to pay wages, salary, bonuses or other sums, which renders the entire employment agreement, including the restrictive covenant, unenforceable. When such a defense is raised, an injunction hearing that should focus on the former employee's wrongful post-employment conduct instead often digresses into a hearing at which an argument about what compensation agreement existed and whether the former employer breached that agreement takes place instead.
By the end of injunction hearing, the former employee has often successfully muddied the water enough that the former employer has not established a “substantial likelihood of success on the merits” on its restrictive covenant claim, a showing that is generally required for entry of an injunction.
The above scenario plays out time and again in courts around the country. Yet, by simply incorporating a clear and unambiguous “independent covenant” or “severability” provision in the restrictive covenant agreement, an employer may be able to avoid the “prior breach” defense altogether and be on its way to the injunction to which it is entitled.
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