With the advent of the Internet, advances in computer technology, improved telecommunications, and easy-to-access air travel, Minnesota courts appear to be relaxing the requirement for adequate geographic coverage for non-competes. In today`s economy, employees can cause competitive damage thousands of miles away with a single phone and computer. In CPI Card Group, Inc. v. Dwyer, 294 F.Supp.3d 791 (D. Minn. 2018), the court granted rights of omission to the applicant employer who had sued his former employee and his new employer, a competitor, for breach of contract and unlawful interference with contractual rights. Dwyer, a former principal of the main account, was subject to a one-year competition, debauchery and confidentiality agreement (“non-compete”) with his employer CPI Card Group (“CPI”). Unbeknownst to CPI, Dwyer secured a job and signed an employment contract with CPI`s multi-Packaging Solutions (“MPS”) competitor before resigning from CPI.
MPS was aware of Dwyer`s competition bans. While staying a few months at CPI to assist transition clients, Dwyer shared the names of CPI`s clients and details of CPI`s business relationship with MPS. Dwyer also negotiated with CPI an amendment to its non-compete clause that removed its non-compete obligations and significantly limited its requirements for a ban on debauchery. Dwyer kept MPS informed of the progress of the negotiations, while CPI was not aware of MPS`s participation. In granting CPI`s request for omission, the court found that Dwyer had breached its non-compete clause before signing the amendment by transmitting confidential information to his personal email address minutes before his resignation and by sharing confidential information directly with MPS. The court also found that CPI had a probability of success in demonstrating that the modification had been obtained fraudulently and was therefore invalid. In this case, these are classic elements of a case of unlawful competition: (1) The manager has sent documents by e-mail to his personal e-mail account; (2) The officer did not tell the truth about what he is doing, and (3) the former employer conducted a forensic computer search and discovered his activities. .
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