In a Massachusetts Lawyers Weekly article reporting the decision of the U.S. Court of Appeals for the First Circuit, EMC Corporation v. Arturi, et al., in which the First Circuit determined that an employer cannot equitably extend a noncompetition covenant after its expiration and instead is left with a damages remedy alone, Christopher R. O'Hara of Todd & Weld lent his expertise to the discussion and analysis of the First Circuit's ruling. The plaintiff employer, EMC Corp., cited five unreported Massachusetts Superior Court decisions. Mr. O'Hara was counsel to the employer in one of those cases: Oxford Global Resources v. Consolo, 16 Mass. L. Rptr. 415 (Super. Ct. June 6, 2003)(Botsford, J.).
“There is a legal landscape in Massachusetts where trial court judges are willing to extend covenants based on the [bad] behavior of [departing] employees,” said Mr. O'Hara. In Oxford, following actions by the departing employee in violation of the employee's post-employment restrictive covenants, and before the restrictive covenants had expired, Mr. O'Hara successfully argued for an equitable tolling of the restrictive covenants based upon the theory that the employer “had not received the benefit of the bargain with its employee.”
Mr. O'Hara observed that, consistent with the First Circuit's ruling in EMC Corp. v. Arturi, “the notion of restarting [restrictive covenants] after the expiration of an agreement is probably not a compelling case.” The EMC Corp. v. Arturi decision was authored by retired Supreme Court Justice David H. Souter who was sitting in the First Circuit by designation.
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