Sam Adams Beer Company recently filed a lawsuit in Massachusetts against a salesman who it alleges went to work for a competitor in California. The case illustrates the importance of a venue provision in an employment contract, which we recently discussed here.
California is downright hostile when it comes to non-solicit and non-compete agreements for employees. The defendant employee went to work for a California beer maker and lives in California, but his employment agreement with Sam Adams provides for venue in the state of Massachusetts, as well as a choice of law provision for Massachusetts law. The Complaint alleges:
The Employment Agreement is governed by Massachusetts law. Paragraph 12, the governing law clause, provides that the “validity, interpretation and performance of this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.
The Agreement further provides that “Any dispute between Employee and the Company shall be litigated exclusively in the state or federal courts of The Commonwealth of Massachusetts, to whose jurisdiction Employee hereby agrees to submit.
Of course, this puts the employer in the position of trying to enforce a non-compete against an out-of-state employee. That said, Sam Adams also sued the new California employer as well which pragmatically will make enforcement easier.
The complaint is interesting because it focuses upon the inevitable disclosure doctrine. It alleges that former employees had been exposed to proprietary information , including business strategies, that he will inevitably disclose during his employment with his new employer.
This is another example of a post-employment covenant with a salesperson, this time in the adult beverage industry. We will continue to monitor this case.