Did Time Run Out on Employee's Noncompete?

• Author: Erik A. Christiansen
• Pages: 14-15

Did Time Run Out on

Employee's Noncompete?

By Erik A. Christiansen, Litigation News Assoc iate Editor

Photo Illustra tion by Elmarie Jara © G etty Images

Employers, beware: A noncompet e

agreement wit h a furloughed

employee may not be effective

when the employee is rehired i n

a new position. In R ussomano v. Novo

Nordi sk Inc., an appellate cou rt held

that the clock on a noncompet e agree-

ment began to run whe n the employer

temporarily terminated its employee.

The court concluded t hat the one-year

noncompete agreement had expired ,

and since the employee did not sig n a

new agreement upon bei ng rehired, the

employee was not restricted f rom work-

ing for a competitor. In the wa ke of

this decision, A BA Section of Litigation

leaders recommend t hat employers

redraft noncompetition ag reements to

account for potential c hanges of posi-

tion in the futu re.

Employee Resigns After Being

Thrice Hired and Twice Laid Off

Novo Nordisk, Inc., in itially hired

Russomano on Januar y 25, 2016, as a

Hemophilia Com munity Specialist for

the New Engla nd region. As a condi-

tion of employment, Ru ssomano signed

a noncompete agreement on December

14, 2015. On October 24, 2016,

Novo told Russomano that his p osi-

tion was being elim inated, and he was

laid off on November 18, 2016. Later,

on December 8, 2016, Russom ano

was rehired as a Hemophi lia Therapy

Manager for the Penn West re gion. As

a condition of his rehi ring, Russomano

signed a second one-yea r noncompete

agreement on Dece mber 7, 2016.

Approximately a year and a ha lf

later, on June 20, 2018, Novo sent

Russomano a lett er stating that his

employment would “be eli minated

and his employment [would] end

effective Augu st 3, 2018.” Prior to

his terminat ion, Russomano applied

for open positions in the c ompany

and was offered a dif ferent position

as Senior Hemophi lia Community

Liaison in New York. Novo sent

Russomano a lett er “formally

conrm[ing h is] transfer to the new

© Getty Image s

Published in Litigation News Volume 46, Number 1, Fall 2020. © 2 020 by the American Bar A ssociation. Repro duced with permissi on. All rights reser ved. This informati on or any portion the reof may not be copie d or disseminated in any form

or by any means or stored i n an electronic database o r retrieval syst em without the expr ess written co nsent of the American B ar Association.

14 | SECTION OF LITIGATION