Elena's Movie Review Madness

Reviews from my 11-year old mind!

In Lapidus v. Lurie LLP, A17-1656, 2018 WL 3014698 (Minn. Ct. App. On June 18, 2018), the Minnesota Court of Appeals upheld a district court`s $2.2 million in damages against a former partner at a well-known accounting firm for breaching a non-compete obligation he had entered into in connection with his retirement and in exchange for significant retirement payments. although it was found that the lower court erred in applying the “Commercial Transaction Standard”. The Court of Appeals reiterated that “Minnesota law recognizes two types of non-compete provisions: those arising from employment contracts and those resulting from the sale of a business.” In the context of an employment contract, the court analyses whether the restrictive agreement is necessary to adequately protect a legitimate commercial interest. See Bennett v. Storz Broadcasting Co., 270 minutes. 525, 534 (minn.

1965). However, in the context of the sale of a corporation, the court considers whether the restriction on securing acquired goodwill is reasonable, whether it represents an unreasonable constraint on the Covenantor, and whether it has a negative impact on the public interest. See Bess v. Bothman, 257 N.W.2d 791, 795 (minn. 1977). Here, the district court “blurred the lines between the two criteria and incorrectly applied the `business transaction standard`” by analyzing Bennett`s test with “less control” based on the sophistication and equal bargaining power of the executive. However, the Court of Appeal concluded that this was a harmless error, since the District Court had carefully considered the executive`s non-compete obligation and had drawn detailed conclusions regarding the adequacy of the non-compete obligation. What is a “legitimate employer interest” in a non-compete obligation? To be enforceable under Minnesota law, a non-compete obligation must serve a legitimate interest of the employer.

Minnesota courts have recognized three types of employer legitimate interests: (1) protecting the employer`s confidential information and/or trade secrets; (2) protection of the employer`s goodwill and client relations; and (3) specialized training. .

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