08 Oct Sodexo Non Compete Agreement
Russell Beck: I would say there has been an overall increase in the use of non-competitive animals over the last 25 years. In line with the Sodexo court ruling, at least one commentator predicts a growing reluctance on the part of the courts to impose barriers to competition in the coming months and possibly years. It notes that the courts were generally less inclined to apply such agreements — and tried more often than usual to find reasons not to apply them — after the 2008 recession, when employment opportunities were limited. Given similar labour market conditions caused by COVID-19, he expects recent and future layoffs to lead to an increase in the number of people working for competitors of their former employers, and he expects the courts to be even more cautious than usual in competition agreements, as they did when the previous recession hit more than a decade ago. Whether you`re contracting an employee, entering into a business relationship with a third party, or buying a business, you`re undoubtedly considering using a non-compete clause to protect your future interests. A non-compete clause is a powerful tool that prevents those who have been in contact with your customer base or your company`s proprietary information from using that information to reverse the trend and become a close competitor in your market. Initially, the parties differ on several diverse facts, which calls into question the fundamental applicability of the non-compete clause to Mr. Abbe`s role in Wellforce. For example, the non-compete clause would only apply if Wellforce was a “customer” of Sodexo during the six months preceding Mr. Abbe`s departure. However, according to the defendants, Wellforce is not and was not a “customer” of Sodexo. Instead, Sodexo entered into a direct contract with Lowell and never provided services to Lowell`s parent company.
Similarly, the parties are arguing fiercely over whether Mr. Abbe`s new role will overlap with his previous one. The defendants assert that he will work at the management and corporate level to implement the broad integration of Wellforce`s four subsidiaries into the healthcare sector. Since it will be at one stage of the day-to-day management of the Aramark contract in a given hospital, its mission will not cover the “Contract Food Services” or “Facilities Management” activity, as defined in the non-competition clause. On the other hand, Sodexo states that Mr. Abbe, at Lowell, will continue to have exactly the same responsibilities on the ground as at Sodexo; The only difference is that the beneficiary of its services will now be Aramark – Sodexo`s direct competitor – due to its new relationship with Wellforce.