Missouri Court Slams Bouncing Employee - Clients Include Those She Previously Serviced

Posted: Thursday, October 30, 2008

By: David M. Kight

Topic: Non-Compete Cases

In a bizarre case, the Missouri Court of Appeals has handed a defeat to an employee with a history of bouncing between employers and suing them.  Naegele v. Biomedical Systems Corp., ---S.W.3d---, 2008 WL 4709896 (Mo.App. 2008).  In this case, Naegele worked for a company - Matria Health Care - until 2004.  She had a non-compete agreement with Matria.  Naegele left to work for a competitor, Biomedical.  Upon leaving, she sued Matria for a declaratory judgment that the non-compete was unenforceable.  The case was settled and Naegele began servicing in territories previously restricted by her Matria agreement.

After she began work at Biomedical, she signed a non-compete with Biomedical.  Eight months after signing her non-compete, Naegele announced she was returning to Matria.  Naegele - as before - filed suit to have her non-compete voided.  Biomedical counterclaimed for breach of its agreement. This suit, against Biomedical, however did not get settled.

The trial court dismissed Naegele's suit and granted a permanent injunction for Biomedical.  Naegele appealed arguing that Biomedical could not protect customers she had serviced before she worked at Biomedical who came with her to the company.  In what appears to be the first state case to rule on this issue, the Missouri Court of Appeals held that an employer had an interest in all of its customers regardless of their source.  "Biomedical had a legitimate business interest in restraining Naegle from pursuing those customers with whom she developed or strengthened a relationship while working for Biomedical, regardless of whether those customer contacts orginated with Naegele while she worked there." 

Note:  It is unusual for an employee to bounce back and forth between employers, and more unusual to see the employing suing both to exit from the non-compete agreement.  An interesting case to say the least, but certainly a positive one for employers in Missouri.