The Noncompete and the Departed Engineer
Priya worked for two years as a systems engineer at Northwind Robotics, a mid-sized manufacturer in a state that enforces reasonable noncompetes. Her employment agreement contained a two-year noncompete covering "any robotics or automation business anywhere in North America," a confidentiality clause, and a clause requiring arbitration of "all disputes arising from employment." Priya resigned in January 2025 and joined a small startup building warehouse sorting robots in the same metropolitan area. Northwind sent a cease-and-desist letter, then filed suit in state court seeking an injunction and damages. Priya's new employer is a 12-person company; Northwind has 400 employees and 60% of the regional warehouse-robotics market. Priya's new role involves designing picking algorithms similar to work she did at Northwind, but she brought no documents and used no confidential information. Northwind now moves to compel arbitration while also seeking a preliminary injunction.
1. Is the noncompete likely enforceable as written? Apply the reasonableness factors a court would use.
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Courts test noncompetes on duration, geographic scope, and scope of activity, balanced against a legitimate protectable interest.
- Legitimate interest: Northwind has a protectable interest in confidential information and customer relationships. But Priya used no confidential information, weakening the case for a broad restraint.
- Duration: Two years is at the outer edge; many courts uphold one year and trim longer terms.
- Geography: "Anywhere in North America" is almost certainly overbroad for a regional manufacturer with 60% regional share. A court would likely blue-pencil it to the metropolitan area or the region.
- Activity: "Any robotics or automation business" sweeps in roles unrelated to Priya's work. Courts prefer limits to the specific competitive line.
- Hardship/public policy: Priya's new employer is a 12-person startup; enforcing a two-year North America-wide bar would effectively bar her from her profession.
Likely outcome: The clause is probably overbroad and unenforceable as written. In a blue-pencil state, the court may reform it to a shorter term and narrower geography; in a "no reformation" state, the whole clause fails. Northwind's strongest claim is confidentiality, but Priya's clean conduct undermines it.
2. Northwind simultaneously moves to compel arbitration and seeks a preliminary injunction. How should the court handle the tension between these requests?
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The two motions pull in opposite directions, and the arbitration clause controls the forum question.
- Arbitration clause scope: The clause covers "all disputes arising from employment." A noncompete dispute over a former employee's conduct ordinarily falls within such broad language. Under the Federal Arbitration Act (if interstate commerce is involved, which a multi-state manufacturer likely satisfies), courts must compel arbitration unless the clause is unenforceable.
- Who decides: Challenges to the contract as a whole generally go to the arbitrator; challenges specific to the arbitration clause go to the court. Priya's best argument is that the noncompete itself is unenforceable, which is a merits question for the arbitrator.
- Injunctive relief: Courts retain authority to issue provisional relief in aid of arbitration - a preliminary injunction preserving the status quo while arbitration proceeds. Northwind can obtain a temporary restraint even though the merits belong to the arbitrator.
- Practical result: The court should compel arbitration and may grant a limited interim injunction only if Northwind shows likelihood of success, irreparable harm, and balance of hardships. Given the likely overbreadth of the noncompete, a broad injunction is unlikely.
Conclusion: Compel arbitration, but allow narrow provisional relief if the equities support it.