restrictive covenant agreements by their acceptance of a restricted stock of war that they received because of their performance in the throw to get something off the table perhaps you'll disagree with this my understanding that clients for whom the employee had not previously worked or service where the client were in the employee was a v p is that right  there there have been many different cases i guess i'll start there with very maybe i didn't i didn't phrase a question very well let me try it this way do you agree that we're not supposed to evaluate the in force ability of customer well under the restrictive cover in a grievance the both of the defendants agreed to there's a non compete provision which would prevent them from working for a competitor in their former territory  think all of the courts that have at least an order agreement i guess when i when i see it that way i'm not thinking about the three days that have been before judge kessler recently found the agreements of the restraint of trade but been for some form of the restrictive covenant related to current clients none of them have been forced to with respect of all prospective clients it's up with those that the defendant learned about  terry to refer a t p where they are at least in part currently working for all of the software to enforce the non solicitation of clients and that would be any a t p clients but with respect to the non attention of prospective clients we are only seeking because we believe it's a reasonable restriction on the agreement only seeking to enforce them from contacting prospective clients that they would have dealt with just restrict competition for the sake of restricting some fish needs to be serving some other goal trade secrets will relationships client relationships the problem is that the court needed them compete on top of all of those things in order to protect trade secrets they already can't disclose goodwill and customer relationships a very protected by saying you can't deal with any of the people you've had relationships with  sure and i think it's looking at varying levels of what the former employee can do with with respect to the competition against the so we've got the first agreement that your reference representative agreement the non disclosure agreement careers they learn about more clients they learn more confidential information from a t v they want to use it better that's when they can qualify for the stock in exchange for receiving the stock or we have the additional restrictions the non what's the causal link here between having worked for eighty and causing cognizable harm to a d p after they leave that that requires the non compete for twelve months for the whole territory for  i think you're right it's probably not the best word goodwill the relationships the former employees have devolved only with customers but with referral sources a lot of times the referrals come in through perhaps an accountant or some other type of referral source that can refer a client who needs a payroll provider or human resources provider those relationships are likely stronger in the fear of tory were they were the employees used to work but these would be relationships that were developed in this case while they were employees of a d p and i think they do have an interest of restricting maybe not the general knowledge you're right the case law doesn't allow that to be clients why should we force them because they're she's not converting her personal goodwill excuse me she's not converting the corporate goodwill that she earned while working for eighty p case it would only be us a portion of her current ultimate territory where we would say she could not work  the the the interest is protecting the confidential information and and and the client relationships there's just different ways of doing it i think that that's the line we need to pursue what is it different ways of doing it a former client or something like that well i'll answer that by making the first name of the that's why injunctions in these cases are so important because a lot of times you don't know we may find out during the course of litigation that a a t p client in these cases left and when calls are met and that the defendant solicited that company you may on rare occasions find out it is in my brief on rare occasions may find out from the client when they leave they may say that they are have decided to leave and go to a particular client or refusing a particular competitor or v you may find out just by were on the street  a referral sources but in many instances it is difficult to find out and when i said that's why the injunction is so important is because that's why the harm that are reliable i don't i i don't know why you pull the injunction the question the why don't we presume that there is a hearing to the agreements until we find out that they're not yet well i guess what i'm asking is is it is it the company's practice that is soon is somebody who signs one of the restrictive come in agreement that you automatically went to court and try to get an injunction against them even before you have any inkling that they're violating those contracts well i can speak to my own my own experience if that is not the practice because once there is a violation well it's more than that and i think there's more than that in the in the declaration that as they as these employees gain experience are going to they're going to learn how to sell a piece products better and then therefore learn how to sell we got the product they're going to learn about pricing strategies product updates things of that nature that they may be able to use against a t t because they know what's coming down the line when they leave of my fall in the category of general experience that you can't really separate from a person or talking about prices of products that's not not something that i think becomes a part of the sales person that they can fact specific i have been doing this work for forty years and every case is different and has to be looked at specifically with regard to the underlying facts when you do that a with the abuse of discretion standard i suggest to this court that will judge the naris and judge checky did clearly overcomes any question of abuse of discretion p is relying particularly on three cases to support its position here before this court that these restrictive covenant agreements are ca's have been enforced and that they should therefore be enforced going forward i submit to this court that there's only one decision that was improvidently decided that has held that the man s decision out of tennessee never addressed the issue of the restrictive covenant being a restraint of trade in jacobs judged the naris did not address the decision as to whether to restrict two thousand it was a restraint in trade so that's really the legal issue we have to decide that was correct was it legal error to say that this restrictive covenant of crme it is a restraint of trade under new jersey  it was not it was never addressed in the prior cases in lynch how can judge martini addressed it but he did so by simply power phrasing judge not only in a civil war ii test but in a community hospital versus more than a restrictive covenants should be limited to protect the legitimate business interests of the employer the covenant should be no broader than is necessary to protect those legitimate interests let's start with easy for what i think is easy for one year that's not true or that's not all ok geographic scope geographic sco might be a place to i suggest that indeed two cases it is not for the following reasons one when you look at rafferty she was what was considered to be a comprehensive services manager she was an overly she had a territory but she could not call the call she could not go out to solicit any clients she didn't need to shit people under her do be had people who would tell her where to go and what to do she was selling one specific limited product if the court were going to and let's take rafferty for a second i'm sorry war mort was selling to a limited market share of a thousand employees i think to five thousand or five isn't above in the greater chicago area and several clients in wisconsin didn't have a territory assigned to her she was given a sales force database with specifically identified cards and ultimate she's a value the ultimate ultimate wants the poacher because ultimate wants to get their hooks into those clients in chicago and in milwaukee ri  except ultimate doesn't fit to take advantage of leveraging the relationships that they had when they were working for a d p in those more if she was selling in the same marketplace doing the same job she did with a d p either one of these people i would suggest ignorance correct but although i'm not sure i agree or disagree with judge moore i think his logic in blue penciling the restrictive covenants to in fact make them territorially restrictive to the job and to the markets socrates was probably appropriate under the circumstances he didn't address the issue he said i don't have to address the issue of whether this is a restraint of trade i can narrow the reste the respective covenant properly and in that case what he did with the three cases before him to narrow the scope hundred fifty employees when he went to ultimate he was selling in a market size in choices but the work its size was employers who had two hundred employees or more so judge moore said we have to limit come forward since lynch out the facts that we have garnered in the thirteen other pending nineteen other cases that have been had and discovered to date to find that the circumstances under which this covenant was required under the incentive stock award effectively sell into the laidlaw category is that all entering employees as a condition of employment restart that would not protect a g p s legitimate business interests if you look at and i think the very relationship that the accountant the next case that developed with the clients that he was assigned to work simply saying you can't work in this territory when you're dealing with only a small business as those a try provided eighty one like we don't have a record to go into the kinds of things you want to do to affirm on the ground ok so you are making a broader argument which is you can never have a territorial non compete because it's always efficient to ban soliciting clients my concern about that is the one that i raised with your adversary over here which is if i'm a d p how do i know when someone is using trade secrets confidential information working with these referral sources etc it's a bit prophylactic but it's very common in new jersey courts have upheld some territorial and temporal restrictions recognizing that we can't sli finely here because they're never going to find out about lobbies why elations let's just ban someone from working in the in the particular market with a particular line of work for a limited period of time and a year seems reasonable now as to how broad that ought to be beavis is point you know when you when you're relying on abuse of discretion as after the leave what you're hoping for is factual findings in the in your favor because we're not going to reverse those unless they're clearly erroneous but it's an abus discretion to apply the wrong legal standard and here we don't have facts what we've got is a contract and we've got a body of new jersey state law and we've got the district court opinion as i read it anyway saying this as you said i think quite wisely and properly informed by your decades of experience to syria i mean these things are facts this is a community that has to employees in the same department working from leaving the same employer going to another place in a a district judge a good trial judge will perhaps blue pencil here agreements differently or perhaps perhaps even force one to not enforce the other is and that's what happened with the cases in the state court in fact were concluded they were on cross motions for summary judgment we have three pending summary judgment motions before the district courts in new jersey the most of these cases when you take the combination of those that these employees were obligated to accept and you look at the circumstances and this is important and this is the distinction i think between lanier says decision and judge martini's decision because those facts were before the court but we presented in certifications to the court that these were only presented to the top sales people those people who could most compete across two problems everybody who came in then that would be ok even though that is more restraining of trade and i'm very concerned about laying out a rule wall that's going to encourage a blunderbuss or shotgun rather than a rifle approach to these agreements i'm not suggesting that if these had been required by all people at the time that they first be in employment then they would not have been potential restraints trained the facts we ha before us however is that somewhere between ten and fifty percent of the best salespeople were compelled to sign these at the time that they received their incentive stock awards there's issue with a restraint this says you cannot solicit business from clients that you have dealt with or obtain valuable knowledge of while working they want to impose this so that see fit to locate we remain the case would not it would depend on the facts of the case and whether or not these people are soliciting clients because of business contacts that they had an abuse of discretion when in the same case i don't call being judge martini this court and this is what concerns me yet indeed in the martini decision this court found that if it was a permanent injunction the r c a may have been overbroad and we probably would have blue pencil bitter changed it but it's only for twelve months and therefore we're not going to make an issue of it maybe just made a compelling argument why this court to provide some guidance to the district courts district court in new jersey and the judges on that is were to implore them to make a fulsome factual record absolutely positive i'm not used or act in any way directly or indirectly in any information which became known to its paragraph for i agrees that during the period commencing the dat question up there might be other referral sources or networks of connections that don't qualify as marketing partners within this is that a legitimate interest of just dish and protection or not if this person learned of that on their own accord without any e those are clearly not legitimate interests they can be protected by restrictive covenant i read it differently that we just crossed it which was general skills general salesmanship how to respond that this is market specific industry specific connections and that doesn't look like a generic blunderbuss restrain trade i would suggest to your honor that if it is a contact enhance the ability of the person to learn then that's not a marketing partner for instance one of the other cases we had i think it was  and those c p a s that he learned of as a result of his specific job at a d c i would suggest are people who could be restricted however if i'm out selling and in my business i simply meet joe says at a optimiser rotary meeting and he happens to be a c p a who refers me a client it has nothing to do with my specific referrals from  at the end of the day isn't the issue for us that we whatever we might think are legitimate we need to anticipate how the new jersey court would treat them and the new jersey supreme court has said in restrain trade it should not be enforced and that's what well narrow this check the judge mcnulty in the district court judge kessler found that the whole purpose this was to restrain trade to keep the best and the brightest salespeople from going out and competing and that the legitimate interests that a d p had were fully protected by the sales representative agreements that were signed when they came in that they could not solicit business from any of the clients with whom they don't and in fact in at least one of the cases the first case that went to decision  dealt with that's a legitimate interest to be protected to have an agreed such as this i think they suggest to the court that unemployment or injunction you have to look at the entire  document when you have you can solicit any clients across the board anywhere in the world regardless of whether you had any involvement with them whatsoever and you can't work in any territories that you may have worked in in company in that case didn't put any protections for its getting employment to protect their confidential information that's not what we have here so all of this we submit starts with a  knowledge of of a few confidential information then when they are provided the additional consideration offer the additional consideration in exchange for the ref to sign more restrictive it i think in his view it's because not everyone has all of these restrictions the agreement isn't forcible and with that i think with the reason you said that would be more anti