Opinion ID: 4511614
Heading Depth: 3
Heading Rank: 2

Heading: Facial Review and Partial Enforcement

Text: In granting the preliminary injunction for CVS, the district court took the facial approach and held that, as written, the Agreement was reasonable and, thus, enforceable. Id. at 236- 6 In his reply brief, Lavin also asserts that barring him from working for PillPack would impose an undue hardship upon him and, at the same time, offend the public's interest in a competitive pharmaceutical industry, factors relevant in assessing reasonableness under Rhode Island law. See R.J. Carbone, 582 F. Supp. 2d at 225. Although Lavin made passing references in his opening brief to his inability to work, he did not develop this argument there, and it is therefore waived. See Lawless v. Steward Health Care Sys., LLC, 894 F.3d 9, 25 (1st Cir. 2018) (holding that arguments advanced for the first time in an appellant's reply brief are deemed waived). - 20 - 37. The court concluded that [t]he non-competition provision in the Agreement is tailored to serve CVS's legitimate interest in protecting its Confidential Information and is reasonable in duration and scope. Id. In reaching this determination, it noted that [t]he Agreement specifically and narrowly defines both what qualifies as 'Competition' and who qualifies as a 'Competitor' to protect its legitimate interests. Id. at 237. We are not prepared, at this preliminary stage of the litigation, and on the record before us, to adopt the district court's conclusion that the Agreement is reasonable on its face. For example, CVS has not explained how the lengthy list of Competitors in the RCA meets the narrow-tailoring requirement of Rhode Island law. However, our analysis under this facial framework does not end simply because we decline to take a position on the Agreement's facial reasonableness. As explained above, Rhode Island has adopted the doctrine of partial enforcement, which permits the enforcement of overly broad covenants to the extent reasonable, so long as there is no bad faith or deliberate overreaching by the employer. Durapin, 559 A.2d at 1058. The district court concluded that this case did not involve deliberate overreaching. CVS Pharmacy, 384 F. Supp. 3d at 237 n.9.7 7Lavin disputes this finding on appeal. But he has not identified any evidence that persuades us that the district court's - 21 - Therefore, even if Rhode Island does require a facial review of a covenant's terms, and even assuming CVS failed such a review here, we conclude that, pursuant to the partial enforcement doctrine, it is reasonable to enforce the Agreement to prevent Lavin from commencing his work at PillPack for the specified duration. That is, even if the Agreement is facially overbroad, an assumption that we make here for the purpose of analysis, the doctrine of partial enforcement permits us to modify the overly broad Agreement and enforce it to the extent reasonable. Here, we conclude that Lavin's new role at PillPack would fall within the bounds of activities prohibited by the Agreement, even assuming its scope needed to be reduced to make it reasonable. We acknowledge that we have found no Rhode Island cases that use the partial enforcement doctrine in this way. Typically, courts interpreting Rhode Island law have used the doctrine to reduce a temporal or geographic restriction that a party is attempting to enforce but that a court concludes is unreasonable. See, e.g., Astro-Med, Inc., 591 F.3d at 14-15; R.J. Carbone Co., 582 F. Supp. 2d at 225-26. For instance, in R.J. Carbone Co., the defendant, Timothy Regan, who had worked as a salesman for Carbone, finding was clearly erroneous. He simply points to earlier noncompetition agreements with fewer restrictions as evidence that CVS deliberately overreached in drafting the agreement at issue here. The bare fact of a broader agreement does not on its own prove overreaching. - 22 - a floral distributor, had signed a covenant not to compete with Carbone for one year within 100 miles of Hartford, Connecticut. 582 F. Supp. 2d at 222. When Regan left Carbone, he went to work for another floral distributor and sold flowers to at least two of his previous customers from Carbone. Id. at 222-23. Carbone sued to enforce the noncompetition agreement. Id. at 223. Applying Rhode Island law, the district court concluded that, although the agreement was reasonable in its restriction on the kinds of activities Regan could perform and the time period for which the restriction would apply, the geographic scope was overly broad -- the 100 mile radius unnecessarily included potential customers to whom Regan never sold, and prior customers to whom he has not recently sold. Id. at 226. Accordingly, the court used the doctrine of partial enforcement to reduce the unreasonable geographic limit. Id. at 226-27. It issued an injunction tailored to prevent Regan from soliciting current Carbone customers with whom he had worked in his assigned sales territory, rather than with a general geographic limitation. Id. Stated more generally, the court refused to enforce the full scope of the agreement, as Carbone sought, and instead partially enforced it, delivering only some of the relief to Carbone that it requested by actually modifying the terms of the agreement. - 23 - The case before us does not fit this model and, thus, the applicability of the partial enforcement doctrine is less straightforward. Unlike in Carbone, we are not modifying or narrowing a term of the Agreement so that it can be enforced reasonably. Nor are we delivering only part of the relief CVS seeks. Rather, we are using the partial enforcement doctrine to conclude that any potentially unreasonable aspects of the Agreement do not prevent CVS from winning the full relief it seeks based on the narrowest aspects of the Agreement as written.8 Strikingly, when used in this way, the partial enforcement doctrine mirrors an as-applied approach.9 8 For instance, even if we were to hold that the full definition of Competitor is unreasonable, the partial enforcement doctrine would allow us to strike the offending aspects of the definition and retain those that are reasonable. The remainder of a modified definition would include PillPack, given its direct competition with the division of CVS in which Lavin worked. 9 Judge Selya criticizes the as-applied approach because he thinks its similarity in this case to the partial enforcement analysis suggests that the two are mutually exclusive. In his view, this means that the as-applied approach cannot be correct because that approach would render superfluous the doctrine of partial enforcement and irrationally do away with its prerequisites -- a showing that the restrictive provision was not the result of bad faith or deliberate overreaching. Although in a much more circumscribed way, we think there could still be room for the application of the partial enforcement doctrine under the as-applied approach. For example, if the covenant at issue here precluded Lavin from engaging in Competition for ten years, rather than eighteen months, we might conclude that the lengthy temporal restriction makes the Agreement unreasonable, even using the asapplied approach. However, the partial enforcement doctrine would allow us to enforce the Agreement to prevent Lavin from taking his job but for less than the full ten years, as written in the - 24 - We are confident that using the partial enforcement doctrine in this way is consistent with the principles articulated in the Rhode Island cases that employ this doctrine -- that courts in equity should enforce agreements to the extent reasonable -- such that CVS wins, even if Lavin is correct that reasonableness must be assessed facially. Nonetheless, because we have found no cases using the doctrine as we have, we hesitate to conclude that this is the analytical framework -- rather than a straightforward as-applied approach -- that a Rhode Island court would employ if presented with a case of this kind. We recognize that, as we have undertaken them here, these two approaches look alike in many respects. However, as we have suggested, the facial and as-applied approaches can diverge significantly. Typically, facial review would require an exhaustive inquiry into the reasonableness of all aspects of an agreement, even those not directly at issue -- an inquiry we have omitted here only by assuming unreasonableness. There is another significant distinction: the partial enforcement doctrine can be used only after a court confirms that there has been no bad faith Agreement. That said, we do acknowledge that the as-applied approach would reduce the role of the partial enforcement doctrine and also permit employers to enforce covenants without first showing that a covenant is reasonable as a whole or, at a minimum, not the product of bad faith or overreaching. As we have expressed, these policy concerns, as reflected in decisions of the Rhode Island Supreme Court, are what give us pause about embracing the as-applied approach outright. - 25 - or deliberate overreaching. Although that consideration does not, as we explained, change the outcome in this case, it might in others. Thus, we leave it to the Rhode Island courts to clarify which doctrinal framework is correct when, like here, a party seeks relief based on the narrowest aspects of a broad agreement.