Opinion ID: 204041
Heading Depth: 4
Heading Rank: 2

Heading: Changes in Plant's Employment

Text: Defendants next contend that after Astro-Med hired Plant, it made material changes in his employment, which voided the non-competition provision. They note that Plant's job changed in 2004 from product specialist in Rhode Island to salesperson in Florida, and in 2006, Astro-Med substantially reduced his sales territory. Regarding the job change, defendants point out that the introductory paragraph of the employment agreement states that it applies only to employees involved in the design, development or manufacture of products for the Company. Defendants argue that once Plant became a salesman, this definitional language did not apply to him. Turning first to material change, defendants cite AFC Cable Sys. Inc. v. Clisham, 62 F. Supp. 2d 167 (D. Mass. 1999) (applying Massachusetts law), for the proposition that a change in an employee's job can void a non-competition agreement. It is apparently correct that under Massachusetts law, [e]ach time an employee's employment relationship with the employer changes materially such that they have entered into a new employment relationship a new restrictive covenant must be signed. Lycos, Inc. v. Jackson, No. 2004-3009, 2004 Mass. Super. LEXIS 348 (Mass. Super. Ct. Aug. 24, 2004). The genesis of the Massachusetts material change rule is F.A. Bartlett Tree Expert Co. v. Barrington, 233 N.E.2d 756 (Mass. 1968). However, as interpreted in Massachusetts, in both Bartlett Tree and AFC Cable Systems, the court found that the conduct of the parties clearly showed that they had abandoned and rescinded by mutual consent the earlier employment agreement containing the pertinent non-compete provision and had entered into a new employment relationship that included no such non-compete provision. Intertek Testing Servs. N.A., Inc. v. Curtis-Strauss LLC, No. 98-903-F, 2000 Mass. Super. LEXIS 354, at  (Mass. Super. Ct. Aug. 8, 2000). Further, in both cases, the employer provided the employee with a new employment agreement, which the employee refused to sign. Id. at ; see Iron Mountain Info. Mgmt., Inc. v. Taddeo, 455 F. Supp. 2d 124, 133 (E.D.N.Y. 2006) (applying Massachusetts law and stating that [i]n determining whether there has been a material change to the employment relationship, courts have considered it extremely significant that the employer sought to have the employee sign a new non-compete agreement). The question, according to Intertek, is whether the employment agreement had been mutually abandoned and rescinded. Intertek, 2000 Mass. Super. LEXIS 354, at ; Slade Gorton & Co. v. O'Neil, 242 N.E.2d 551, 554 (Mass. 1968) (describing the question as whether the contract was abandoned or superseded by the conduct of the parties prior to [the employee's] resignation); Bartlett Tree, 233 N.E.2d at 587 (observing that changes in the employee's remuneration and sales area, memorialized in a new contract that the employee refused to sign, strongly suggest that the parties had abandoned their old arrangement and had entered into a new relationship). Finally, whether there has been such a modification of a previous agreement, rather than an implied revocation or termination of the agreement as the result of such a subsequent change, depends upon the intention of the parties. ain Mail-Well Envelope Co. v. Saley, 497 P.2d 364, 369 (Or. 1972); see Bartlett Tree, 233 N.E.2d at 587 (noting that parties' conduct subsequent to changes in employee's position was inconsistent with an intention that the original remained in effect). Assuming that Rhode Island would adopt Massachusetts' material change rule, the evidence in this case is insufficient to generate its application. See Elizabeth Grady Face First, Inc. v. Escavich, 321 F. Supp. 2d 420, 424 (D. Conn. 2004) (stating that Bartlett Tree and AFC Cable stand for nothing more than the unremarkable proposition that contracting parties are free to abandon their prior contracts and form new ones, and an intention to do so may be evidenced not only by words or writing but also by the parties' conduct). Plant's job change from product specialist to district sales manager does not reflect a mutual abandonment and rescission of the non-competition provision; there is no suggestion that Astro-Med approached Plant with a new employment agreement; and, there is no evidence of intent on either Astro-Med's or Plant's part to revoke or supersede the employment agreement. Regarding the supposed restriction in the Employee Agreement to work involving design, development or manufacture of products for the Company, defendants' reading of the agreement is much too narrow. The introductory paragraph of the Employee Agreement provides, in part: I am now or am about to be employed by Astro-Med, Inc. . . . and in connection with such employment, I am, may, or will be engaged in work relating to the Company's business, involving design, development or manufacture of products for the Company. On the basis of this recital and in exchange for continued employment and compensation, a signatory of the Agreement, here Plant, makes various promises, including not to compete. The recital cannot fairly be read to apply only to those employees involved in design, development, or manufacture of products for Astro-Med. The subordinate clause, design, development or manufacture of products, describes the nature of Astro-Med's business; it does not limit the type of work an employee must perform at Astro-Med to become subject to the Agreement.