Opinion ID: 4
Heading Depth: 3
Heading Rank: 1

Heading: 2d 262, 266-67 (N.H. 1991).1

Text: 1 Both parties note a single case in which the New Hampshire Supreme Court addressed a superficially similar attempt by an employer to enforce a covenant not to compete to prevent an employee from working for a competitor in a narrow field, upholding a district court's determination that the noncompetition agreement -6- New Hampshire courts have, however, articulated general criteria by which we may assess ANSYS's claims: To determine whether a restrictive covenant ancillary to an employment contract is reasonable, we engage in a three-part inquiry: first, whether the restriction is greater than necessary to protect the legitimate interests of the employer; second, whether the restriction imposes an undue hardship upon the employee; and third, whether the restriction is injurious to the public interest. ACAS Acquisitions (Precitech) Inc. v. Hobert, 923 A.2d 1076, 1084 (N.H. 2007). A covenant that fails any one of these criteria is unreasonable and unenforceable. Merrimack Valley Wood Prods., Inc., 876 A.2d at 762; see also id. at 763-64 (affirming that an agreement that broadly barred an employee from working with any client who had transacted business with his employer in the past year was unenforceable, reasoning that it went far beyond the defendant's sphere of customer goodwill, and was more restrictive than necessary to protect the plaintiffs' legitimate interests). New Hampshire courts have further clarified that employers' at issue was enforceable. See ACAS Acquisitions (Precitech) Inc. v. Hobert, 923 A.2d 1076, 1089 (N.H. 2007). However, ACAS relied on a variety of facts not presented by this case. Id. at 1087-89. Moreover, to the limited extent that ANSYS relies on ACAS, it mischaracterizes the court's holding. The court did not, as ANSYS suggests, presume[] irreparable harm from the presumed use of . . . information. Instead, it cited specific evidence that the defendant intended to use his knowledge learned at [plaintiff's company] to help his new employer, id. at 1083, 1085 (internal quotation marks omitted), and affirmed the district court's holding that the defendant's use and disclosure of . . . information to or for the benefit of [his new employer] has caused, and will continue to cause, the plaintiff harm, id. 1087. -7- legitimate interests include trade secrets that have been communicated to the employee during the course of employment and confidential information communicated by the employer to the employee, but not involving trade secrets. Syncom Indus., Inc. v. Wood, 920 A.2d 1178, 1185 (N.H. 2007). Whether ANSYS's construction of the noncompete clause was reasonable–-that is, whether it went no further than was necessary to protect its legitimate interests, imposed no undue hardship on Dr. Caraeni, and was not inconsistent with the public interest--all involve policy choices that have not been explicitly decided in this context by the New Hampshire courts or legislature. Absent such guidance, we cannot say ANSYS has clearly demonstrated its likelihood of success on the breach of contract claim, nor can we conclude that the district court abused its discretion by finding that ANSYS had failed to make this showing. We also cannot say that the district court abused its discretion when it found ANSYS had not shown the likelihood of irreparable injury. ANSYS's claim that its showing of breach was sufficient to show irreparable harm again assumes that the covenant not to compete is enforceable. In any event, we reject ANSYS's suggestion at oral argument that because of the difficulty of proving damages from breach of the covenant, as opposed to damages from the actual use of confidential material, we should deem its remedy at law inadequate. We further reject its related claim that -8- this alleged inadequacy would justify equitable relief for breach of the covenant without any showing of injury. New Hampshire law has not adopted that approach. As to the district court's analysis of ANSYS's injury, we will accept arguendo that Dr. Caraeni had access to confidential proprietary information. The district court concluded that even were that so, Ansys has failed to demonstrate that [Dr. Caraeni] is likely to use that [confidential] information during the course of his employment at CDNA. This conclusion was based on factual findings, which we cannot set aside unless they constituted clear error. E.g., McClure, 386 F.3d at 41. The district court explained that it found credible the testimony of Dr. Wayne Smith, who is the general manager of CDNA. In particular, the court accepted three aspects of Dr. Smith's testimony: (1) that CDNA maintains and enforces a strict policy preventing its employees from using confidential and trade secret information they may have acquired from prior employers; (2) that Dr. Caraeni had not been assigned and, in the near term (that is, to the May 2010 date for expiration of the one-year period since his departure from ANSYS), will not be assigned to perform any work at CDNA that might allow him to use any of ANSYS's confidential or trade secret information; and (3) that any trade secret or confidential information Dr. Caraeni had acquired at ANSYS would not be useful to work on CDNA's CFD software because of -9- the different architecture of the two companies' respective software codes. ANSYS, Inc., 2009 WL 4403745, at . ANSYS emphatically attacks the third of these findings in particular and urges that it constitutes clear error.2 Even if there were reason to be skeptical of the third finding--after all, CDNA chose to hire Dr. Caraeni for reasons that may have included what he learned in his prior employment--that would not make the finding clear error. More pertinently, the district court reasoned Dr. Caraeni would not perform any tasks that might require confidential information he had obtained at ANSYS. The court's first two factual findings support its conclusion, and we cannot say that they were clearly erroneous. There is no need to discuss the myriad other arguments the parties have pressed.