In Noncompete Battle, Mississippi Worker Down But Not Out

Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...

By Elliott T. Dube

Oct. 14 — A former employee of a Mississippi construction company is using a novel argument to fight the company’s noncompete claim against him—he's a laborer ( Singley Constr. Co. v. Orso , 2016 BL 341767, S.D. Miss., No. 2:15-CV-164-KS-MTP, 10/13/16 ).

Timothy Gonzalez says Mississippi law prohibits the enforcement of noncompete agreements against “laborers” like him. Though a federal judge found Oct. 13 that there isn’t enough support for the argument thus far, Gonzalez could flesh it out as the case goes forward.

Singley Construction Co. sued Gonzalez, who had worked in its Pensacola, Fla., office, for allegedly breaching his employment contract. The company claimed he violated a noncompete provision that said after he left Singley, he couldn’t accept similar work with a competitor within a 350-mile radius of Singley’s home base of Columbia, Miss., for three years.

Singley alleged that Gonzalez went on to work for a direct competitor—Walker-Hill Environmental Inc., which was started by another former Singley employee—within that geographic area.

Judge Keith Starrett of the U.S. District Court for the Southern District of Mississippi denied summary judgment for Gonzalez.

Starrett pointed to the Mississippi Supreme Court’s recognition of the “desirability, even necessity, of protecting the business from loss of customers by the activities of former employees who have peculiar knowledge of and relationships with the employer’s customers.” The judge said it remains unclear whether Gonzalez had such knowledge of and relationships with Singley’s clients.

No Sign Yet of Distinction for Laborers

The Mississippi Supreme Court has held that noncompete agreements are valid if they are “reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.” Gonzalez argued that all noncompete agreements are unreasonable when applied to laborers such as himself.

But Starrett said neither his court’s research nor Gonzalez’s briefing showed that Mississippi law “incorporates a hard and fast distinction between ‘laborers’ and other employees.”

“In fact, barring the enforcement of non-compete agreements against ‘laborers’ would prevent employers from protecting their ‘investment in the training and education of an employee'—another legitimate purpose of non-compete agreements,” the judge said.

Jackson & Arrington PLLC and Scott J. Schwartz PA represented Singley. Mockbee, Hall & Drake PA represented Gonzalez.

To contact the reporter on this story: Elliott T. Dube in Washington at edube@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.