UNISOURCE WORLDWIDE, INC., Plaintiff, v. CHESTER D. CARRARA, RICHARD W. MCCORMICK, MICHAEL J. MCCORMICK, DANIEL J. CADY, DAVID M. SCHAIDLE, PAUL F. HETMAN, JEFFREY W. LICHTENBERGER, and BRENDA L. BAKER, Defendants., 244 F. Supp. 2d 977

Summary

The employees terminated their employment with the distributor, some of the employees employment contracts with the distributor included covenants not to compete and all contracts included provisions restricting the disclosure of confidential information. The district court found that as applied to the industry at issue (paper and packaging distributors), two years was an unreasonable period of time to impose in a covenant not to compete because the prices, costs, and customer information governing the distributor's operations at any particular time were volatile and subject to change. Therefore, any inside information a former employee may have had upon leaving the distributor would not serve to give that employee a competitive edge for longer than six to 12 months. The court added that any period longer than 12 months was too long for the distributor to impose in a covenant not to compete. Finally, any information concerning the distributor's profit margins, costs, and markups was ...