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Adrian v. Howzen

A-1506-96T1 (N.J. Super. App. Div. 1997) (Unpublished)

EMPLOYER-EMPLOYEE; NON-COMPETITION—An employee not bound by a non-competition clause in an employment contract may make arrangements for new employment or for his or her own business provided that the employee may neither solicit the employer’s customers nor compete with the employer. This is so even if the employee, a fitness trainer, is solicited by the employer’s landlord (a country club) and picks up the contract with the country club when the employer’s old contract is not renewed.

A personal fitness trainer provided services for her employer, keeping 80% of the fees and giving 20% to her employer. The trainer’s main source of work came from a local country club with which her employer was negotiating contract renewal. The trainer decided she wanted to form her own company and, after a request from the country club, submitted a proposal to the club which called for her services to be rendered through her own new company. When sued by her former employer, the trial court concluded that, but for the trainer’s actions, the employer’s contract would have been renewed, and stated that the trainer’s actions constituted interference with economic advantage.

The Appellate Division stated the issue to be whether the trainer was precluded, during the term of her employment, from presenting her own proposal to the club for services not to commence until her employment was over. The Court found no preclusion since the trainer’s duties only related to providing services through the end of her contract. The Court found that an employee not bound by a covenant against competition may, while still employed, make arrangements for new employment or the establishment of her own business. The only restriction is that, while still employed, an employee may neither solicit an employer’s customers for her own benefit nor otherwise compete directly with an employer. The nature and character of the act determines whether there has been injury to an employer. The Court found that the trainer did not solicit the club, since it asked her to submit a bid, and that the employer had no right to expect that it could negotiate a renewal with the club free of the trainer’s competition, especially if the club wanted the trainer’s services. The trainer had no obligation to continue working for her employer, and the collateral effect of causing the club not to renew its agreement with the employer was not tortious interference with any contractual right of her employer, since the employer had no reasonable expectation of a continued relationship with the club. There was also no showing of intent to harm, and since there was no protectable right or malice, there was no tortious interference. Accordingly, the judgment was reversed.


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