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Bluesoft Solutions, LLC v. Biswal

2004 WL 771675 (N.J. Super. App. Div. 2004) (Unpublished)

CONTRACTS; EMPLOYMENT—A restrictive covenant in an employment agreement will be strictly construed, so if it purports to limit a leased employee from working directly for the lessee, it doesn’t mean that if the lessee hires out the employee to a third company, that third company can’t hire the “doubly leased” employee.

An employee leasing company brought foreign nationals into the country as employees and then “leased” them to other firms to work in the information technology (IT) field. The corporation and one such employee entered into an employment agreement that included a restrictive covenant. The covenant barred the employee from going to work for any client of the leasing company for one year after leaving employment. While employed, the employee was placed with one of the company’s clients which also leased IT employees. This company, in turn, placed the employee with a third party company, and during this engagement, the first employee leasing company proposed an amended employment agreement to add the “end-user” to the restrictive covenant. However, the employee refused to sign it.

The employee then went to work for the end-user. The first employee leasing company brought a breach of contract action against its ex-employee and an “intentional interference with economic advantage” action against the end-user. The lower court granted both the ex-employee’s motion and the end-user’s motion for summary judgment.

The Appellate Division affirmed. While the original leasing company may have intended to restrict its employee’s future employment by “end-users,” that intention was not reflected in the plain language of the original, binding agreement. That agreement said “client.” The end-user was not a “client” within the meaning of the covenant.

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