If You Leave Me Now

Bourbon BuckKentucky Mule

A friend of mine ordered this as a Bourbon Buck. Both are correct as a Buck or a Mule are both cocktails with a citrus, ginger ale/beer, and a spirit. The Moscow Mule is the same cocktail with vodka and a Rum Buck is the same with rum. Here, I used 2 oz bourbon, 1 oz Canton ginger liqueur, 1 oz of lemon juice, and topped off with Ginger Ale, gently stirred over ice. My only regret was not having the copper vessel hers was served in. 

On July 21, the state of Nevada’s Supreme Court affirmed  a district court’s decision that a Non-compete Agreement (NCA) drafted by Golden Road Motor Inn (Atlantis Resort) was unreasonable and, because, they determined, they are not responsible for blue-lining such policies, is wholly unenforceable.

According to testimony and court documents, an employee who signed a non-compete agreement as a condition of employment copied player information from Atlantis, altered it in Atlantis’s database, quit her job, and began work at Grand Sierra Resort (GSR) shortly after, then uploaded the player information against GSR’s own policy. There is no doubt that her actions deliberately defied the letter and spirit of the NCA. Grand Sierra Resort is approximately three miles from Atlantis and her employment with GSR began well within the one year limit. Her actions defied both the NCR and GSR’s policies. So, where did Atlantis go wrong?

According to the Court, the prohibition of the employee from seeking “any employment, affiliation, or service with any gaming business or enterprise” was overreaching. Preventing her from being a host at GSR would have been acceptable, as would any position that would enable her to perform the act she did. However, theoretically, if she desired a job as a cocktail server or valet, that would have been a breach of the NCA. Reno’s reliance on gaming is diminishing, but remains a significant employer in the region.

The Court’s decision to not modify the agreement hails from a 1947 decision between Reno Club Inc. and Young Investment Co where the opinion held that “[t]his would be virtually creating a new contract for the parties which, under well-settled rules of construction, the Court has no power to do.” It effectively puts the onus on the employer to draft a reasonable NCA.

The three common elements that are deemed reasonable are:

  • Time

The length of time deemed reasonable. Each state has its own time table for reasonable non-compete clauses. They can be a year up to five. While lifetime bans have been upheld in court, these are rare and rely heavily on other factors.

  • Distance

Distance is usually dependent on several factors as well. Does the company have any interests within the entire radius? A Chicago-based intrastate freight carrier can certainly impose a state-wide agreement, but as its interests are strictly intrastate, it cannot disallow a driver from seeking employment in Wisconsin. As well, the economic structure of that region is considered. Preventing an individual from seeking employment at a competing resort in Las Vegas, for example, would be difficult to uphold.

  • Scope

As seen in the Golden Road Motor Inn case, the scope of the prohibition needs to be reasonable. A medical equipment salesperson may be prohibited from working for a competing medical equipment supplier, but if she chose instead to sell insurance benefit packages, such a prohibition would likely be unreasonable.

The key, then, is to clearly define the business reason for the agreement. Then drill down on the policy to ensure that it meets that business reason and only that business reason. Have your lawyer review it to make sure it’s water-tight.

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