A Contract is a legally enforceable agreement provided the following elements are present: 1. Purpose 2. Agreement 3. Legal Capacity 4. Act (Promise to Perform) 5. Consideration 6.
Execution in proper form The employment contract signed by Donadio and Connolly contained the following clauses to which they agreed when they voluntarily signed the contract. o "Subject Invention" is any invention, improvement or discovery of the Employee and which arises out of business activities at Markham. "Proprietary Information" is any secret or private information concerning Markham's design, manufacture, use, purchase or sale of materials and products. o All Subject Inventions and Proprietary Information shall remain the sole and exclusive property of Markham. o Employee has to execute all documents requested by Markham for vesting in Markham the entire right, title and interest to all Subject Inventions and Proprietary Information. This obligation did not expire with the termination of employment and the employee would be reasonably compensated for performance of acts after termination.
o All documents, records, models, prototypes of Subject Invention and Proprietary Information shall be the sole property of Markham and shall be surrendered to Markham upon termination. o An employee during his employment or thereafter will not divulge or use for his own benefit or that of another's any Proprietary Information. Unless authorized in writing by an officer of Markham or if the Proprietary Information has passed into public domain other that as a consequence of the Employees own acts. Donadio and Connolly's defences: Donadio and Connolly's lawyers claimed that firstly the contract did not have a non-compete clause in it which allowed Donadio and Connolly to quit their job's with Markham and start their own firm in this case CVD Incorporated. It was also their contention that since their employment contract with Markham did not allow for them to use their general knowledge, skills and experience acquired at Markham, the contract should be considered as contrary to public policy thus unenforceable. Markham's accusations: Markham's lawyers claimed that the employment contract signed by Donadio and Connolly with respect to Markham's inventions and proprietary information were valid, binding and reasonable.
Donadio and Connolly occupied positions of trust for several years at Markham for which they were more that adequately compensated and it was their duty as agreed by them in their employment contract not to use or disclose Markham's trade secrets or confidential information gained during the course of their employment at Markham. CVD Incorporated's business plan as setup by Donadio listed eighteen different domestic and international commercial companies but also included a list of thirty five government agencies that would be their prospective clients. Donadio's knowledge of prospective clients for Z nSe and Zus was acquired from his twenty years service at Markham's as the domestic and international infrared materials marketing manager. My Decision Markham's employment contract did not have a non-compete clause. A non-compete clause would be considered as enforceable only for a reasonable period. Donadio and Connolly did not violate any clause in the employment contract by starting a new business in direct competition with Markham.
Markham's employment contract with Donadio and Connolly restricted the use of Markham's proprietary business information, subject inventions, customer's list, and developments in techniques of manufacturing and furnace designs by an employee during and after the term of their employment with Markham. Every organization has the right to protect and keep secret its business information, but to restrict an employee from using the knowledge and skills to seek employment in similar business is definitely against public policy. Markham had made developments and improvements in their manufacturing techniques and processes but these had passed into public domain in the form of government reports released by Markham and some were commonly known and practiced in the industry. Also Markham did not make reasonable efforts to protect the confidentiality of these developments and improvements for them to be considered as trade secrets. As a member of the jury on this case, I would vote against Markham claims of breach of employment contract by Donadio and Connolly.