PHILADELPHIA – December 16, 2019 – A team of Buchanan litigators obtained a significant victory for client, Heraeus Medical, LLC in the Indiana Supreme Court, vacating part of an injunction that had been entered against Heraeus and one of its employees in a wide-ranging restrictive covenant and competition suit.
The lawsuit arose following Heraeus Medical hiring five employees from its competitor, Zimmer Biomet, with Zimmer alleging that the employees were violating restrictive covenant agreements. An Indiana state trial court entered an injunction against Heraeus Medical and two of the employees, in part enforcing a covenant that prevented the employees from soliciting other Zimmer employees.
Heraeus Medical appealed, arguing that this provision was overbroad and unenforceable because it prohibited solicitation of every Zimmer employee, including truck drivers and others with no access to confidential information. The Indiana Court of Appeals found the non-solicitation covenant to be overbroad, but revised the provision by adding language that made the provision narrower and, thus, enforceable.
In a unanimous opinion handed down on December 3, 2019, the Indiana Supreme Court reversed, holding that the non-solicitation covenant was overbroad and unenforceable. The Supreme Court held that the Court of Appeals had erred by rewriting the provision, because Indiana's blue-pencil doctrine only allows a court to delete language from an overbroad covenant, not add language. In an issue of first impression for the Indiana Supreme Court, the opinion rejected Zimmer's argument that a “reformation" provision in the agreement authorized the court to revise the provision. The trial court's injunction was vacated to the extent it had enforced this covenant.
The Buchanan team was led by shareholder Gerald E. Burns and included counsel Patrick D. Doran and senior attorney Robert J. Fitzgerald.