Delaware Business Litigation Report

Court of Chancery Rescues Janitor

Elite Cleaning Company, Inc. v. Capel, C.A. No. 690-N, 2006 WL 1565161 (Del. Ch. June 2, 2006). In this precedent setting case, the Court of Chancery refused to enforce a non-compete agreement against a janitor of the Elite Cleaning Company, apparently concluding his services were not so elite after all. The Court began by noting that it would require clear and convincing evidence that an employment agreement covered a former employee. It noted that for an at-will employee, the mere existence of an employment handbook did not constitute a contract to not compete after termination. The Court recognized that so-called disintermediation was an economic interest to be protected so that those who provide contract employees may in the right case stop the employment of the employees they provide. Where the employer got nailed, however, is that it tried to stop a janitor from being employed for two years. The Court held that was too long. Further and more importantly, the Court concluded that it would not enforce noncompetition agreements against those employees without special skills or training. The implications of this limitation on such noncompetition clauses will no doubt be explored in future cases. Share