Boart Longyear, the world’s leading provider of drilling services, equipment, and tooling for mining and drilling, recently faced a dilemma that many employers encounter – are non-solicitation provisions in a severance agreement worth the paper they are written on? Last week, a Utah jury trial answered the question with a resounding, YES.
Boart Longyear severed the employment of a senior executive and agreed to make time-limited payments in exchange for a comprehensive release that contained employee non-solicitation and non-influence provisions. Boart Longyear alleged that within weeks of leaving Boart Longyear for a similar position in another state, the former executive exchanged phone calls and text messages with a Boart Longyear financial analyst about openings with the executive’s new employer. Boart Longyear argued that in violation of his non-solicitation and non-influence obligations, the former executive orchestrated an interview and then a job offer for the financial analyst, conditioned upon Boart Longyear releasing the former executive from his non-solicitation and non-influence obligations.
Boart Longyear immediately stopped further payments to the former executive and brought suit in Utah state court to enforce the employee non-solicitation and non-influence provision. The former executive filed a counterclaim seeking to recover nearly $400,000 in remaining severance and other payments. After a four-day trial, the jury returned a complete unanimous victory for Boart Longyear in only 2 hours, upholding Boart Longyear’s provisions and denying the former executive’s counterclaim. To enforce its a message about the impropriety of the his conduct, the jury awarded Boart a symbolic $1 in damages.