E.T. Products, LLC v. D.E. Miller Holdings, Inc.

Federal 7th Circuit Court
Civil Court
Contracts
Citation
Case Number: 
No. 16-1204
Decision Date: 
September 20, 2017
Federal District: 
N.D. Ind., Hammond Div.
Holding: 
Affirmed

In action to enforce provisions of covenant not to compete that were part of defendants’ agreement to sell business to plaintiff, Dist. Ct. did not err in finding that instant covenant, which prohibited defendants from providing assistance to plaintiff’s competitors for 5-year period for entire North American continent, was enforceable, but that defendants, who only assisted third-party that distributed plaintiff’s products, did not violate said covenant. Noncompete agreements that concern sales of businesses and usually involve parties with relatively equal bargaining power stand in better stead than similar noncompete provisions in employment contracts, and instant restrictions on defendants’ activities after sale of business were enforceable under Indiana law. However, terms of agreement only prohibited defendants from assisting plaintiff’s competitors. As such, their assistance to distributor of plaintiff’s products did not violate covenant since distributor was not competitor to plaintiff.