Appellate Court Resolves Longstanding Uncertainty About Consideration for Connecticut Non-Competes

Jan 24 2023

The nature of non-compete litigation – in particular, its (often exclusive) focus on the preliminary injunctive stage – means that non-compete cases rarely reach a final judgment and the Connecticut Supreme and Appellate Courts thus rarely have the opportunity to opine on this important area of employment law. And that perhaps explains how Connecticut Superior Court judges can spend decades intractably divided about what would seem to be a fairly straightforward legal question.

So it has been with the question of whether the continuation at-will employment constitutes sufficient consideration for a Connecticut covenant not to compete to be enforceable. Or, put another way: If an employer requires an existing at-will employee to sign a non-compete without offering that employee any benefit other than the continuation of the employee’s at-will employment, does the employee actually get something of value such that the non-compete amounts to a contract in the eyes of the law?

Well, we now have an answer to that question, and it is, “Yes.”

The case – Schimenti Construction Co. v. Schimenti (AC 44274) (Jan. 17, 2023) – involves (as the name suggests) a dispute within a family construction business. The defendant, Joseph Schimenti, left the family business to join a competitor, despite having signed a non-compete that purported to prohibit him from doing so. Joseph’s cousin and the sole owner of the plaintiff company, Matthew Schimenti, decided to sue. In the Superior Court, Judge Moukawsher granted summary judgment for the defendant on the grounds that the non-compete was not supported by consideration – and therefore was legally unenforceable – because the only thing Joseph received in exchange for the non-compete was continued at-will employment.

A three-judge panel of Appellate Court (composed of Chief Judge Bright and Judges Cradle and Seeley) unanimously reversed. The Appellate Court held that it did not need to evaluate the question from first principles because, in its view, two ancient Connecticut Supreme Court cases controlled the question.

In one case, Roessler v. Burwell, 119 Conn. 289 (1934), the Connecticut Supreme Court held that a non-compete was enforceable even though the only benefit the employee received in return was “indefinite[]” employment, which the Appellate Court understood to be “essentially” tantamount to “at-will employment.”

In the other, Torrington Creamery v. Davenport, 126 Conn. 515 (1940), the Connecticut Supreme Court cited its earlier Roessler case for the proposition that, “While, under the contract, [the plaintiff] could discharge the defendant at any time, this did not make the contract one lacking in mutuality as regards the enforcement of the covenant in question.”

The Appellate Court concluded that these two cases “remain[ed] binding precedent” and dictated that “consideration in the form of continued employment for at-will employees can be sufficient to make enforceable a restrictive covenant agreed to by the parties at some point after the commencement of employment.”

For what it’s worth, all of these cases – Schimenti Construction, Roessler, and Torrington Creamery – involved employees who resigned, so it is possible that this same rule would not apply to employees who are terminated by their employers.

It is also possible that this case or another case could make its way to the Connecticut Supreme Court, which would have the opportunity – although not the obligation, of course – to re-evaluate this doctrine.

And it is possible that the Connecticut General Assembly will moot all of this common-law development by passing a statute that regulates non-competes – including the issue of consideration – with more specificity.

For now, though, the longstanding question of consideration finally has an answer.

* * *

If you have questions about a non-compete agreement, please contact the Connecticut employment lawyers at Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C. We’re here to help.

Share this Post

connecticut non-compete agreement

About the Author

Joshua R. Goodbaum

You deserve justice. We are here to fight for you.

Best Lawyers

Let Us Review Your Case

    We will respond to your message promptly. Although we will keep your message strictly confidential, please note that contacting us does not create an attorney-client relationship.

    Client Experiences

    During a very difficult employment situation, I was referred to Joe Garrison. Recognizing the volatile and time sensitive nature of my employment situation, Mr. Garrison met with me immediately (on the weekend no less). He listened to the details of my case, was able to think through possible creative solutions to offer the employer, and was responsive to my myriad of questions. He understood my concerns about litigation versus settlement, and he worked to find the best resolution possible. I am grateful to have had his support at a very difficult time. —J.C., New Haven, CT

    You will never meet a more knowledgeable and compassionate professional than Steve Fitzgerald. My employment situation was very complex, and Attorney Fitzgerald kept me focused while remaining extremely adept and “thinking on his feet.” Should the need present itself again, I would never seek anyone else’s counsel regarding employment issues. I cannot recommend him highly enough. — J.R., New Haven, CT

    Nina Pirrotti provided outstanding legal advice and was trustworthy, dependable, and responsive. From the start, I was confident that her knowledge and experience would obtain favorable results. On a more personal note, I enjoyed working with her and her staff and felt I was included in every part of the process. The dedication, concern, and interest in me as a client was greatly appreciated, and Nina has earned my highest recommendation. — J.H., Monroe, CT

    I recently found myself in need of a lawyer in handling a dispute with my former employer. I was fortunate to retain Josh Goodbaum as my legal counsel. His legal skills knowledge and professionalism shone through in every step of the process resulting in a very positive result. I highly recommend Josh if you find yourself in need of legal counsel. — S.R., Guilford, CT

    When I go to a lawyer for advice, I am usually anxious, particularly the first meeting. Amanda DeMatteis was clear in describing my options and immediately set me at ease. Realistic assessment is important, and Amanda was clear as to how to set up the case and the direction she felt we should go. I had total confidence in her abilities and knew I was being well represented against a large corporation. More importantly, we were successful! —N.M., Haddam, CT

    Proven Results & Personalized Attention When You Need It Most

    American Law Institute Super Lawyers American College of Trial Lawyers Best Lawyers The College of Labor and Employment Lawyers
    Back to Top
    (203) 815-1716