Damages for Breach of Non-Compete Agreement In Connecticut

When deciding whether to hire an attorney to seek enforcement of a non-compete agreement in Connecticut, a business should consider the available remedies or damages.  The following are the basic remedies or damages for breach of a typical non-compete agreement in Connecticut.

1. Injunctive relief.  Injunctive relief basically means a court ordered act or prohibition against an act.  For example, when seeking to enforce a non-compete or non-solicitation agreement, your attorney will request that the court issue an order preventing the employee from working for a competitor.  If there is a non-solicitation clause in the contract, the attorney will ask the court to issue an order to prevent the departing employee from soliciting or "stealing" clients.  The court will only issue such an order if the agreement meets a series of factual requirements.   Essentially, the restrictions in the agreement must be reasonable in relation to protecting legitimate business interests.  

2. Actual losses.  In some situations, a business will have no measurable losses and will need to resort to injunctive relief only.  However, in other instances, a business will have provable loss of business from breach of an agreement.  The traditional rule for breach of contract is to measure the damages or losses to the business and not the gains of the departing employee or competing business.  A typical example would be the loss of incremental profits from losing a customer arising from the improper conduct of the departing employee.  In Connecticut, a business must prove these damages with reasonable certainty and not guesswork.  

3. Disgorgement of profits.  In certain circumstances, a business could win an award that disgorges (or takes away) the ill gotten gains or profits of the departing employee.  For this type of damages, the focus is on the profits of the departing employee.  

4. Attorney’s fees.  The traditional rule requires each party to pay their own attorney’s fees. However, if the employment contract has a provision that covers an award of attorney’s fees, a court may award attorney’s fees incurred in enforcement of the non-compete.

5. Punitive or multiple damages.  In a standard breach of contract case, punitive, exemplary, or multiple damages are not available.  However, if the conduct involved provides the basis for a violation of some other statutory or common law, a business may recover some type of extra contractual damages.  An example would be if the breaching conduct also provided the basis to prove a willful violation of Connecticut’s Uniform Trade Secrets Act.