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The choose additionally discovered the non-compete and non-solicitation provisions enforceable however trimmed their geographic and temporal scope. He restricted the non-compete to 16 counties in Pennsylvania -specifically these inside 75 miles of Harrisburg, the place Mr. Fratelli had originated loans – rejecting Union Dwelling’s try to use the restriction to elements of Florida. Equally, the non-solicitation clause was narrowed to use solely to precise Union Dwelling prospects, not potential shoppers.
Whereas Choose Fleming acknowledged that Mr. Fratelli had performed a job in facilitating his assistant’s transfer to EMM, he declined to difficulty an injunction associated to the non-solicitation of workers, citing an absence of proof of ongoing or imminent hurt.
The courtroom prolonged the length of the restrictions by one yr, citing Mr. Fratelli’s violations, however required Union Dwelling to publish a $100,000 bond to offset potential monetary hurt to Mr. Fratelli.
The ruling highlights the growing reliance of economic corporations on restrictive covenants to guard shopper relationships and proprietary knowledge amid intensifying competitors. Nevertheless it additionally displays courts’ rising tendency to scrutinize such agreements for equity and proportionality.
Union Dwelling’s partial victory comes because the mortgage lender, headquartered in Strongsville, Ohio, faces broader challenges in retaining expertise in a aggressive market. It’s also suing 9 East-coast ex-employees who joined American Pacific Mortgage.
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