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Judge Rules against Quixtar Non-Compete Clause |
| In the case of Campbell & Turner v Quixtar, Judge Barrett today ruled
against Quixtar and their non-compete section of the "Rules of Conduct". According to Judge Barrett's ruling - "The area covered is so incredibly large that the non-competition clause is "unenforceable on its face....". In his ruling Judge Barrett also stated, "The scope of geographic coverage of the Rules takes one's breath away."  Read the Court OrderThis ruling relies on some particulars of Georgia law, but they might be successful elsewhere. Two things really stand out. First, the court ignored the arbitration issue and ruled that it could issue findings on the declaratory relief sought without compelling the case to arbitration. That's not very likely to work in most states, which would require even easily resolved legal issues to be referred to the arbitrator IF there is an enforceable arbitration agreement. The second thing that stands out, is that the lack of geographic restrictions, all by itself, was enough to render the non-compete covenant un-enforceable. That actually might fly in other jurisdictions. I think Amway's retention of the power to change the non-compete terms at any time (setting aside their ridiculous argument that the IBOAI somehow can contract away the rights of IBOs) would also set the non-compete clause up for the same sort of argument Morrison succeeded with: illusory consideration. Many states even require EXTRA consideration before a non-compete covenant will be enforceable. I'm interested to see their success in rolling back the arbitration and non-compete clauses in other jurisdictions. |
