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Northern Star Management of America, LLC v. Sedlacek

Court of Appeals of North Carolina

August 19, 2014

NORTHERN STAR MANAGEMENT OF AMERICA, LLC, Plaintiff,
v.
MARK SEDLACEK, Defendant

Heard in the Court of Appeals April 24, 2014

Page 358

Guilford County. No. 13 CVS 7584.

Nelson Levine de Luca & Hamilton, by David G. Harris II, David L. Brown, and John I. Malone, Jr. Mr., for Plaintiff.

Carruthers & Roth, P.A., by Mark K. York Mr. and J. Patrick Haywood Mr., for Defendant.

DILLON, Judge. Judge STROUD and Judge HUNTER, JR. concur.

OPINION

Page 359

Appeal by Defendant from order entered 4 September 2013 by Judge David L. Hall in Guilford County Superior Court. Heard in the Court of Appeals 24 April 2014.

DILLON, Judge.

Mark Sedlacek appeals from the trial court's order enjoining him from violating non-compete provisions contained in an agreement he entered into with his former employer, Northern Star Management of America, LLC (" Northern Star" ). For the following reasons, we vacate and remand for further proceedings consistent with this opinion.

I. Factual & Procedural Background

Northern Star is a company which specializes in the design, development and administration of insurance products. Its principal place of business is located in North Carolina, though its parent company, Northern Star Management, Inc., is based in New Jersey. Mr. Sedlacek, a North Carolina resident, has worked in the insurance industry since 1982 and specializes in " creating and managing insurance products for and on behalf of commercial carriers related to collateral recovery (repossession), automobile transporters, and towing."

In early 2010, Mr. Sedlacek was an officer and part-owner of AEON Insurance Group, Inc., when AEON was purchased by Northern Star. Mr. Sedlacek thereafter worked for Northern Star, on and off, until June 2013. During this time, Mr. Sedlacek and Northern Star entered into three agreements, each of which contained non-compete and confidentiality provisions (hereinafter referred to generally as the " covenants" ), whereby Mr. Sedlacek agreed to refrain from engaging in certain activities in the insurance business within certain territories for a specified period of time.

The parties entered into the first two agreements (collectively, the " 2010 Agreements" ) around the time of Northern Star's purchase of AEON, and each included a provision designating New Jersey law as governing the agreements. Mr. Sedlacek signed the first agreement (the " Asset Purchase Agreement" ) as an owner of AEON, agreeing to sell AEON's assets and liabilities to

Page 360

Northern Star and to refrain from using Northern Star's confidential information and from engaging in certain activities in the insurance business with Northern Star " worldwide." In the second agreement (the " Consulting Agreement" ), Mr. Sedlacek agreed to work as a consultant for Northern Star and further agreed not to engage in certain activities in the insurance business and not to use Northern Star's confidential information outside his relationship with Northern Star for a certain period in the United States and its territories.

The parties entered into the third agreement (the " Severance Agreement" ) in February 2013, when Mr. Sedlacek temporarily separated from Northern Star. Pursuant to this agreement, Mr. Sedlacek accepted a severance payment and acknowledged that his obligations under the prior agreements would continue in accordance with their terms. The Severance Agreement contained a provision designating North Carolina law as governing that agreement. Mr. Sedlacek was rehired by Northern Star the day after the parties executed the Severance ...


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