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A federal appeals court has affirmed a preliminary injunction enforcing a noncompete agreement in a lawsuit filed by USI Insurance Services LLC against a former employee who left to join Alliant Insurance Services Inc.
Michael Aitkin and USI allegedly entered into a binding employment agreement in April 2018, in which Mr. Aitkin agreed to refrain from competing with USI during his employment and to provide 60 days’ notice of his resignation, according to court papers in Michael Aitkin v. USI Insurance Services LLC et al.
In February 2021, he abruptly resigned from his position as a commercial agriculture insurance broker in Hermiston, Oregon, without giving the requisite 60-day notice, and immediately began working for Alliant, USI said in court papers, which charged he had already diverted USI clients to Alliant.
The U.S. District Court in Portland, Oregon, agreed to issue a preliminary injunction enforcing the noncompete agreement and was affirmed by a three-judge appeals court panel of the 9th U.S. Circuit Court of Appeals in San Francisco on Friday.
“The district court did not clearly err,” the ruling said. It “properly considered the interests of ‘non-parties’ like Aitkin’s former USI clients and balanced them against the public’s interest in enforcing valid contracts,” it said.
The panel said it “is not left with a ‘definite and firm conviction that a mistake has been committed,’” in citing an earlier case and affirming the lower court’s ruling granting the preliminary injunction.
Attorneys in the case did not respond to requests for comment.
In February, a Pennsylvania state appeals court affirmed a 2020 ruling in which a lower court awarded USI $1.1 million in litigation over a former employee’s alleged failure to honor his noncompete agreement.