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Minnesota Judge Enforces Non-Compete Pact in St. Jude Case

Saying that St. Jude Medical Inc. "has an obvious interest in protecting its confidential information," and finding that a former senior employee subsequently hired by rival Medtronic Inc. was doing work that directly competes with St. Jude, a Minnesota judge  barred the employee from working at Medtronic for the next 11 weeks.

Minnesota state court judge M. Michael Monahan issued a temporary restraining order that precludes Joseph McCullough from resuming his activities at Medtronic until later this fall. Monahan agreed with St. Jude's argument that McCullough's employment with Medtronic was a direct violation of a non-compete agreement he executed with St. Jude when he began working there.

That agreement barred McCullough's work with any other company in a competitive capacity for 12 months. McCullough left his position at St. Jude in the autumn of 2009 owing to performance issues. In his view, the non-compete ban began the day he quit. Additionally, he viewed that the agreement was irrelevant regarding his employment with Medtronic, arguing that his work there was in a noncompetitive capacity.

St. Jude responded that McCullough should be enjoined from working at Medtronic until May 2011. Following his termination from his St. Jude post, the company agreed to continue paying him through 2010 if he remained an employee in another position and continued to honor the non-compete agreement. He voluntarily left in May, and St. Jude argued that the agreement should bar him from joining Medtronic for a year after that.

Judge Monahan, while upholding the non-compete pact, ruled that the 12-month provision commenced last autumn on the day that McCullough was forced out of his job at St. Jude. Therefore, the ban will expire this autumn and not in May 2011.

online.wsj.com "Ex-St. Jude Official Temporarily Sidelined" August 12, 2010

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