Non-compete nixed in MS

The Southern District of Mississippi (Lee) refuses to enforce a non-compete involving a former general manager of Peavy Electronics Corporation who after leaving Peavy went to work as Director of Sales and Marketing of a California company which has some products which perform similarly to Peavy Products. Peavy Electronics Corporation v. Pinske, C.A. No. 4:10CV69TSL-LRA (So. D. Miss. June 1, 2010). More after the jump.
The Court rejected two procedural arguments raised by the former employee. First, it found the new employer was not a Rule 19 necessary party, and second, it refused to abstain to allow the employee's California state court action to address the validity of the non-compete. Turning to the merits of the claim the Court found Peavy failed to provide any justification for the restraint on gainful occupation caused by the agreement. Non-competes are disfavored and the employer attempting to enforce one must establish the "reasonableness, necessity and purpose for the non-compete." A failure to do so means the employer has failed to establish its likelihood it will prevail on the merits, a precondition for injunctive relief. The court also notes the employer's failure to identify one harm suffered during the employees 6 month's employment with the new employer precludes a finding of irreparable harm. A possible loss of future business, without more, is insufficient to establish irreparable harm.