Horner International Co. v. McKoy

NO. COA13-964

NORTH CAROLINA COURT OF APPEALS

Filed: 4 March 2014

HORNER INTERNATIONAL COMPANY,

Plaintiff,

v. Wake County

No. 13 CVS 7131

BILL M. MCKOY,

Defendant.

Appeal by Plaintiff and cross-appeal by Defendant from

preliminary injunction entered 14 June 2013 by Judge G. Bryan

Collins in Wake County Superior Court. Heard in the Court of

Appeals 8 January 2014.

Wallace & Nordan, L.L.P., by John R. Wallace and Joseph A.

Newsome, for Plaintiff.

Robinson Bradshaw & Hinson, P.A., by J. Dickson Phillips

and Brian L. Church, for Defendant.

STEPHENS, Judge.

Procedural History and Factual Background

This case concerns the grant in part and denial in part of

a motion for a preliminary injunction in a dispute between a

company and its former employee. Plaintiff Horner International

Company manufactures flavor materials for use in tobacco and

food products. Defendant Bill M. McKoy was employed by

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Plaintiff from May 2006 until October 2012. In 2006, Defendant,

who had worked in the food processing and flavor industry since

the early 1980s, assisted Plaintiff with setting up a new

manufacturing plant in Durham and served as plant manager

thereafter. In May 2006, Defendant signed a Non-Competition

Agreement (“NCA”) and Agreement Not to Disclose Trade Secrets

(“ANDTS”) as conditions of his employment with Plaintiff.

Defendant resigned from Plaintiff on 8 October 2012 and,

thereafter, began employment with Teawolf, LLC, a Delaware

Limited Liability Company with its principal place of business

in New Jersey. Defendant’s work for Teawolf involves

installing, maintaining, and optimizing equipment used in the

production of new flavor products. Both Plaintiff and Teawolf

sell flavor materials derived from cocoa, chocolate, coffee,

tea, fenugreek, ginseng, and chamomile.

On 20 May 2013, Plaintiff filed (1) a complaint; (2) a

motion for temporary restraining order (“TRO”), preliminary

injunction, and permanent injunction; and (3) a motion for an

order allowing expedited discovery of Defendant. The motions

for TRO and expedited discovery were allowed on 22 May 2013, and

Defendant was restrained from violating the NCA and ANDTS.

Following a hearing on the motion for preliminary injunction in

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early June 2013, the trial court entered an order on 14 June

2013, nunc pro tunc, to 4 June 2013, which enjoined Defendant

from disclosing Plaintiff’s confidential information and trade

secrets, but denied the motion as to the NCA. On 27 June 2013,

Plaintiff filed notice of appeal from the trial court’s denial

of the preliminary injunction as to the NCA. On 8 July 2013,

Defendant filed notice of cross-appeal from the grant of the

preliminary injunction as to Plaintiff’s confidential

information and trade secrets.

Grounds for Appellate Review

Preliminary injunctions are “interlocutory and thus

generally not immediately reviewable. An appeal may be proper,

however, in cases, including those involving trade secrets and

non-compete agreements, where the denial of the injunction

deprives the appellant of a substantial right which he would

lose absent review prior to final determination.” VisionAIR,

Inc. v. James, 167 N.C. App. 504, 507, 606 S.E.2d 359, 361

(2004) (citations and internal quotation marks omitted).

The purpose of a preliminary injunction is

ordinarily to preserve the status quo

pending trial on the merits. Its issuance

is a matter of discretion to be exercised by

the hearing judge after a careful balancing

of the equities. Its impact is temporary

and lasts no longer than the pendency of the

action. Its decree bears no precedent to

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guide the final determination of the rights

of the parties. In form, purpose, and

effect, it is purely interlocutory. Thus,

the threshold question presented by a

purported appeal from an order granting a

preliminary injunction is whether the

appellant has been deprived of any

substantial right which might be lost should

the order escape appellate review before

final judgment.

A.E.P. Indus., Inc. v. McClure, 308 N.C. 393, 400, 302 S.E.2d

754, 759 (1983) (citation and internal quotation marks omitted).

Our Supreme Court went on to hold that

where time is of the essence, the appellate

process is not the procedural mechanism best

suited for resolving the dispute. The

parties would be better advised to seek a

final determination on the merits at the

earliest possible time. Nevertheless,

[where a] case presents an important

question affecting the respective rights of

employers and employees who choose to

execute agreements involving covenants not

to compete, [appellate courts should]

address the issues.

Id. at 401, 302 S.E.2d at 759. We believe the same reasoning

applies to agreements between an employer and employee regarding

protection of the employer’s alleged trade secrets.

Accordingly, we address the merits of both Plaintiff’s appeal

and Defendant’s cross-appeal.

Discussion

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In its appeal, Plaintiff argues that the trial court erred

in denying its motion for a preliminary injunction as to the

NCA, contending that (1) a non-compete agreement can be properly

enforced by means of a preliminary injunction and (2) the NCA is

valid and enforceable. In his cross-appeal, Defendant argues

that the court erred in enjoining him from disclosure of

Plaintiff’s confidential information and trade secrets,

contending that (1) Plaintiff failed to sufficiently identify

the trade secrets allegedly at risk of disclosure, (2)

Defendant’s mere “opportunity to misappropriate” cannot support

the court’s determination of Plaintiff’s likelihood of success

on the merits of its claims, and (3) the preliminary injunction

entered was too “broad and nebulous.” As discussed herein, we

affirm.

I. Standard of Review

As a general rule, a preliminary injunction

is an extraordinary measure taken by a court

to preserve the status quo of the parties

during litigation. It will be issued only

(1) if a plaintiff is able to show

likelihood of success on the merits of his

case and (2) if a plaintiff is likely to

sustain irreparable loss unless the

injunction is issued, or if, in the opinion

of the Court, issuance is necessary for the

protection of a plaintiff’s rights during

the course of litigation.

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Id. at 401, 302 S.E.2d at 759-60 (citations, internal quotation

marks, and emphasis omitted).

“The standard of review from a preliminary injunction is

essentially de novo.” VisionAIR, Inc., 167 N.C. App. at 507,

606 S.E.2d at 362 (citation and internal quotation marks

omitted). Thus, “on appeal from an order of a superior court

granting or denying a preliminary injunction, an appellate court

is not bound by the findings, but may review and weigh the

evidence and find facts for itself.” A.E.P. Indus., Inc., 308

N.C. at 402, 302 S.E.2d at 760 (citation omitted).

“Nevertheless[,] a trial court’s ruling on a motion for a

preliminary injunction is presumed to be correct, and the party

challenging the ruling bears the burden of showing it was

erroneous.” VisionAIR, Inc., 167 N.C. App. at 507, 606 S.E.2d

at 362 (citation and internal quotation marks omitted).

II. Plaintiff’s Appeal

Plaintiff argues that the trial court erred in denying its

motion for a preliminary injunction as to the NCA, contending

that (1) non-compete agreements may be properly enforced by

means of a preliminary injunction and (2) the NCA is valid and

enforceable. While Plaintiff’s first contention is correct, we

disagree with the second.

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Plaintiff asserts that this Court should reverse the denial

of its motion and remand for entry of a preliminary injunction

as to the NCA, citing the following discussion from A.E.P.

Indus., Inc.:

[T]here are two important aspects of this

case which distinguish it substantively and

procedurally from the more usual case in

which a preliminary injunction is sought.

The first is that the ultimate relief [the]

plaintiff seeks is enforcement of a covenant

not to compete. The promised performance by

the employee is forbearance to act and the

remedy is one for specific performance of

the contract in the nature of an injunction

prohibiting any further violation of it.

The second distinguishing feature of this

case is that the decision made at the

preliminary injunction stage of the

proceedings becomes, in effect, a

determination on the merits. This is so

because the validity of the covenant

depends, among other things, on the duration

of the time limitation which, in order to be

reasonable, must be brief. The case is

clothed with immediacy. Frequently the time

limitation will have expired prior to final

determination. Moreover, because the

primary relief sought by the plaintiff is a

permanent injunction, many of the

considerations involved in the decision to

grant or deny the preliminary injunction

parallel those involved in a final

determination on the merits. Specifically,

the court must decide whether the remedy

sought by the plaintiff is the most

appropriate for preserving and protecting

its rights or whether there is an adequate

remedy at law.

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A.E.P. Indus., Inc., 308 N.C. at 405-06, 302 S.E.2d at 762

(citations omitted; emphasis in original). Thus, our Supreme

Court held:

Because of the need for immediacy of

appropriate relief in cases dealing with

covenants not to compete, as for example in

the present case where [the] defendant

contracted not to engage in a competitive

business for only eighteen months, the law

as stated above is particularly applicable.

We hold that where the primary ultimate

remedy sought is an injunction; where the

denial of a preliminary injunction would

serve effectively to foreclose adequate

relief to [the] plaintiff; where no “legal”

(as opposed to equitable) remedy will

suffice; and where the decision to grant or

deny a preliminary injunction in effect

results in a determination on the merits,

[the] plaintiff has made a showing that the

issuance of a preliminary injunction is

necessary for the protection of its rights

during the course of litigation.

Id. at 410, 302 S.E.2d at 764. Thus, valid non-compete

agreements can be enforced by a preliminary injunction, and

Defendant freely concedes this point. What is not discussed in

A.E.P. Indus., Inc., but forms the central question in this

appeal, is the second prong of Plaintiff’s appellate argument:

whether the NCA is valid.

Covenants not to compete between an employer

and employee are not viewed favorably in

modern law. To be valid, the restrictions

on the employee’s future employability by

others must be no wider in scope than is

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necessary to protect the business of the

employer. If a non-compete covenant is too

broad to be a reasonable protection to the

employer’s business it will not be enforced.

The courts will not rewrite a contract if it

is too broad but will simply not enforce it.

VisionAIR, Inc., 167 N.C. App. at 508, 606 S.E.2d at 362

(citations and internal quotation marks omitted). In that case,

this Court observed that the non-compete clause in question

provided that the defendant

may not “own, manage, be employed by or

otherwise participate in, directly or

indirectly, any business similar to

Employer’s . . . within the Southeast” for

two years after the termination of his

employ with VisionAIR. Under this covenant

[the defendant] would not merely be

prevented from engaging in work similar to

that which he did for VisionAIR at VisionAIR

competitors; [the defendant] would be

prevented from doing even wholly unrelated

work at any firm similar to VisionAIR.

Further, by preventing [the defendant] from

even “indirectly” owning any similar firm,

[the defendant] may, for example, even be

prohibited from holding interest in a mutual

fund invested in part in a firm engaged in

business similar to VisionAIR. Such vast

restrictions on [the defendant] cannot be

enforced.

Id. at 508-09, 606 S.E.2d at 362-63 (footnote omitted; emphasis

added).

The NCA here is quite similar to the non-compete covenant

in VisionAIR, Inc. The NCA purports to bar Defendant from

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“directly or indirectly” being employed by or acting “as an

advisor, consultant, or salesperson for, or becom[ing]

financially interested, directly or indirectly, in any person,

proprietorship, partnership, firm, or corporation engaged in, or

about to become engaged in, the business of selling flavor

materials” for a period of 18 months after his employment with

Plaintiff ended. (Emphasis added).

We perceive no meaningful distinction between the NCA here

and the non-compete covenant held to be overbroad in VisionAIR,

Inc. The duration of time is slightly shorter (18 months here

versus two years in VisionAIR, Inc.). However, the NCA contains

no geographical limitation, unlike the restriction of the

VisionAIR, Inc. covenant to similar businesses in “the

Southeast.” More importantly, just as, “[u]nder th[e] covenant

[the defendant in VisionAIR] would not [have] merely be[en]

prevented from engaging in work similar to that which he did for

VisionAIR at VisionAIR competitors; [the defendant] would [have]

be[en] prevented from doing even wholly unrelated work at any

firm similar to VisionAIR[,]” the NCA purports to bar Defendant

from doing wholly unrelated work for any firm that sells “flavor

materials[,]” even if that firm’s products do not compete with

those of Plaintiff. Finally, the NCA purports to bar Defendant

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from having even an indirect financial interest in such a

business, a condition specifically rejected by the Court in

VisionAIR, Inc. See id. at 509, 606 S.E.2d at 362-63 (“Further,

by preventing [the defendant] from even ‘indirectly’ owning any

similar firm, [the defendant] may, for example, even be

prohibited from holding interest in a mutual fund invested in

part in a firm engaged in business similar to VisionAIR. Such

vast restrictions on [the defendant] cannot be enforced.”).

Plaintiff further cites Precision Walls, Inc. v. Servie,

152 N.C. App. 630, 568 S.E.2d 267 (2002) and Okuma Am. Corp. v.

Bowers, 181 N.C. App. 85, 638 S.E.2d 617 (2007) in support of

its position. These cases are distinguishable.

In Okuma Am. Corp., this Court observed:

When considering the time and geographic

limits outlined in a covenant not to

compete, we look to six overlapping factors:

(1) the area, or scope, of the restriction;

(2) the area assigned to the employee; (3)

the area where the employee actually worked

or was subject to work; (4) the area in

which the employer operated; (5) the nature

of the business involved; and (6) the nature

of the employee’s duty and his knowledge of

the employer’s business operation.

Id. at 89, 638 S.E.2d at 620 (citation and internal quotation

marks omitted; emphasis added). In Precision Walls, this Court

considered only “the reasonableness of time and territory

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restrictions” and a bar on employment with competitors.

Precision Walls, Inc., 152 N.C. App. at 637, 639, 568 S.E.2d at

272, 273. As noted supra, it is the broad sweep of the

activities covered by the NCA which renders the agreement

overbroad and thus unenforceable. Accordingly, these cases are

largely inapposite. However, we do find it instructive that the

Court in Okuma Am. Corp. noted that “a covenant not to compete

is overly broad [when], rather than attempting to prevent [the

former employee] from competing for []business, it requires [the

former employee] to have no association whatsoever with any

business that provides [similar] services . . . .” 181 N.C.

App. at 91, 638 S.E.2d at 621 (citations and internal quotation

marks omitted). We believe this is the situation presented by

the NCA here.

In sum, because the NCA is overbroad and thus

unenforceable, Plaintiff cannot demonstrate likely success on

the merits. See VisionAIR, Inc., 167 N.C. App. at 508, 606

S.E.2d at 362. We conclude that the trial court did not err in

denying Plaintiff’s motion for a preliminary injunction as to

the NCA, and, accordingly, that portion of the order is

affirmed.

III. Defendant’s Cross-Appeal

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In his cross-appeal, Defendant advances two bases for his

argument that the trial court erred in granting the preliminary

injunction as to confidential information and trade secrets

obtained by Defendant during his employment with Plaintiff:

that Plaintiff failed to show a likelihood of success on the

merits of its claim for violations of the North Carolina Trade

Secrets Protection Act (“TSPA”) and that the trial court’s

injunction was too broad and nebulous. We disagree.

A. Specificity of allegations

Defendant first contends that the trial court erred in

concluding that Plaintiff showed a likelihood of success on the

merits of its claim for violations of the TSPA because Plaintiff

failed to plead the trade secrets at risk of disclosure with

sufficient particularity and alleged only the opportunity to

misappropriate the trade secrets. We disagree with both

contentions.

The TSPA

provides that the owner of a trade secret

shall have remedy by civil action for

misappropriation of the secret.

“Trade secret” means business or technical

information, including but not limited to a

formula, pattern, program, device,

compilation of information, method,

technique, or process that:

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a. Derives independent actual or potential

commercial value from not being generally

known or readily ascertainable through

independent development or reverse

engineering by persons who can obtain

economic value from its disclosure or use;

and

b. Is the subject of efforts that are

reasonable under the circumstances to

maintain its secrecy.

“Misappropriation” means acquisition,

disclosure, or use of a trade secret of

another without express or implied authority

or consent, unless such trade secret was

arrived at by independent development,

reverse engineering, or was obtained from

another person with a right to disclose the

trade secret. The TSPA also provides that

actual or threatened misappropriation of a

trade secret may be preliminarily enjoined

during the pendency of the action and shall

be permanently enjoined upon judgment

finding misappropriation . . . .

Washburn v. Yadkin Valley Bank & Trust Co., 190 N.C. App. 315,

326, 660 S.E.2d 577, 585 (2008) (citations and internal

quotation marks omitted), disc. review denied, 363 N.C. 139, 674

S.E.2d 422 (2009).

To determine what information should be

treated as a trade secret, a court should

consider the following factors:

(1) the extent to which information is known

outside the business;

(2) the extent to which it is known to

employees and others involved in the

business;

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(3) the extent of measures taken to guard

secrecy of the information;

(4) the value of information to the business

and its competitors;

(5) the amount of effort or money expended

in developing the information; and

(6) the ease or difficulty with which the

information could properly be acquired or

duplicated by others.

Area Landscaping, L.L.C. v. Glaxo-Wellcome, Inc., 160 N.C. App.

520, 525, 586 S.E.2d 507, 511 (2003) (citations and internal

quotation marks omitted). “[A] complaint that makes general

allegations in sweeping and conclusory statements, without

specifically identifying the trade secrets allegedly

misappropriated, is insufficient to state a claim for

misappropriation of trade secrets.” Washburn, 190 N.C. App. at

327, 660 S.E.2d at 585-86 (citation and internal quotation marks

omitted). Rather, to successfully plead misappropriation of

trade secrets, “a plaintiff must identify a trade secret with

sufficient particularity so as to enable a defendant to

delineate that which he is accused of misappropriating and a

court to determine whether misappropriation has or is threatened

to occur.” VisionAIR, Inc., 167 N.C. App. at 510-11, 606 S.E.2d

at 364 (citation and internal quotation marks omitted).

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Regarding specificity of those trade secrets allegedly at risk,

for example, allegations that an employee “acquired knowledge of

[the employer’s] business methods; clients, their specific

requirements and needs; and other confidential information

pertaining to [the employer’s] business” are too “broad and

vague” to allege a TSPA claim. Washburn, 190 N.C. App. at 327,

660 S.E.2d at 586.

Here, in contrast, the verified amendment to Plaintiff’s

complaint alleges with great detail and specificity the

information Defendant has allegedly provided to his new

employer, describing, inter alia, various raw materials and raw

material treatments; extraction, filtration, separation, and

distillation techniques; and methods for compounding of flavors,

packaging, and plant utility. Further, the amendment alleged

that these processes and methods were used in the production of

flavor materials derived from seven specifically identified

substances, such as cocoa, ginseng, and chamomile. Accordingly,

we reject Defendant’s assertions that Plaintiff failed to

properly plead its claims under the TSPA.

Regarding allegations supporting the threat of

misappropriation, Defendant contends that the trial court erred

in granting the preliminary injunction because Plaintiff could

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only show “opportunity” for misappropriation. As noted supra,

the TSPA provides that “actual or threatened misappropriation of

a trade secret may be preliminarily enjoined during the pendency

of the action and shall be permanently enjoined upon judgment

finding misappropriation . . . .” N.C. Gen. Stat. § 66-154(a)

(2013) (emphasis added). Further,

[m]isappropriation of a trade secret is

prima facie established by the introduction

of substantial evidence that the person

against whom relief is sought both:

(1) Knows or should have known of the

trade secret; and

(2) Has had a specific opportunity to

acquire it for disclosure or use or has

acquired, disclosed, or used it without the

express or implied consent or authority of

the owner.

This prima facie evidence is rebutted by the

introduction of substantial evidence that

the person against whom relief is sought

acquired the information comprising the

trade secret by independent development,

reverse engineering, or it was obtained from

another person with a right to disclose the

trade secret. This section shall not be

construed to deprive the person against whom

relief is sought of any other defenses

provided under the law.

N.C. Gen. Stat. § 66-155 (2013) (italics added). Courts have

upheld grants of a preliminary injunction where plaintiffs have

presented some evidence that former employees have or

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necessarily will use trade secrets. Compare Barr-Mullin, Inc.

v. Browning, 108 N.C. App. 590, 597-98, 424 S.E.2d 226, 230-31

(1993) (finding a prima facie case for misappropriation existed

which supported a preliminary injunction where the defendant

helped develop software while working for the plaintiff and then

began producing identical software after leaving the plaintiff’s

employment); Analog Devices, Inc. v. Michalski, 157 N.C. App.

462, 467, 579 S.E.2d 449, 453 (2003) (upholding denial of

preliminary injunction where product design differences between

the defendant’s former and new employers “render[ed] the alleged

trade secrets largely non-transferable”).

Here, unlike in Analog Devices, Inc., there are no product

design differences which would render “non-transferable” the

trade secrets of Plaintiff which Defendant possesses.

Defendant’s strenuous assertions on appeal that Plaintiff

produced no direct or circumstantial evidence of his

“acquisition, use, or disclosure of [Plaintiff’s] information”

is misplaced. The TSPA permits preliminary injunctions where a

prima facie case for “actual or threatened misappropriation of a

trade secret” is established. N.C. Gen. Stat. § 66-154(a)

(emphasis added). In turn, that prima facie case is established

by showing that a defendant “(1) [k]nows or should have known of

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the trade secret; and (2) [h]as had a specific opportunity to

acquire it for disclosure or use or has acquired, disclosed, or

used it without the express or implied consent or authority of

the owner.” N.C. Gen. Stat. § 66-155 (emphasis added).

Defendant’s knowledge of trade secrets and opportunity to use

those in his work for his new employer create a threat of

misappropriation, and thus the trial court’s grant of a

preliminary injunction during the pendency of the action was

proper.1

B. Specificity of the preliminary injunction

Defendant also argues that the court’s injunction was too

broad and nebulous, citing Travenol Labs., Inc. v. Turner, 30

N.C. App. 686, 228 S.E.2d 478 (1976).

In Travenol Labs., Inc., the plaintiff-employer

sought and the trial court . . . granted an

injunction to prevent [the employee] from

revealing “all information regarded as

confidential . . . including but not limited

to information concerning the mechanical

modification of the Westphalia centrifuge

. . .” and to prevent [the new employer]

from receiving the same. Again [the Court]

weigh[ed] the factors relevant to the

1

Defendant also identifies two e-mails, the contents of which

Defendant asserts were improperly proved by testimony. However,

the court did not rely on the e-mails to support its conclusions

of law. Accordingly, we need not consider the admissibility of

this evidence.

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likelihood of disclosure in determining the

appropriateness of injunctive relief.

Ordinarily, mere employment by a competitor

alone will not create a likelihood of

disclosure sufficient to support an

injunction. An employee may take from his

employment general knowledge and skills.

[The plaintiff-employer] has clearly shown

that it is probable that at trial it will

establish that the mechanical modification

of the Westphalia centrifuge is a trade

secret. This modification has been the

subject of research and development and

would be of current use to [the new

employer] in its production process. [The

employee] has worked in the production field

for 22 years. Since this is precisely the

field in which [the employee] will be

employed by [the new employer], not merely

as a worker but at a high level supervisory

position, the possibility of disclosure is

high even absent any underhanded dealing in

the circumstances of his termination of

employment with [the plaintiff-employer].

[The plaintiff-employer] has also presented

evidence showing that several competitors

have tried without success to make a similar

modification. The disclosure of this

modification would cost [the plaintiff-

employer] a competitive advantage worth many

thousands of dollars. We f[ou]nd,

therefore, that with respect to the

modification of the Westphalia centrifuge,

the trial court was correct in issuing a

preliminary injunction in [the plaintiff-

employer’s] favor.

We [did] not agree, however, that [the

plaintiff-employer] made an adequate showing

to support that part of the injunction

broadly prohibiting disclosure of “all

information regarded as confidential.” This

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provision presents problems of scope and

nebulosity.

The showing made with respect to the

centrifuge modification rested upon its use

in production, [the employee’s] high level

position in production, and the failure of

competitors to make a similar modification.

These factors have no bearing to the more

broadly phrased part of the injunction . .

. . Sub judice, [the plaintiff-employer]

apparently considers its entire production

process as secret and confidential. Yet it

appears that [the plaintiff-employer, the

new employer,] and other competing

enterprises use the standard . . . process

in their plasma fractionation operations.

Though there may be some variation in the

production process among the competing

enterprises, [the plaintiff-employer] has

failed to show unique processing, other than

the modified Westphalia centrifuge, the

disclosure of which would result in

irreparable damage.

Id. at 694-95, 228 S.E.2d at 485 (citations omitted). This

Court went on to “emphasize that the facts and circumstances of

each case dictate the propriety of injunctive relief[.]” Id. at

695, 228 S.E.2d at 485.

Here, looking at the individual facts and circumstances of

the matter, the enjoining of Defendant from “[u]sing,

disclosing, or transmitting for any purpose any confidential

information obtained by [Defendant] from [Plaintiff]” plainly

applies to the methods, processes, and techniques described as

trade secrets in the preliminary injunction’s findings of fact

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and conclusions of law. As discussed supra, those trade secrets

are described with sufficient specificity that Defendant will

not be prevented from working with any “standard processes” with

his new employer. Accordingly, we overrule this argument.

The trial court’s order is

AFFIRMED.

Judge DAVIS concurs.

Judge STEELMAN concurs in a separate opinion.

NO. COA13-964

NORTH CAROLINA COURT OF APPEALS

Filed: 4 March 2014

HORNER INTERNATIONAL COMPANY,

Plaintiff,

v. Wake County

No. 10 CVS 7131

BILL M. McKOY,

Defendant.

STEELMAN, Judge, concurring.

I fully concur with the legal reasoning and result set

forth in the opinion, but write separately to again express

concern over the state of our law of restrictive employment

covenants in the context of our increasingly integrated global

economy.

At the time that our law in the area of restrictive

employment covenants was developed, much of our commerce was

local, and restrictive covenants were imposed only to protect

specific local interests. Any covenants that attempted to

protect broader commercial interests were held to be invalid as

an improper restraint of trade. Today’s economy is global in

nature. In the instant case, plaintiff conducts a very

specialized niche type of business, but its scope is worldwide,

rather than being focused upon a few counties in North Carolina.

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Our Supreme Court should re-evaluate the law of restrictive

covenants in the context of changed economic conditions to allow

restrictions upon competing business activities for a specific

period of time, limited to a specific, narrow type of business,

but with fewer geographic limitations.