Contract – Breach of Contract – Non-Competition and Non-Solicitation Provisions

Plaintiff’s breach-of-contract claims premised on non-compete and non-solicitation provisions failed because those restrictions were unenforceably overbroad in geographic scope, duration, and subject matter.

The Court granted in part and denied in part Defendants’ motions to dismiss.

Plaintiff Evergreen Builder Solutions is a spray foam and thermal insulation contractor with operations or business locations in Raleigh and Wilmington, North Carolina. Two individual Defendants are Evergreen’s former employees who were based and worked in Wilmington, North Carolina. As Evergreen’s employees, Defendants signed various contracts agreeing not to disclose to third parties Evergreen’s purportedly confidential or proprietary information and agreed not to “compete” with Evergreen either “directly or indirectly” for a period of at least three years after their employment with Evergreen. Even though Evergreen “operates its business in” only “two principal markets,” the geographic limitations imposed by the agreements reach and purportedly apply to competition hundreds of miles away.

For its breach of contract cause of action, Plaintiff asserted that two individual Defendants breached and violated their respective non-compete, non-disclosure, and confidentiality agreements with Evergreen, primarily by “participat[ing] in Evergreen’s Business Services since their departure,” “divulg[ing] and disseminat[ing] Plaintiff Evergreen’s Proprietary Information,” “us[ing] their knowledge of Plaintiff Evergreen’s client lists to solicit current and former clients of Evergreen,” and “us[ing] their knowledge of Plaintiff Evergreen’s Business Services, bidding, and estimating programs and formulas techniques [sic] to present and circulate proposals to the Defendants’ potential clients.” Thus, at issue were three discrete restrictions and limitations in the various agreements between the parties: non-compete, non-solicitation, and non-disclosure or confidentiality restrictions.

Defendants argued that the non-competition and non-solicitation provisions at issue were fatally overbroad in terms of their geographic restrictions, client-based restrictions, and subject matter restrictions. while Evergreen operates only in two locations in a single state— Raleigh and Wilmington, North Carolina—the agreements purport to restrict Defendants from competing “directly or indirectly” in any capacity with Evergreen across at least a 150-mile radius spanning three separate states for a period of at least three years.

The provisions are so broad that they conceivably encompass any and all services and products in any way offered, and clients in any way serviced, by Evergreen at any time, regardless of whether Defendants provided the products or services on behalf of Evergreen and regardless of whether Evergreen itself provided the product or service (or worked with the client) during the period of Defendants’ employment.

The Court determined that the non-compete and non-solicitation provisions of the agreements at issue were overly and unenforceably broad. Therefore, to the extent based on those provisions, Evergreen’s cause of action for breach of contract failed as a matter of law, such that dismissal was appropriate.

Granted in part, denied in part.

Evergreen Builder Solutions LLC v. Taylor (Lawyers’ Weekly No. 020-077-25, 30 pp.) (Matthew T. Houston, J.) 2025 NCBC 77. The Law Office of Matthew I. Van Horn, PLLC, by Matthew I. Van Horn, for Plaintiff Evergreen Builder Solutions, LLC d/b/a Evergreen Foam & Insulation. Cranfill Sumner, LLP, by Benton L. Toups and Tammy L. Neil, for Defendants Weston Dean Taylor and Mark Eric Price. Equitas Law Partners, LLP, by C. Wes C. Hodges, II, Thomas S. Babel, and Lieth O. Khatib, for Defendants Reed Campbell Westra, Ashley Fiala Westra, Integrity Building Companies, LLC d/b/a IBC Roofing, Integrity Insulation Systems, LLC, IBC Holdings, LLC, and IBC Franchising, LLC. North Carolina Business Court