In a recent decision, Genzyme Corp. v. James C. Melvin, the Suffolk Superior Court (J. Salinger) significantly narrowed the geographic scope of a non-competition agreement from the entire United States to the Metro Atlantic Region in response to a motion by Genzyme Corp., (which now owns Sanofi) for a preliminary injunction. Sanofi’s motion sought to enforce the non-competition agreement as written and bar its former employee, the defendant Melvin, from working as Head of Sales for a competing pharmaceutical company in connection with a rival prescription drug for one year.
From 2018 to 2021, Melvin worked as a Senior Director at Sanofi, planning, developing and structuring Sanofi’s sales team throughout the United States for Dupixent, a drug which treats atopic dermatitis. When he started in the position in 2018, Melvin signed a confidentiality and non-competition agreement that barred him from working for any competing organization in connection with any competing product. The non-competition agreement also provided that the non-competition restriction would continue to apply regardless of changes in Melvin’s position at Sanofi. In March 2021, Melvin accepted a demotion to the role of Dupixent Regional Business Director for the Metro-Atlantic territory.
In March 2023, Melvin resigned from Sanofi and started working with a rival pharmaceutical company that also manufactured a drug for atopic dermatitis treatment. Sanofi filed suit and moved for a preliminary injunction seeking to bar Melvin from working as Head of Sales for that drug on behalf of the competitor for one year.
The Court found that the non-competition agreement was still in effect even after Melvin accepted the demotion because its terms stated that it remained in effect even if his position changed. The Court also found that the agreement was too broad in scope, as it encompassed the entire United States. In the last two years of his employment with Sanofi, Melvin’s work focused only on the Metro-Atlantic region. To be enforceable, a non-competition agreement must be necessary to protect legitimate business interests and reasonable in geographic reach and scope of prescribed activities. The Massachusetts Noncompetition Agreement Act provides that a non-competition agreement is presumptively reasonable if it is limited to the area in which the employee provided services or had a material presence or influence during the last two years of employment. Since Melvin’s work had focused only on the Metro-Atlantic Region (consisting of Manhattan, Philadelphia, and New Jersey) during his last two years at Sanofi, the Court limited the geographic scope of the non-competition agreement from the entire United States to that region alone. The Court enjoined Melvin from participating in sales of the rival drug in the Metro-Atlantic Region until March 2024 and barred him from using or disclosing any of Sanofi’s confidential information.