## Facts

- Atmel Corporation and Vitesse Semiconductor Corporation competed in the semiconductor industry; Atmel operated in Colorado Springs, Colorado.
- Atmel employed Robert L. West, Patrick H. Jenkins, and Lattie Alejo under written agreements containing a one-year post-employment non-solicitation clause barring them from directly or indirectly soliciting or recruiting Atmel employees to leave Atmel.
- The three employees left Atmel to work for Vitesse.
- After joining Vitesse, the former employees provided Vitesse with names of Atmel employees whom Vitesse might seek to hire.
- Atmel sued Vitesse and the former employees for breach of the non-solicitation covenants and sought injunctive relief to prevent alleged workforce “raiding.”
- The district court entered a one-year preliminary injunction that (i) barred the former employees from soliciting or recruiting Atmel employees for Vitesse and (ii) prohibited Atmel employees from initiating contact with Vitesse about employment.
- The district court set a $5,000 injunction bond under Colorado Rule of Civil Procedure 65(c).
- Defendants appealed the injunction’s scope and validity and the bond amount.

## Issues

1. Whether the non-solicitation clause should be construed by its plain language (considering intent and relevant industry practice) or expanded to bar any participation by former employees in a competitor’s recruiting of Atmel employees.
2. Whether the preliminary injunction exceeded what the contract and Colorado law permitted, including by restricting contacts initiated by Atmel employees.
3. Whether the $5,000 Rule 65(c) bond was an abuse of discretion and what remedies are available for a wrongful injunction.

## Decision

- The Court of Appeals disapproved the preliminary injunction because it rested on an overly expansive reading of the non-solicitation provision.
- The court rejected the construction that effectively barred the former employees from any involvement in Vitesse’s hiring process involving Atmel employees.
- The court concluded the injunction’s additional restraint—prohibiting Atmel employees from initiating contact with Vitesse—went beyond the contractual promise at issue.
- The court reversed the order setting the bond at $5,000 as an abuse of discretion.
- The court remanded for proceedings to determine damages and attorney’s fees proximately resulting from the wrongful injunction.

## Legal Principles

- Employment restrictive covenants are construed according to their plain language, informed by the parties’ intent and, where relevant, evidence of industry practice.
- A court may not transform a non-solicitation covenant into a broader restraint on post-employment conduct absent clear contractual language supporting that expansion.
- A preliminary injunction must be tied to the rights and duties created by the underlying contract; restraints not grounded in the contract’s terms are improper.
- Under Colorado Rule of Civil Procedure 65(c), the bond must be set in an amount sufficient to protect the enjoined party against reasonably foreseeable damages from an erroneous injunction.
- A party wrongfully enjoined may seek damages and attorney’s fees caused by the injunction, subject to proof of proximate causation on remand.

## Conclusion

The Court of Appeals limited enforcement of the non-solicitation clause to what its language and demonstrated intent supported, disapproved an injunction that extended beyond those bounds (including restrictions on employee-initiated contact), reversed an inadequately low Rule 65(c) bond, and remanded to determine recoverable damages and attorney’s fees stemming from the wrongful injunction.


Atmel Corp. v. Vitesse Semiconductor Corp., 30 P.3d 789 (Colo. App. 2001)