## Facts

- Marshalltown Trowel Company employed Fred S. Bendinger as an industrial engineer in its trowel-manufacturing operation.
- As a condition of employment, Bendinger signed a restrictive covenant containing (1) a confidentiality/non-disclosure commitment and (2) a two-year noncompetition provision.
- The noncompetition provision barred Bendinger from working for a competitor for two years after leaving Marshalltown and contained no express geographic limitation.
- Bendinger resigned and accepted employment as a plant manager with Kraft Tool Company, a competitor in the same industry.
- Marshalltown asserted Bendinger had exposure to sales information, manufacturing methods, and internal production/marketing information, and that his role at Kraft would cause him to use or disclose that information.
- Bendinger maintained he had only general industry knowledge and lacked access to specific items such as customer lists, detailed blueprints, or other identified secret documents.

## Issues

1. Whether a two-year noncompetition agreement with no geographic limitation is reasonable and enforceable under Arkansas law.
2. Whether the Arkansas Trade Secrets Act permits a permanent injunction based on an “inevitable disclosure” theory where the employee’s trade-secret knowledge is found to be minimal and misappropriation is not shown as actual or threatened.

## Decision

- The Arkansas Supreme Court declined to uphold enforcement of the noncompetition provision as written, treating the absence of a geographic limitation as a serious defect under Arkansas reasonableness standards for restraints on trade.
- The court affirmed the denial of a permanent injunction under the Arkansas Trade Secrets Act, concluding the evidentiary showing did not establish actual or threatened misappropriation and did not justify relief based only on “inevitable disclosure.”

## Legal Principles

- Covenants not to compete are disfavored and are enforceable only if narrowly tailored to protect legitimate business interests and reasonable in duration and geographic scope.
- A noncompete that omits a geographic limitation is strongly suspect and may be unreasonable because it can operate as an overly broad restraint on employment.
- Injunctive relief under the Arkansas Trade Secrets Act requires proof of actual or threatened misappropriation; speculative concerns that a new job might cause use of confidential know-how are insufficient.
- Contract-based noncompete enforcement and statutory trade-secret remedies are analyzed independently; invoking trade-secret concerns does not cure an overbroad contractual restraint.

## Conclusion

The court treated a noncompete lacking geographic limits as an unreasonable restraint and refused to grant trade-secret injunctive relief where the employer showed only speculative risk rather than actual or threatened misappropriation.


Bendinger v. Marshalltown Trowel Co., 994 S.W.2d 468 (Ark. 1999)