## Facts

- Robert L. Desatnick worked in advertising for many years and managed the Campbell account while at an outside advertising agency.
- In 1994, after Desatnick received another job offer, Campbell Soup Company recruited him to join Campbell in-house in an advertising leadership role.
- Desatnick later rose to Vice President of Global Advertising and Promotion, a position that placed him in high-level management discussions about Campbell’s corporate strategy, finances, and marketing plans.
- In 1997, Campbell implemented a restrictive-covenant program for certain executives and required Desatnick to sign a noncompetition agreement.
- The agreement contained an unusual “safety net”: if Desatnick left Campbell and was barred from competing, Campbell would guarantee his income during the full 18-month restricted period.
- Over time, Desatnick became dissatisfied at Campbell and explored employment with The Pillsbury Company, a competitor.
- During discussions with Pillsbury, Desatnick shared views on how Pillsbury could improve its competitive position against Campbell.
- Pillsbury offered Desatnick a senior role as its top marketing executive, and Desatnick accepted.
- Desatnick resigned from Campbell on April 8, 1999, at a time when Campbell was implementing strategic initiatives in which he had been heavily involved.
- Campbell sued in federal court to enforce the noncompetition agreement and prevent Desatnick from starting at Pillsbury.
- Desatnick opposed enforcement and moved for a preliminary injunction to stop Campbell from enforcing the covenant, contending (among other points) that he could limit his duties at Pillsbury to reduce any competitive risk.
- The court held an evidentiary hearing and considered testimony and exhibits before ruling on Desatnick’s motion.

## Issues

1. Whether Desatnick was entitled to a preliminary injunction barring Campbell from enforcing the 1997 noncompetition agreement.
2. Whether Desatnick showed a reasonable likelihood of success on the merits that the noncompetition agreement was unenforceable because Campbell had no legitimate protectable interest to support it.
3. Whether Desatnick showed a reasonable likelihood of success that the agreement was unenforceable based on an alleged prior oral understanding from his 1994 hiring that he would not be required to sign a noncompetition agreement.
4. Whether Desatnick showed a reasonable likelihood of success that the agreement was voidable for lack of consideration or because he signed under economic duress.
5. Whether Desatnick’s offer to restrict or narrow his job responsibilities at Pillsbury justified enjoining enforcement at the preliminary-injunction stage.

## Decision

- The court denied Desatnick’s motion for a preliminary injunction.
- The court concluded Desatnick did not meet his burden to show a likelihood of success on the merits, which was sufficient to deny preliminary relief.
- The court found Campbell had a legitimate interest in protecting confidential, high-level business information to which Desatnick had access in his executive role, particularly given the competitive proximity between Campbell and Pillsbury and the seniority of the Pillsbury position.
- The court was not persuaded, on the record at the preliminary stage, that an enforceable oral agreement from 1994 barred Campbell from later requiring Desatnick to sign a noncompetition covenant.
- The court was not persuaded, on the preliminary record, that the 1997 covenant was invalid for lack of consideration or that it was executed under economic duress, especially in light of the agreement’s income-guarantee feature.
- The court declined to block enforcement based on Desatnick’s suggestion that he could temporarily limit his duties at Pillsbury, given the nature of the information he knew and the difficulty of separating his knowledge from his work in a top marketing role.

## Legal Principles

- A preliminary injunction requires the movant to establish: (1) likelihood of success on the merits, (2) irreparable harm absent relief, (3) that the balance of hardships favors the movant, and (4) that relief is consistent with the public interest; failure to show likely success can warrant denial.
- Under New Jersey law, a covenant not to compete is generally enforceable if it protects the employer’s legitimate interests (such as confidential information and trade secrets), imposes no undue hardship on the employee, and is not injurious to the public.
- An employer’s legitimate interest may include protecting strategic plans, marketing direction, and other non-public competitive information learned by a senior executive through participation in high-level planning and decisionmaking.
- In assessing enforceability and interim relief, courts consider the employee’s role, the competitive proximity between the former and prospective employers, and the practical risk of disclosure or use of confidential information.
- A claimed oral employment agreement that would restrict an employer’s ability to later require a noncompete must be shown with sufficient clarity and definiteness; at the preliminary-injunction stage, uncertainty in the proof weighs against a finding of likely success.
- Economic duress generally requires wrongful or unlawful pressure that leaves no reasonable alternative; requiring a noncompete as a condition of continued executive employment, without additional wrongful conduct, typically does not satisfy that standard.
- Consideration for a restrictive covenant may be supported by the overall employment relationship and benefits provided; an agreement that guarantees pay during the restricted period can bear on the consideration and hardship analysis.

## Conclusion

The court refused to enjoin Campbell from enforcing Desatnick’s 18-month noncompetition agreement because Desatnick did not demonstrate a sufficient likelihood of proving the covenant unenforceable on his main theories (lack of protectable interest, alleged prior oral promise, lack of consideration, or economic duress), and the record showed he had access to confidential, high-level strategic information that Campbell had a valid interest in protecting against immediate use in a top marketing position at a close competitor.


Campbell Soup Co. v. Desatnick, 58 F. Supp. 2d 477 (1999)