## Facts

- Peter K. Maizitis worked for TUV America, Inc. (TUV) and was moved into a managerial position.
- In connection with that change in role, Maizitis and TUV signed an employment agreement containing a post-employment non-solicitation provision.
- The provision stated that for two years after the end of Maizitis’s employment, he could not solicit TUV’s employees, vendors, or customers.
- TUV terminated Maizitis’s employment on May 22, 2002.
- After termination, Maizitis claimed he believed the non-solicitation provision was valid and that this belief affected his later employment choices and business activity.
- TUV did not attempt to enforce the provision against Maizitis through threats, a demand letter, litigation, or an injunction.
- The two-year restriction expired in May 2004.
- In February 2005, Maizitis sued TUV seeking contract damages, claiming he had been compelled to enter into and comply with an agreement that was contrary to public policy.
- Maizitis did not claim that TUV breached the employment agreement, and he did not bring tort claims or statutory claims.
- Maizitis also did not seek declaratory relief or injunctive relief while the restriction was still in effect.
- TUV moved for summary judgment.

## Issues

1. Can a former employee recover contract damages based only on having signed and self-complying with a non-solicitation clause that the employer never enforced and that expired before suit?
2. Does a claim for damages lie where the plaintiff alleges no breach of contract and no independent wrongful act, but argues the restrictive covenant was contrary to public policy?

## Decision

- The court granted summary judgment to TUV and entered judgment in its favor.
- The court held Maizitis could not recover contract damages on these facts because he alleged no breach by TUV and identified no independent basis for liability.
- The court treated the non-solicitation clause’s lack of enforcement and its expiration before suit as fatal to Maizitis’s attempt to obtain retrospective damages based on his voluntary self-restraint.

## Legal Principles

- Contract damages generally require a breach of a contractual duty (or another recognized wrong tied to a legal duty) and proof of resulting compensable loss.
- A restrictive covenant that is arguably unenforceable or against public policy does not, by itself, create a stand-alone right to money damages for the party who signed it, absent a breach or other wrongful conduct by the opposing party.
- Where an employer does not attempt to enforce a post-employment restriction, a former employee’s unilateral decision to refrain from competition or solicitation is not, without more, a basis for imposing damages on the employer.
- Challenges to restrictive covenants are ordinarily addressed through non-enforcement and, when timely, declaratory or injunctive relief while the restraint is operative; once the restraint has expired and was never invoked, a damages-only action faces a lack of a viable legal theory.

## Conclusion

Maizitis v. TUV America, Inc. holds that a former employee cannot obtain contract damages merely because he signed and chose to comply with an allegedly improper non-solicitation clause when the employer never tried to enforce the clause, the restriction expired before the lawsuit, and the employee alleged no breach of contract and no other actionable wrong.


Maizitis v. TUV America, Inc., 2014 WL 2921905 (2014)