Jun 27, 2007 7:33 pm US/Central
Noncompete Contracts At Heart Of MN Publisher Suit
St. Paul (AP) ―
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Ridder and the two other Pioneer Press officials he hired after moving across town to the Star Tribune in March acknowledged they never got anything in writing. (File)
CBS
At the heart of the legal case against Par Ridder, publisher of the Minneapolis Star Tribune, is what sounds like a simple question: Is the noncompete agreement he signed as publisher of the rival St. Paul Pioneer Press still valid?
Attorneys for both newspapers spent three days hashing out that question this week before Ramsey County District Judge David Higgs, who has been asked to grant a temporary injunction barring Ridder and two other former Pioneer Press executives from working for the Star Tribune for at least a year.
Much of the attention at this week's hearing focused on the computer files Ridder acknowledged he took with him to the Star Tribune containing confidential information about Pioneer Press advertisers, finances and personnel. Attorneys for the Pioneer Press point to those actions when they argue that the St. Paul newspaper has been grievously harmed by Ridder's defection and his continued work for the Star Tribune.
But the case still hinges in large part on whether Ridder is bound by the noncompete agreement he signed about two weeks after he was hired as publisher of the Pioneer Press.
"Either way I think it's going to be a close call," said Marshall Tanick, a local employment lawyer who's been following the case.
Ridder maintained in his testimony he's certain that Art Brisbane, a senior vice president at Knight Ridder Inc. which used to own the Pioneer Press, verbally released him and other senior members of his management team from their noncompetes late in 2005.
Brisbane, however, testified he had no recollection of doing that, and that he was sure he would have discussed the matter with other senior Knight Ridder officials before agreeing.
Ridder and the two other Pioneer Press officials he hired after moving across town to the Star Tribune in March acknowledged they never got anything in writing, something Tanick said would be expected.
Absent a written release, Tanick said, courts will look for some other evidence such as witnesses to a verbal agreement. Tanick said it might help that Ridder testified he told others Pioneer Press officials at the time that Brisbane had rescinded the noncompetes.
Several experts said Minnesota courts are generally cool toward noncompete agreements.
"Minnesota has said we essentially don't like them for a couple reasons," said David Allen Larson, an employment law professor at the Hamline University School of Law. "One is because they decrease competition in the market and we believe (competition) is a good thing. And secondly, they restrict an employee's right to work."
The state's standards are that noncompetes must be reasonable and limited in the time and territory where they apply. Courts must balance an employer's need for protection from unfair competition against an employee's ability to make a living. And an employer must have a legitimate business interest for requiring them.
But there's another issue that some Minnesota employment attorneys said might be decisive.
When an employee signs a noncompete agreement after they've already been hired -- as Ridder did -- state law also requires they be given "consideration" -- some sort of monetary or other compensation they would not have received otherwise.
The Star Tribune's attorneys contend Ridder wasn't given consideration and his agreement is therefore void, independent of whether it was properly rescinded. But his situation is unusual. Ridder testified that it was his own idea that he should sign a noncompete. He said he was afraid of how it would look to other members of his management team, who had signed them, if he did not.
It's not clear if it makes a difference that it was Ridder who brought up the subject.
"The fact that he asked for it really makes it kind of a novel twist on the issue," said Karen Schanfield, an attorney who co-authored a textbook on Minnesota employment law.
As the hearing ended Wednesday afternoon, Judge Higgs gave both sides until July 3 to submit additional materials and until July 16 to file their final arguments. He said he would rule after that.
"Despite all the high-tech issues and complexities and legal jargon, the resolution of the case may come down to a simple question: Who is telling the truth? Who does the judge think is telling the truth?" Tanick said.
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