WebMD Health Corp. v. Anthony T. Dale

Plaintiff, WebMD Health Corp., sued Anthony T. Dale, a former employee, alleging by accepting employment with Health Grades, Inc., Dale breached his Restrictive Covenant Agreement, violated Delaware’s Uniform Trade Secrets Act, engaged in unfair competition, and converted WebMD’s trade secrets and confidential information. Plaintiff then moved for a preliminary injunction to enjoin Dale from employment with Health Grades for one year.

WebMD’s complaint alleged that in Dale’s ten years of employment, including three years as Group Vice President, he was exposed to, and involved in the development of, highly confidential information such as pricing policies, product development plans, business plans, sales strategies, and market positioning. Further, it stated that Health Grades was a direct competitor as defined by the terms of the restrictive covenants that Dale signed and that he could not perform the role he has planned at Health Grades without using WebMD’s confidential information, either consciously or inadvertently.

The District Court for the Eastern District of Pennsylvania, applying Delaware Law, granted WebMD’s motion for a preliminary injunction, finding that WebMD was likely to succeed on the merits. However, the court also found that that the definition for “competing businesses” in the restrictive covenants was overbroad and thus it “blue penciled” the definition to only restrict Dale’s involvement online advertising of health and wellness-related products, which constituted a marginal portion of Dale’s responsibilities at Health Grades.

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