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October 9, 2025
North Carolina’s Business Court recently invalidated an employee’s non-competition agreement, finding that it was overbroad in terms of time, scope, and geography. See Atkore Int’l, Inc. v. Dinkheller, No. 24CV022644-400, 2025 NCBC 20 (Apr. 10, 2025). This decision serves as a reminder to employers to tailor their restrictive covenants narrowly.
Dinkheller’s Employment with Atkore
In 2013, Dinkheller began working at Atkore, a manufacturer of electrical conduit and fittings. Dinkheller held many positions at Atkore, including Manager of Production Control, Production Manager, Plant Manager, and Regional Director of Operations. Dinkheller resigned from Atkore in January 2023 to work in another industry, but rejoined Atkore several months later as Atkore’s Director of Technical Program Management. In June 2023, Dinkheller executed a Confidentiality, Non-Competition, Non-Solicitation and Proprietary Rights Agreement (Agreement).
Dinkheller’s Agreement with Atkore
Dinkheller’s Agreement states that, for 12 months following his employment with Atkor, he will not, directly or indirectly, provide services to or engage with any business within the Restricted Territory that is directly or indirectly competitive with Atkore to the extent such services or engagement are the same as, or substantially similar to, the services that Dinkheller performed for Atkore during the two-year period preceding Dinkheller’s departure from Atkore.
The Agreement defines Atkore as “Atkore International, Inc., [and] its parents, subsidiaries, affiliates, successors, and assigns.”
The Agreement defines “Restricted Territory” as any country, state, region, territory, or geographic location in which Dinkheller provided services to or on behalf of Atkore or within which he had a material presence or influence for Atkore, within the two-year period preceding Dinkheller’s departure from Atkore’s employment.
Dinkheller Moves to National Pipe and Atkore Sues
In August 2024, Dinkheller accepted a position as a Director of Operations with National Pipe, a company that manufactures and sells infrastructure products in the energy, water, and telecommunications industries.
Atkore filed a lawsuit against Dinkheller and National Pipe that sought to enforce the non-competition provisions of Dinkheller’s Agreement because he joined National Pipe, a competitor, within 12 months of his resignation from Atkore. Dinkheller and National Pipe moved to dismiss the claims.
Relevant Law
In North Carolina, restrictions on an employee’s future employability must be no wider in scope than is necessary to protect the business of the employer. If a non-competition restriction is too broad to be a reasonable protection of the employer’s business, a court will not enforce it and will not rewrite it to be enforceable.[1] Based on those principles, courts in North Carolina have declined to enforce restrictions that prohibit an employee from directly or indirectly having any association with competing businesses.[2] In addition, North Carolina courts typically view a restriction as to territory as reasonable only to the extent that it protects the legitimate interests of the employer to maintain its customers.[3] Furthermore, courts find a restriction’s geographic scope reasonable if it encompasses only the area served by the business.[4]
The Court Finds the Non-Competition Provisions of Dinkheller’s Agreement Overbroad
Here, the Business Court concluded that Dinkheller’s Agreement was overly broad and unreasonable as a matter of law. Specifically, the Court found that the time, scope, and geographic restrictions, when considered as a whole, were overly broad and not reasonably limited to protecting Atkore’s business interests. In concluding that the Agreement was overbroad, the Court pointed to the (1) time restrictions, including the two-year lookback period; (2) the broad definition of Atkore, which could encompass many entities beyond Atkore; and (3) the geographic restriction, which essentially covers the entire country.
The Court Allows Atkore’s Claims Based on the Non-Disclosure Provisions to Continue
Though the Court dismissed Atkore’s breach of contract claim based on the Agreement, it allowed Atkore to proceed with its claim that National Pipe interfered with Dinkheller’s nondisclosure obligations of which National Pipe was aware “by placing Dinkheller in a position where he has disclosed and is utilizing Atkore’s confidential information and trade secrets.” North Carolina law distinguishes between non-competition agreements – which may be deemed to restrain trade – and confidentiality agreements, which are meant only to prevent the disclosure or use of confidential information.[5] The Court found that Atkore had plead sufficient facts to survive dismissal of this claim at this early stage.
Employer Takeaways
This case highlights how important it is to tailor restrictive covenants narrowly to protect your legitimate business interests, taking into account the former employee’s role in the company. This case further highlights viable alternatives to non-competition agreements. For example, non-disclosure (confidentiality) agreements can be effective in protecting your proprietary information and trade secrets, and, when such agreements clearly and reasonably define what constitutes confidential information, they are subject to much less judicial scrutiny.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, North Carolina, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issue.
[1] PDF Elec. & Supply Co., LLC v. Jacobsen, No. 20 CVS 4609, 2020 NCBC LEXIS 103, at *17-18 (N.C. Super. Ct. Sept. 9, 2020).
[2] See, e.g., Hartman v. W.H. Odell & Assocs., 117 N.C. App. 307, 308 (1994).
[3] See Hejl v. Hood, Hargett & Assocs., Inc., 196 N.C. App. 299, 306 (2009).
[4] Beverage Sys. of the Carolinas, LLC v. Associated Beverage Repair, LLC, 368 N.C. 693, 698 (2016).
[5] See Amerigas Propane, L.P. v. Coffey, No. 14 CVS 376, 2015 NCBC LEXIS 98, at **10 (N.C. Super. Ct. Oct. 15, 2015).
