Reference no: EM131919251

Prepare a detailed response to following Case Problem:

Regina Morrison was hired 5 years ago by Mossbay All Terrain Vehicles, Inc. of Boston, Massachusetts as their Director of Information Technology for the entire chain of ATV stores. Regina signed a standard Mossbay employment contract setting forth all of the terms of her employment such as work hours, salary, stock options, health benefits, vacation, etc.

It was the standard corporate employment contract just like those signed by all the other department heads at Mossbay. Regina was very good at her job and helped the company realize considerable gains in productivity and efficiency because of the various technological enhancements she made at the corporate headquarters as well as at all of the branch stores.

Rex Wilkerson, Mossbay's CEO and President, recognized Regina's contributions and considered her a very valuable asset for the corporation. While attending some corporate executive training sessions at a national conference in Chicago, Rex sat in on a workshop that addressed the use of "No Compete" clauses in employment contracts.

The workshop leader pointed out some significant examples of corporate personnel who had left one place of business only to move to a competitor's place of business. Traditionally such moves were of considerable benefit to the new employers. When Rex got back to the Mossbay corporate HQ, he discussed the workshop's findings with his Director of Human Resources, Kelly Unangst.

Kelly informed Rex that while all Mossbay department heads had clauses in their contracts stating that they could not reveal any Mossbay proprietary information (trade secrets, customers lists, etc.) to any new employer, no Mossbay employees had an actual "No Compete" clause in their contract. Rex instructed Kelly to prepare such a contract amendment and then have each corporate employee come to her office, read and sign the clause, and have it placed in their personnel file.

Regina, like all the other employees, signed the clause and had a copy given to her as well as acknowledging that one was being placed in her personnel file. The clause stated that Regina could not go to work as a director of information technology (or any similar titled position) for any business within 500 miles of Mossbay's corporate HQ involved in the manufacture, sale, or servicing of all terrain vehicles for one (1) year after leaving Mossbay.

Within a month of signing the contract amendment. Regina resigned her position at Mossbay and became the VP, Information Systems at New Adventures All Terrain Vehicles, Inc. in Hartford, Connecticut. Upon learning this information, Mossbay CEO Wilkerson instructed his legal department to prepare a lawsuit against Regina for violation of her "No Compete" clause.

You are the Chief Legal Counsel for Mossbay ATV, Inc. What advice would you give CEO Wilkerson on the likelihood of winning this lawsuit against Regina? Why?