A recent decision from the Bankruptcy Court in Denver examines (and struggles with) some of the many issues that arise when a person subject to a noncompete files for bankruptcy.

In In re Hruby, 2014 WL 2071997, Debtor had been employed by Midwest Motors, but quit and apparently took another job with a competitor and made sales to customers that he serviced when he was employed with Midwest. There was evidence that the debtor had accessed Midwest’s computer files containing confidential customer information and that debtor had utilized Midwest’s confidential customer information to solicit Midwest’s customers. The debtor had signed a noncompete agreement when he was employed by Midwest. The noncompete included a noncompete provision (two years from the time any violation ceased) and a non-solicit provision that barred solicitation or service of any customers  contacted, serviced or supervised by the employee. The noncompete agreement called for the application of Ohio law and stated that any enforcement action “must” be filed in Ohio.


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In a June 12, 2009 decision, Haggard v. Spine, Judge Arguello of the federal district court in Colorado ruled that Colorado law should be applied to determine the enforceability of a non-compete despite the parties’ agreement that Pennsylvania law should govern. 

Consistent with Colorado’s choice-of-law rules,  Judge Arguello concluded that the law chosen by the parties