CVS Pharmacy, Inc. v. Lavin

. The reasonableness of a

covenant depends on factors such as whether it is narrowly

tailored; whether its scope is reasonably limited in activity,

geography, and time; whether the hardship to the employee outweighs

the employer's need for protection; and whether enforcement of the

covenant is likely to harm the public interest. See R.J. Carbone

Co. v. Regan,

582 F. Supp. 2d 220, 225

(D.R.I. 2008). Whether a

covenant is reasonable is a question of law. Durapin,

. If a covenant is unreasonable, a court may nevertheless

modify and enforce the covenant, under Rhode Island's partial

enforcement doctrine, to the extent reasonably necessary to

protect the employer's legitimate interests, so long as there is

- 11 - "no evidence of bad faith or deliberate overreaching on the part

of the promisee."

Id. at 1058

Lavin insists that the covenant here is unreasonable and

therefore not enforceable because its definition of "Competition,"

which incorporates its expansive definition of "Competitor," is

overly broad. While Lavin does not contest that his new position

at PillPack falls within the scope of the covenant's prohibited

activities, or that PillPack qualifies as a Competitor under the

terms of the Agreement, he contends that, because the covenant

sweeps more broadly than necessary to protect CVS's confidential

information, the covenant as a whole is unreasonable and, hence,

unenforceable. In other words, Lavin asserts that the

reasonableness of the covenant must be assessed facially.

CVS urges a different view of the reasonableness

inquiry. While CVS does appear at points in its brief to defend

the covenant as facially reasonable, it ultimately urges us to

analyze reasonableness in light of the district court's factual

findings about the ways in which Lavin might violate the covenant.

CVS contends that, because Rhode Island law requires courts to

consider the particular facts of a case, courts cannot consider

the language of restrictive covenants in a vacuum or rely on

hypothetical employment constraints to assess whether a particular

covenant imposes a reasonable restriction. Instead, the court

should take an "as-applied" approach to assessing reasonableness:

- 12 - the court should consider only whether its enforcement in a

particular instance -- here, to prevent Lavin from starting his

job at PillPack -- is reasonable. Even if the covenant may sweep

more broadly than necessary to protect CVS's legitimate interests,

that is an issue for another day under CVS's view of the law. As

it turns out, both parties' interpretations of Rhode Island law

draw support from the applicable precedent and secondary sources

embraced by the Rhode Island Supreme Court.

B. Two Views of Reasonableness under Rhode Island Law

The Rhode Island Supreme Court has made clear that the

reasonableness of a covenant is fact-specific: "[w]hen considering

the validity of a noncompetition agreement, the crucial issue is

reasonableness, and that test is dependent upon the particular

circumstances surrounding the agreement." Durapin,

(citing Max Garelick, Inc. v. Leonardo,

250 A.2d 354, 356-57

(R.I. 1969)). The Second Restatement of Contracts, which the Rhode

Island Supreme Court has adopted, see Cranston Print Works,

; see also Nestle Food Co. v. Miller,

836 F. Supp. 69, 73-74

(D.R.I. 1993), also affirms that "[w]hat limits as to

activity, geographical area, and time [in a restrictive covenant]

are appropriate in a particular case depends on all the

circumstances," Restatement (Second) of Contracts § 188, cmt. d

(Am. Law Inst. 1981).

- 13 - However, it is not clear whether an assessment of "the

particular circumstances" means that Rhode Island law calls for a

facial review of a covenant, as Lavin contends, or as applied, as

CVS argues. On the one hand, Rhode Island's policy concerns about

restrictive covenants weigh against a case-specific approach.

See, e.g., Cranston Print Works,

(stating that

covenants not to compete are "disfavored" and subject to "strict

judicial scrutiny"); see also 6 Williston on Contracts § 13:4 (4th

ed. 2019) (describing concerns that restrictive covenants can be

"oppressive" and injurious to the public interest). As Lavin

points out, covenants preventing free job movement diminish

competition and can influence employees' decisions even before an

employer seeks to enforce a covenant in court. This general

skepticism suggests that courts should engage in facial review of

covenants. Such review would incentivize the drafting of narrow

noncompetition agreements and combat the negative impact of

sweeping covenants.

Facial review is also consistent with the Rhode Island

Supreme Court's repeated formulation of the reasonableness inquiry

as focused on the agreement as a whole. See, e.g., Cranston Print

Works,

(noting that the party seeking enforcement

must show that "the contract is reasonable" (emphasis added));

Durapin,

(stating that assessing the

reasonableness of a covenant depends on "the particular

- 14 - circumstances surrounding the agreement" (emphasis added));

Oakdale Mfg. Co. v. Garst,

28 A. 973, 974

(R.I. 1894) (stating

that "[t]he test [of reasonableness] is to be applied according to

the circumstances of the contract").

On the other hand, Rhode Island courts have, at times,

used language that emphasizes the importance of assessing

reasonableness based on the facts of a given case, echoing a

traditional as-applied test. See, e.g., Mento v. Lanni,

262 A.2d 839, 841-42

(R.I. 1970) (noting that "since we are dealing with

the concept of reasonableness, each case must be judged on its own

facts" (emphases added)). In Mento, for instance, the defendant,

Lanni, sold the plaintiff, Mento, a barber shop and, in the bill

of sale, agreed "not [to] open another barber shop under the same

name or any other name within a two-mile radius of the shop."

Id. at 839

. Although Lanni continuously operated a barber shop in

Providence after the sale, it was only after five years that he

opened a shop somewhere less than two miles from the original

location, in violation of the agreement.

When Mento sued to

enforce the agreement, the Rhode Island Supreme Court considered,

in assessing the agreement's reasonableness, numerous facts,

including the number of customers Mento claimed he had lost after

Lanni opened his shop and that Mento had himself seen his business

grow from one to three barbers.

Id. at 842

. Based on these facts,

the court concluded that enforcing the agreement after this much

- 15 - time had passed was unreasonable, even though the agreement itself

included no temporal restriction.

Id. at 842-43

The Corbin on Contracts treatise, which the Rhode Island

Supreme Court has cited favorably, see Durapin,

559 A.2d at 1059

arguably supports such an as-applied approach. After noting that

courts often have difficulty determining the precise bounds of a

reasonable restriction, the treatise explains that making such a

determination is often unnecessary because "[t]he question before

the court tends usually to be whether a restriction against what

the defendant has done in fact or is threatening to do would be a

reasonable and valid restriction." 15 Corbin on Contracts § 80.26

(2019). Accordingly, "[t]he court should always permit the

plaintiff to show the actual extent of the protectable interest

that is involved and that the defendant has committed a breach

within that extent."5 Id. (emphasis added). In this case, for

instance, the covenant at issue includes six kinds of Competitors,

only two of which were relevant to the district court's conclusion

that PillPack was a Competitor. Under a facial review, CVS would

5 We acknowledge, as Judge Selya points out in his concurrence, that this passage appears in a section of the treatise entitled "Partial Enforcement of Restrictive Covenants." 15 Corbin on Contracts § 80.26. However, the language in the passage suggests that the described approach is the way that courts should always approach their analysis of a covenant's reasonableness. Whether, by doing so, courts are, in fact, conducting a partial enforcement analysis, as Judge Selya contends, we think unclear both from the treatise and the caselaw.

- 16 - nevertheless need to justify the breadth of that definition, even

though that broad inquiry would have little to do with the actual

controversy between the parties. The as-applied approach avoids

that inefficient mismatch.

Indeed, we see the potential unwieldiness of the facial

approach as strong support for CVS's view of the reasonableness

inquiry. By their nature, lawsuits to enforce covenants not to

compete must be decided quickly and, often, as here, at the

preliminary injunction stage. Engaging in a meaningful facial

review of an agreement would often require extensive discovery.

For this reason, as the Corbin treatise suggests, the as-applied

approach may be more workable for courts.

C. The Reasonableness of CVS's Agreement

As the discussion above reveals, we are presented with

two compelling views of Rhode Island law, which reflect a tension

between the state's policy concerns, addressed by the facial

approach, and the practical benefits of the as-applied approach.

Typically, when a federal court is confronted with an unresolved

question of state law, our job is to "ascertain the rule the state

court would most likely follow under the circumstances." Blinzler

v. Marriott Int'l, Inc.,

81 F.3d 1148, 1151

(1st Cir. 1996). We

may look to "analogous state court decisions, persuasive

adjudications by courts of sister states, learned treatises, and

public policy considerations identified in state decisional law"

- 17 - for guidance.

But we must "take care not to extend state law

beyond its well-marked boundaries in an area . . . that is

quintessentially the province of state courts." Markham v. Fay,

74 F.3d 1347, 1356

(1st Cir. 1996).

Here, however, we need not take a position on which

understanding of Rhode Island law is correct, because, under either

analytical framework, as we explain, the outcome would be the same.

1. As-Applied Review

Before assessing whether the Agreement was reasonable,

the district court had to consider whether Lavin's new job at

PillPack fell within the Agreement's prohibited activities. The

district court concluded that it did. CVS Pharmacy,

384 F. Supp. 3d at 236

. In making this threshold determination, the district

court made numerous factual findings, including that "it is highly

likely that Mr. Lavin's new employment will result in the

disclosure of Confidential Information" to PillPack, "a Competitor

in the industry."

Under Rhode Island law, "a business's

confidential information . . . may qualify as a legitimate

interest" that a noncompetition agreement can protect. Astro-Med,

Inc. v. Nihon Kohden Am., Inc.,

591 F.3d 1, 17

(1st Cir. 2009).

Lavin contends that there are narrower means to protect

CVS's interest in its confidential information than preventing him

from assuming the position at all. Specifically, Lavin points out

that the 2017 RCA also contains nondisclosure and nonsolicitation

- 18 - provisions. He argues that these provisions suffice to protect

CVS's confidential information from PillPack. Thus, he contends,

the Agreement as applied even to his specific position at PillPack

is unreasonable because barring Lavin's employment entirely,

rather than imposing other restrictions on what he can do at

PillPack, is too broad a restraint.

We disagree. The district court's factual findings show

that Lavin has extensive knowledge of CVS Caremark's strategic

initiatives and detailed information about its contracts with

retail pharmacies and payers. It strains credulity to think that

a top-echelon executive like Lavin could develop a strategy for

PillPack without dipping into this knowledge. Indeed, as the

district court found, see CVS Pharmacy,

384 F. Supp. 3d at 230

PillPack hired Lavin in part to help develop tactics to disrupt

the industry, a role that he is suited to perform chiefly because

of his knowledge of strategic initiatives developed by a major

industry player.

For similar reasons, PillPack's and Lavin's

representations that Lavin will not participate in any work

involving CVS Caremark or its clients are not sufficient to protect

CVS's confidential information, such that enforcing the Agreement

here would be unreasonable. As the district court found, in his

new position, Lavin would report directly to PillPack's CEO,

id.,

who, in turn, would be overseeing work related to CVS. PillPack's

- 19 - CEO has indicated that the two would communicate openly about

Lavin's strategy for negotiating with PBMs other than CVS, Lavin's

"primary responsibility" at PillPack.

Id. at 234

. Thus, the

confidential information Lavin gained from his years at CVS

Caremark, which would inevitably inform his strategy in

negotiating with other PBMs, would indirectly inform the CEO's

similar negotiations with CVS Caremark.6

For these reasons, we conclude that, under an as-applied

approach, enforcing the Agreement to bar Lavin from working at

PillPack is reasonable. The narrower means that Lavin has argued

would protect CVS's confidential information are insufficient

based on the district court's unchallenged factual findings about

Lavin's role at CVS and his new position at PillPack.

2. Facial Review and Partial Enforcement

In granting the preliminary injunction for CVS, the

district court took the facial approach and held that, as written,

the Agreement was reasonable and, thus, enforceable.

at 236-

6 In his reply brief, Lavin also asserts that barring him from working for PillPack would impose an undue hardship upon him and, at the same time, offend the public's interest in a competitive pharmaceutical industry, factors relevant in assessing reasonableness under Rhode Island law. See R.J. Carbone,

582 F. Supp. 2d at 225

. Although Lavin made passing references in his opening brief to his inability to work, he did not develop this argument there, and it is therefore waived. See Lawless v. Steward Health Care Sys., LLC,

894 F.3d 9, 25

(1st Cir. 2018) (holding that arguments advanced for the first time in an appellant's reply brief are deemed waived).

- 20 - 37. The court concluded that "[t]he non-competition provision in

the Agreement is tailored to serve CVS's legitimate interest in

protecting its Confidential Information and is reasonable in

duration and scope."

In reaching this determination, it noted

that "[t]he Agreement specifically and narrowly defines both what

qualifies as 'Competition' and who qualifies as a 'Competitor' to

protect its legitimate interests." Id. at 237.

We are not prepared, at this preliminary stage of the

litigation, and on the record before us, to adopt the district

court's conclusion that the Agreement is reasonable on its face.

For example, CVS has not explained how the lengthy list of

"Competitors" in the RCA meets the narrow-tailoring requirement of

Rhode Island law.

However, our analysis under this facial framework does

not end simply because we decline to take a position on the

Agreement's facial reasonableness. As explained above, Rhode

Island has adopted the doctrine of partial enforcement, which

permits the enforcement of overly broad covenants to the extent

reasonable, so long as there is no bad faith or deliberate

overreaching by the employer. Durapin,

582 F. Supp. 2d at 225-26

. The

district court concluded that this case did not involve deliberate

overreaching. CVS Pharmacy,

384 F. Supp. 3d at 237

n.9.7

7Lavin disputes this finding on appeal. But he has not identified any evidence that persuades us that the district court's

- 21 - Therefore, even if Rhode Island does require a facial review of a

covenant's terms, and even assuming CVS failed such a review here,

we conclude that, pursuant to the partial enforcement doctrine, it

is reasonable to enforce the Agreement to prevent Lavin from

commencing his work at PillPack for the specified duration. That

is, even if the Agreement is facially overbroad, an assumption

that we make here for the purpose of analysis, the doctrine of

partial enforcement permits us to "modify" the overly broad

Agreement and enforce it to the extent reasonable. Here, we

conclude that Lavin's new role at PillPack would fall within the

bounds of activities prohibited by the Agreement, even assuming

its scope needed to be reduced to make it reasonable.

We acknowledge that we have found no Rhode Island cases

that use the partial enforcement doctrine in this way. Typically,

courts interpreting Rhode Island law have used the doctrine to

reduce a temporal or geographic restriction that a party is

attempting to enforce but that a court concludes is unreasonable.

See, e.g., Astro-Med, Inc.,

591 F.3d at 14-15

; R.J. Carbone Co.,

. For instance, in R.J. Carbone Co., the

defendant, Timothy Regan, who had worked as a salesman for Carbone,

finding was clearly erroneous. He simply points to earlier noncompetition agreements with fewer restrictions as evidence that CVS deliberately overreached in drafting the agreement at issue here. The bare fact of a broader agreement does not on its own prove overreaching.

- 22 - a floral distributor, had signed a covenant "not to compete with

Carbone for one year within 100 miles of Hartford, Connecticut."

582 F. Supp. 2d at 222

. When Regan left Carbone, he went to work

for another floral distributor and sold flowers to at least two of

his previous customers from Carbone.

Id. at 222-23

. Carbone sued

to enforce the noncompetition agreement.

Id. at 223

. Applying

Rhode Island law, the district court concluded that, although the

agreement was reasonable in its restriction on the kinds of

activities Regan could perform and the time period for which the

restriction would apply, the geographic scope was overly broad --

the 100 mile radius unnecessarily included "potential customers to

whom Regan never sold, and prior customers to whom he has not

recently sold."

Id. at 226

Accordingly, the court used the doctrine of partial

enforcement to reduce the unreasonable geographic limit.

Id. at 226-27

. It issued an injunction tailored to prevent Regan from

soliciting current Carbone customers with whom he had worked in

his assigned sales territory, rather than with a general geographic

limitation.

Stated more generally, the court refused to

enforce the full scope of the agreement, as Carbone sought, and

instead partially enforced it, delivering only some of the relief

to Carbone that it requested by actually modifying the terms of

the agreement.

- 23 - The case before us does not fit this model and, thus,

the applicability of the partial enforcement doctrine is less

straightforward. Unlike in Carbone, we are not "modifying" or

narrowing a term of the Agreement so that it can be enforced

reasonably. Nor are we delivering only part of the relief CVS

seeks. Rather, we are using the partial enforcement doctrine to

conclude that any potentially unreasonable aspects of the

Agreement do not prevent CVS from winning the full relief it seeks

based on the narrowest aspects of the Agreement as written.8

Strikingly, when used in this way, the partial enforcement doctrine

mirrors an as-applied approach.9

8 For instance, even if we were to hold that the full definition of "Competitor" is unreasonable, the partial enforcement doctrine would allow us to strike the offending aspects of the definition and retain those that are reasonable. The remainder of a modified definition would include PillPack, given its direct competition with the division of CVS in which Lavin worked. 9 Judge Selya criticizes the as-applied approach because he thinks its similarity in this case to the partial enforcement analysis suggests that the two are mutually exclusive. In his view, this means that the as-applied approach cannot be correct because that approach would render superfluous the doctrine of partial enforcement and irrationally do away with its prerequisites -- a showing that the restrictive provision was not the result of bad faith or deliberate overreaching. Although in a much more circumscribed way, we think there could still be room for the application of the partial enforcement doctrine under the as-applied approach. For example, if the covenant at issue here precluded Lavin from engaging in Competition for ten years, rather than eighteen months, we might conclude that the lengthy temporal restriction makes the Agreement unreasonable, even using the as- applied approach. However, the partial enforcement doctrine would allow us to enforce the Agreement to prevent Lavin from taking his job but for less than the full ten years, as written in the

- 24 - We are confident that using the partial enforcement

doctrine in this way is consistent with the principles articulated

in the Rhode Island cases that employ this doctrine -- that courts

in equity should enforce agreements to the extent reasonable --

such that CVS wins, even if Lavin is correct that reasonableness

must be assessed facially. Nonetheless, because we have found no

cases using the doctrine as we have, we hesitate to conclude that

this is the analytical framework -- rather than a straightforward

as-applied approach -- that a Rhode Island court would employ if

presented with a case of this kind.

We recognize that, as we have undertaken them here, these

two approaches look alike in many respects. However, as we have

suggested, the facial and as-applied approaches can diverge

significantly. Typically, facial review would require an

exhaustive inquiry into the reasonableness of all aspects of an

agreement, even those not directly at issue -- an inquiry we have

omitted here only by assuming unreasonableness. There is another

significant distinction: the partial enforcement doctrine can be

used only after a court confirms that there has been no bad faith

Agreement. That said, we do acknowledge that the as-applied approach would reduce the role of the partial enforcement doctrine and also permit employers to enforce covenants without first showing that a covenant is reasonable as a whole or, at a minimum, not the product of bad faith or overreaching. As we have expressed, these policy concerns, as reflected in decisions of the Rhode Island Supreme Court, are what give us pause about embracing the as-applied approach outright.

- 25 - or deliberate overreaching. Although that consideration does not,

as we explained, change the outcome in this case, it might in

others. Thus, we leave it to the Rhode Island courts to clarify

which doctrinal framework is correct when, like here, a party seeks

relief based on the narrowest aspects of a broad agreement.

IV.

For the reasons described above, we conclude that CVS is

likely to succeed on the merits of its claim for injunctive relief,

whether the trial court uses the as-applied or the facial approach

in evaluating the reasonableness of the restrictive covenant at

issue. Because this is the only factor of the preliminary

injunction framework that Lavin challenges in this interlocutory

appeal, and because the district court concluded that the other

factors counsel in favor of CVS, we affirm the district court's

entry of a preliminary injunction.

So ordered.

-Concurring Opinions Follow-

- 26 - LYNCH, Circuit Judge, concurring. I join only those

portions of Judge Lipez's opinion affirming the district court on

the basis of what that opinion calls the "as applied" analysis.

Rhode Island law requires that result. I do not join and do not

agree with those portions of the opinion purporting to find in

Rhode Island law a "facial analysis" of non-compete agreements and

the opinion's unprecedented use of the partial enforcement

doctrine. If Rhode Island law is to be extended in either of those

two ways, it is up to the Rhode Island courts or legislature to do

so, and not the federal courts. See Doe v. Trs. of Bos. Coll.,

942 F.3d 527, 535

(1st Cir. 2019); Rared Manchester NH, LLC v.

Rite Aid of N.H., Inc.,

693 F.3d 48, 54

(1st Cir. 2012) ("[W]e

ought not 'stretch state precedents to reach new frontiers.'"

(quoting Porter v. Nutter,

913 F.2d 37, 41

(1st Cir. 1990))).

- 27 - SELYA, Circuit Judge (concurring in the judgment). I

agree that the entry of a preliminary injunction enforcing the

covenant not to compete should be affirmed. In view of the

district court's thorough and fully supportable findings of fact,

CVS is likely to succeed in establishing that the covenant is

enforceable. Barring Lavin from assuming his role at PillPack for

the contractually specified eighteen-month period is an

appropriate means of protecting CVS's confidential information. I

part ways with the lead opinion, though, when it declines to choose

between the two analytic frameworks that may potentially undergird

this outcome. See ante at 18, 25-26. In particular, the lead

opinion acknowledges two theoretical approaches for determining

the reasonableness of a covenant. See ante at 13-17. Under what

the lead opinion terms the "facial approach," a court must consider

whether the full scope of the noncompetition bar is reasonable.

By contrast, under what the lead opinion terms the "as-applied

approach," a court must ask only whether it is reasonable to bar

the employee from the specific form of competition in which he

plans to engage. In my judgment, the Rhode Island Supreme Court

would adopt the facial approach. The as-applied approach is

inconsistent with the Rhode Island Supreme Court's description of

the reasonableness test, the concerns about oppressive

restrictions that motivate much of the law in this area, and the

contours of the partial enforcement doctrine.

- 28 - There are at least two persuasive reasons for concluding

that the Rhode Island Supreme Court would adopt the facial approach

(both of which are acknowledged by the lead opinion, see ante at

14-15). First, that court has repeatedly stated that the

reasonableness inquiry concerns the contract or agreement as a

whole. See, e.g., Cranston Print Works Co. v. Pothier,

848 A.2d 213, 219

(R.I. 2004); Durapin, Inc. v. Am. Prods., Inc.,

559 A.2d 1051, 1053

(R.I. 1989); Oakdale Mfg. Co. v. Garst,

28 A. 973, 974

(R.I. 1894). Second, the court's concerns about oppressive

restraints on trade align much more neatly with the facial

approach. Under Rhode Island law, "covenants not to compete are

disfavored and subject to strict judicial scrutiny." Cranston

Print,

; see Durapin,

. This level

of scrutiny protects employees from covenants that unreasonably

limit their ability to seek employment or engage in trade. See

Durapin,

559 A.2d at 1057-58

; Max Garelick, Inc. v. Leonardo,

250 A.2d 354, 357

(R.I. 1969). Such considerations militate against

conducting the reasonableness analysis in a manner that ignores

the full scope of the terms of a covenant (as the as-applied

approach would require us to do).

In all events, the facial approach coheres more

logically with the doctrine of partial enforcement than does the

as-applied approach. Under the partial enforcement doctrine, a

Rhode Island court may narrow the scope of an unreasonable covenant

- 29 - and enforce it to whatever extent is reasonably necessary to

protect the employer's legitimate interests. See Durapin,

. This analysis stands separate and apart from the

facial approach, which examines the reasonableness of a covenant

according to the full scope of its terms. It is only if the court

finds those terms unreasonable that the partial enforcement

doctrine comes into play and permits the court to determine what

restrictions on competition are reasonable under the

circumstances. See

id.

The lead opinion's attempt to reconcile

the partial enforcement doctrine with the as-applied approach is

like trying to insert a square peg into a round hole.

To be sure, in a case like the one before us — in which

a former employee has defected to a direct competitor — the partial

enforcement doctrine and the as-applied approach reduce to exactly

the same question: does the reasonable scope of the covenant

encompass the employee's new position? To me, this redundancy

plainly indicates that the threshold reasonableness inquiry must

involve a broader question about the full scope of the covenant as

written and counsels in favor of deploying the facial approach.

To cinch the matter, there is an obvious lack of synergy

between the as-applied approach to reasonableness and the

exceptions to partial enforcement for bad faith and deliberate

overreaching recognized by the Rhode Island Supreme Court.

Although a Rhode Island court may not partially enforce an

- 30 - unreasonable covenant upon a finding of bad faith or deliberate

overreaching on the employer's part, see

id.,

such a finding does

not render a reasonable covenant unenforceable. Seen in this

light, the as-applied approach effectively shifts the partial

enforcement analysis into the threshold reasonableness inquiry

while simultaneously eliminating an inquiring court's ability to

consider an employer's bad faith or deliberate overreaching. This

shift borders on the irrational; it would severely compromise the

utility of these exceptions as a means of discouraging employers

from deliberately foisting unreasonable and oppressive covenants

on their employees.10 See Ferrofluidics Corp. v. Advanced Vacuum

Components, Inc.,

968 F.2d 1463, 1470-71

(1st Cir. 1992). I simply

do not believe that the Rhode Island Supreme Court would

countenance such an odd dynamic.

There is more. The harmful effects of oppressive

restrictions on competition — which discourage employees from

seeking other employment opportunities due to the threat of

litigation, see

id.

at 1471 — cannot plausibly be said to depend

10 Although the Rhode Island Supreme Court has never expressed this rationale for the exceptions to partial enforcement in so many words, its formulation of the doctrine derives from the Tennessee Supreme Court's decision in Central Adjustment Bureau, Inc. v. Ingram,

678 S.W.2d 28

(Tenn. 1984). See Durapin,

. In Ingram, the court focused on the risk of employers imposing oppressive restrictions on their employees when explaining why it would not partially enforce a contract that "is deliberately unreasonable and oppressive."

678 S.W.2d at 37

- 31 - on how an employee may happen to violate his covenant. Under the

as-applied approach, though, that happenstance determines whether

a court will find the covenant reasonable and, thus, whether the

employee can point to an overly broad and oppressive covenant as

evidence of bad faith or deliberate overreaching. To this extent,

the as-applied approach unduly restricts courts from using an

employer's bad faith or deliberate overreaching as a tool to

protect employees from oppressive covenants. Once again, I cannot

imagine that the Rhode Island Supreme Court would welcome such a

result.

With respect, I do not find convincing the lead opinion's

suggestion that the as-applied approach might control here. See

ante at 15-17. Although the Rhode Island Supreme Court has

emphasized that the reasonableness inquiry must consider the facts

and circumstances of each case, see, e.g., Durapin,

; Mento v. Lanni,

262 A.2d 839, 841-42

(R.I. 1970), this

emphasis does not support, much less mandate, use of the as-applied

approach. It merely expresses the commonsense notion that the

reasonableness of the restrictions contained in a covenant — such

as temporal or geographic limitations — depends not on any bright-

line rules but on the relationship of the parties and their

particular interests. See, e.g., Oakdale Mfg. Co., 28 A.2d at 974

("[C]ontracts in restraint of trade are not necessarily void by

reason of universality of time, nor of space; but they depend upon

- 32 - the reasonableness of the restrictions under the conditions of

each case." (citations omitted)). The Mento court considered

facts about the parties in just this way, explaining that it was

assessing the reasonableness of the covenant's "unlimited

restriction as to time."

262 A.2d at 842

. Contrary to the lead

opinion's intimation, Mento simply does not suggest that a court

can ignore the full scope of a covenant as written when determining

its reasonableness.

Similarly, the lead opinion's reliance on Professor

Corbin's treatise does not get it very far. The passage that the

lead opinion cites appears in a section of the treatise entitled

"Partial Enforcement of Restrictive Covenants" and,

unsurprisingly, discusses the partial enforcement doctrine, not

the threshold reasonableness inquiry. See ante at 16-17 (citing

15 Corbin on Contracts § 80.26 (2019)). The passage explains that

a court deciding whether to partially enforce an unreasonable

covenant need not always determine the boundaries of what would

constitute a reasonable restriction. See Corbin on Contracts,

supra, § 80.26. Instead, the operative question is "whether a

restriction against what the [employee] has done in fact or is

threatening to do would be a reasonable and valid restriction."

Id. In short, what the lead opinion labels as part of the as-

applied approach to the reasonableness inquiry is no such thing;

- 33 - it is nothing more than a method of conducting a partial

enforcement analysis.

Nor do I find persuasive the lead opinion's suggestion

that the facial approach is unworkable in the time-sensitive

posture typical of lawsuits that seek to enforce covenants not to

compete. Refined to bare essence, the lead opinion's suggestion

rests on the dubious proposition that the facial approach demands

much more extensive discovery than the as-applied approach. And

to the extent that this proposition has any validity, it is

undermined by the fact that preliminary injunctive relief normally

does not require definitive resolution of underlying claims but,

rather, requires only a prediction of whether the party seeking

such relief is likely to succeed on the merits. See Ross-Simons

of Warwick, Inc. v. Baccarat, Inc.,

102 F.3d 12, 16

(1st Cir.

1996).

With my prediction that the Rhode Island Supreme Court

would take a facial approach to the reasonableness inquiry, the

other pieces of the puzzle fall easily into place. The court below

supportably found that Lavin failed to show that CVS engaged in

either bad faith or deliberate overreaching when requiring him to

sign the covenant. See CVS Pharmacy, Inc. v. Lavin,

384 F. Supp. 3d 227

, 237 n.9 (D.R.I. 2019). Accordingly, even if this court

were to find the activity restriction in the covenant overly broad

— a matter on which I take no view — I am confident that the Rhode

- 34 - Island Supreme Court would partially enforce the covenant to the

extent reasonably necessary to protect CVS's confidential

information. Whatever the terms of such a modified covenant would

be, those terms would most assuredly encompass Lavin's new position

at PillPack.

There is one last hill to climb. The lead opinion says

that it is hesitant to take the approach that I have outlined

because no Rhode Island court has used the doctrine of partial

enforcement in precisely this manner. See ante at 22-25. In the

circumstances of this case, I have no such hesitancy: the Rhode

Island Supreme Court has straightforwardly described partial

enforcement as allowing courts to "modify an unreasonable covenant

and enforce it to an extent that it is reasonably necessary to

protect the promisee's legitimate interests." Durapin,