A long-time, high-ranking IBM employee in New York wanted a new job. He joined Hewlett-Packard in a position with more responsibility, but IBM took him to court, arguing that his job with a competitor was barred by the employment contract he had signed. Judges weren’t so sure.

What happened. “Vincent” was with IBM for 26 years, rising to the position of general manager of the company’s Integrated Technology Services by the time he resigned. In that position, he was responsible for the development and sale of related products and services throughout North America. In January 2011, he left to accept a position with Hewlett-Packard as senior VP and general manager, Americas.

On its face, the noncompete he had signed with IBM seemed to preclude his working for Hewlett-Packard for at least a year after leaving his former employer: Hewlett-Packard is a direct IBM competitor. The agreement specified that Vincent would not work for a full year for any IBM competitor in any geographic area for which he had job responsibilities in the last year of his IBM employment. Think North America.

So IBM asked a federal district judge to order both Vincent and Hewlett-Packard to sever their relationship until Vincent’s year was up. But the judge in federal district court who first heard IBM’s case, declined to issue the injunction. He ruled that the noncompete agreement was overbroad. IBM appealed to the 2nd Circuit, which covers Connecticut, New York, and Vermont.

What the court said. Judges reiterated New York’s state law on noncompetes—that they “are enforceable to protect an employer’s legitimate interests so long as they pose no undue hardship on the employee and do not militate against public policy.” And, they noted that one of IBM’s main interests was in protecting its proprietary information and trade secrets from a competitor. But Hewlett-Packard had so carefully constructed Vincent’s job for the first year that it had clearly thoroughly digested the noncompete agreement and bent over backwards to abide by its terms.

His new employer had insulated him from former IBM customers, restricted his work to segments of its business for which he had not been responsible at IBM, and limited him to working with established Hewlett-Packard clients. Judges were satisfied that the agreement was not going to be breached. IBM v. Visentin, U.S. Court of Appeals for the 2nd Circuit, No. 11-902-cv (11/3/11).

Point to remember: One law firm suggested that Hewlett-Packard’s structuring of Vincent’s job could serve as a model for any employer hiring someone who has signed a noncompete agreement with his or her former employer. Attorneys said H-P did it right.