34
C
ASE: 5
BACKGROUND
· Mattel, the creator of Barbie dolls, sued its former employee, Carter Bryant, and his employer,
MGA Entertainment, Inc., manufacturer of Bratz dolls, for breach of an employment contract.
· Carter Bryant signed an employment contract, which included a non-compete clause, with
Mattel. Under this contract, the parties agreed that anything Carter Bryant created while working
for Mattel was the property of Mattel. The contract prohibited Carter Bryant from working for any
of Mattel's competitors during the term of the contract.
· Mattel claimed that Carter Bryant violated the employment contract and his "duty of loyalty"
to Mattel by developing the Bratz doll while still employed by Mattel. Mattel also alleged that
Carter Bryant then conspired with MGA Entertainment, Inc., a competitor, to manufacture and
distribute the Bratz doll.
BEFORE YOU BEGIN
You Be the Judge!
You Be the Judge!
What is an employment contract?
An employment contract is a document that
exchanges promises between an employer
and an employee and describes the terms
and obligations of each party during the
employment.
What is a non-compete clause in an
employment contract?
A non-compete clause, when included in an
employment contract, prohibits an employee
from working with a competitor of the
employer while employed by the employer
and for a period of time after employment.
What is the purpose of a non-compete
clause?
One of the purposes of a non-compete clause
is to protect con dential information of the
employer.
What is an employee's "duty of
loyalty" to his employer?
An employee, as an agent of an employer, has
a "duty of loyalty" to his employer to work in
the best interest of the employer and not for
his own self-interest.
What is a "fair and just" non-compete
clause?
For a non-compete clause to be enforced, it
must be fair and just to the employee and
must not unfairly restrict the employee trying
to pursue his profession. Courts balance the
rights of business owners to protect their
assets and the rights of the employee to earn
a living.
Mattel, Inc. v. MGA Entertainment, Inc.
Employment Contracts and Non-Compete Clauses
For Evaluation Purposes Only