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35
C
ASE: 5
ISSUE BEFORE THE COURT
Whether a signed employment contract that includes a non-compete
clause is enforceable by an employer to protect confidential designs
created by an employee from being sold to a competitor.
THE FACTS
You Be the Judge!
You Be the Judge!
One of the most
common causes of
breach of employment
contract lawsuits is
the difference in
interpretation of the
terms and conditions of
the agreement.
In 2004, the Plainti , Mattel, Inc. (Mattel), the world's largest toy
manufacturer and the owner of Barbie dolls, led a complaint against
its former employee, Carter Bryant (Bryant), the creator of the Bratz
line of dolls and MGA Entertainment, Inc. (MGA Entertainment), the
manufacturer of the Bratz dolls. Bratz toys were rst introduced in
June 2001, and had since become one of the world's premiere toy lines
and girls' lifestyle brands. Bratz dolls have pouty lips and edgy, urban
clothes that have drawn young girls to estimated annual sales of $500
million.
Mattel claimed ownership rights to the Bratz line because it al-
leged that Bratz' creator, Bryant, developed the sketches while work-
ing for Mattel. Mattel asserted claims against the Defendants for:
(1) breach of contract, (2) breach of duty of loyalty, and (3) wrongful
interference with a contract. Mattel sought money damages and a
court order preventing MGA Entertainment from making future
Bratz dolls and related products.
Mattel employed Bryant as a product designer twice from Sep-
tember 1995 through April 1998 and January 1999 through October
2000. Upon starting his second term, Bryant signed an Employee
Con dential Information and Inventions Agreement in which he
agreed not to engage in any employment or business other than with
Mattel or to assist any competing business of Mattel. Bryant assigned
to Mattel all rights, title, and interest in any inventions he conceived
of during his employment. In exchange, he was paid a salary without
any royalties.
Bryant also completed Mattel's Con ict of Interest Questionnaire.
Bryant certi ed that he had not worked for any of Mattel's competi-
tors in the prior 12 months and had not engaged in any business deal-
ings creating a con ict of interest. Bryant agreed to notify Mattel of
For Evaluation Purposes Only