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Bill Pentelovitch and Haley Schaffer Author Chapters in Minnesota CLE's Business Torts Deskbook
June 01, 2008

Maslon Attorneys Bill Pentelovitch and Haley Schaffer each authored chapters for the first edition of the Minnesota Business Torts Deskbook, published by Minnesota CLE in March 2008. The text provides a current, practical and accessible summary of the law of business torts in Minnesota and will be updated on an annual basis.

Bill Pentelovitch, a trial lawyer with 34 years of experience, authored the chapter titled "Noncompetition Agreements: The 'Reasonable' Restraint of Trade," which provides a comprehensive review of the law of noncompetition agreements in Minnesota from the late 1800s to the present. Pentelovitch writes:

"Culturally, politically, and economically, America favors and encourages competition. Public policy of the federal and state governments strongly condemns contracts that restrain trade. See, e.g., 15 U.S.C. § 1 (2006); MINN. STAT. § 325D.51 (2007). Despite these strong legislative proscriptions against restraint of trade, the judiciary has created common law exceptions to the ethic that favors open competition

In 1891 Justice Mitchell, writing for the Minnesota Supreme Court, said that "there is no hard and fast rule as to what contracts are void as being in restraint of trade, but each case must be judged according to its own facts and circumstances," and "the question of the reasonableness of the restraint of trade depends upon whether it is such only as to afford a fair protection of the party in whose favor it is made." National Ben. Co. v. Union Hospital Co., 45 Minn. 272, 276, 47 N.W. 806, 807 (1891).

Minnesota courts have often said that agreements in partial restraint of trade "are looked upon with disfavor, cautiously considered, and carefully scrutinized," Bennett v. Storz Broadcasting Co., 270 Minn. 525, 533, 134 N.W.2d 892, 898 (1965). Occasionally a court will hold that public policy considerations disfavoring restrictive covenants will prevent their enforcement. Energy Solutions International v. Tastad, No. C2-99-546, 1999 WL 787629 *4 (Minn. Ct. App. Oct. 5, 1999). Such decisions are rare, however, and in the more than 115 years of jurisprudence since National Ben, Minnesota Appellate Courts have issued more than one hundred reported decisions, and federal courts in Minnesota have issued dozens more, which together create a body of common law that makes it clear that, at least with respect to contracts of employment and contracts for the sale of a business, there is a class of contracts that do restrain trade but do not violate public policy or the law if they are reasonable and protect a legitimate business interest. See, e.g., Minnesota Mining and Manufacturing Company v. Kirkevold, 87 F.R.D. 324, 332 (D. Minn. 1980). That body of common law is the subject of this chapter."

(To purchase Minnesota Business Torts Deskbook, go to minncle.org.)

Pentelovitch has hundreds of jury and bench trials, dozens of appeals in state and federal courts and many arbitrations to his credit. He practices nationally in the area of noncompete, trade secret and unfair competition litigation, and is a leading authority in Minnesota in the area of ownership and governance disputes in corporations and partnerships. His wide-ranging trial practice encompasses virtually every type of dispute in which businesses can become embroiled, with a particular emphasis in the areas of noncompete trade secrets, unfair competition, antitrust, securities, and financial services.

Haley Schaffer, a member of Maslon's Litigation department, authored the chapter titled "Unfair Trade Practices," which addresses claims for false advertising under Minnesota's false advertising statute and under the common law. Schaffer writes:

"False advertising claims are usually brought under the Lanham Act, 11 U.S.C. § 1125(a)(1), and Minnesota's Deceptive Trade Practices Act ("DTPA"), Minnesota Statutes section 325D.44. This chapter therefore focuses on claims for false advertising under each Act. It also briefly addresses claims for false advertising under Minnesota's false advertising statute, Minnesota Statutes section 325F.67, and under the common law.
False advertising claims under Section 43(a)(1)(B) of the Lanham Act include false descriptions of goods or services, false advertising about the geographic origin of a good or service, and false comparative advertising. Comparative advertising occurs when a defendant claims its product is superior to the plaintiff's product. In Rhone-Poulenc Rorder Pharm., Inc., the Eighth Circuit recognized two kinds of such comparative advertising under the Lanham Act: "my product is better than yours," versus "tests prove that my product is better than yours." Rhone-Poulenc Rorder Pharm., Inc. v. Marion Merryl Down, Inc., 93 F.3d 511, 514 (8th Cir. 1996) (emphasis in original)."
(To purchase Minnesota Business Torts Deskbook, go to minncle.org.)

Prior to joining Maslon, Schaffer completed a clerkship for the Honorable David S. Doty of the United States District Court for the District of Minnesota. She is a 2001 graduate from Northwestern University Law School. She graduated cum laude and Order of the Coif and received the Bell, Boyd & Lloyd Appellate Advocacy Award. At Northwestern, Schaffer was an editor of the Northwestern Law Review, in which she published a case note. She graduated cum laude from Princeton University in 1997 with a B.A. in politics.

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