CVS Pharmacy, Inc. v. Lavin

Boston, MA - Employment lawyer represented defendant with Restrictive Covenant Agreement case.

CVS operates CVS Caremark, one of the country's largest

pharmacy benefit managers ("PBMs"). PBMs sell prescriptionmanagement services to entities providing prescription-drug

coverage to their members. These entities -- known as payers --

include employers, insurance companies, and unions. PBMs

negotiate on behalf of payers with pharmacies to secure

reimbursement rates for prescription drugs. They also establish

pharmacy networks for payers, premised on each payer's individual

needs and preferences; furnish an array of administrative services

(such as claims adjudication and eligibility determinations); and

procure bulk discounts and rebates directly from pharmaceutical

manufacturers. For its part, CVS Caremark offers its own mailorder pharmacy services to certain payers as clients.

CVS operates other healthcare-related subsidiaries in

addition to CVS Caremark, including a sprawling chain of retail

pharmacies. CVS has erected a firewall between CVS Caremark and

its retail pharmacy subsidiary. This firewall not only prevents

1 "[W]e credit the undisputed facts presented below and adopt

the district court's findings as to controverted matters to the

extent they are supported by the record and not clearly erroneous."

United Elec., Radio & Mach. Workers of Am. v. 163 Pleasant St.

Corp., 960 F.2d 1080, 1083 (1st Cir. 1992).

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CVS Caremark's employees from accessing the prices that CVS's

retail pharmacies negotiate with other PBMs but also prevents

employees of CVS's retail pharmacies from accessing the prices

that CVS Caremark negotiates with other retail pharmacies.

2. Lavin's Employment at CVS

After his almost three decades at CVS Caremark and its

predecessor, Lavin became Senior Vice President for Provider

Network Services in 2010. In this role, he oversaw a team of

approximately 250 people and was responsible for negotiating

pricing contracts with retail pharmacies, auditing pharmacies, and

setting up pharmacy networks for payers. He also participated in

regular underwriting calls for the contracts that CVS Caremark

negotiated with its payer clients. In light of these duties, he

became intimately familiar with the prices and terms of CVS

Caremark's deals with both retail pharmacies and payers.

Lavin was also involved in certain strategic initiatives

undertaken by CVS Caremark. For instance, he assisted with the

company's strategy for contracting with mail-in retail pharmacies

("MIRs"), which fill prescriptions by mail. This project included

developing strategies about how best to differentiate CVS

Caremark's mail-based services from those offered by MIRs. He

helped formulate CVS Caremark's strategy for the upcoming

contracting cycle and create novel pharmacy reimbursement and

pricing models. Each year, he attended several executive committee

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meetings that covered an array of topics ranging from revenue and

pricing to major client accounts and regulatory impacts.

3. Noncompetition Agreement

At four points during his tenure as a senior vice

president at CVS Caremark -- in 2011, 2012, 2014, and 2017 -- CVS

required Lavin to sign an RCA. Each RCA contained noncompetition,

nonsolicitation, and nondisclosure covenants. Each time Lavin

signed an RCA, he was awarded CVS stock.

The 2017 RCA, executed in exchange for a stock award

worth $157,500, is the centerpiece of this appeal. The covenant

not to compete contained therein bars Lavin, for eighteen months

after the termination of his employment, from "directly or

indirectly . . . engag[ing] in Competition" anywhere in the United

States that CVS operates. The covenant in the 2017 RCA defines

"Competition" as:

[P]roviding services to a Competitor of the

Corporation [CVS] . . . that: (i) are the

same or similar in function or purpose to the

services I [Lavin] provided to the Corporation

at any time during the last two years of my

employment by the Corporation; or (ii) will

likely result in the disclosure of

Confidential Information to a Competitor or

the use of Confidential Information on behalf

of a Competitor.

"Competitor" is defined, in turn, as:

[A]ny person, corporation or other entity that

competes with one or more of the business

offerings of the Corporation[.] . . . [T]he

Corporation's business offerings include:

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(i) pharmacy benefits management ("PBM")

. . .; (ii) retail, which includes the sale of

prescription drugs, over-the-counter

medications, [and other products and services

sold by CVS's retail pharmacies] ("Retail");

(iii) retail health clinics ("MinuteClinic");

(iv) the provision of [various products and

services] to long-term care facilities, other

healthcare service providers and recipients of

services from such facilities ("Long-Term

Care"); (v) the provision of prescription

infusion drugs and related services

("Infusion"); and (vi) any other business in

which [the] Corporation is engaged or

imminently will be engaged.

. . . .

The Parties acknowledge that . . . an entity

will be considered a Competitor if it provides

products or services competitive with the

products and services provided by the

Corporation within the last two years of my

employment.

I agree to this enterprise-wide

definition of non-competition which may

prevent me from providing services to any of

the Corporation's PBM, Retail, MinuteClinic,

Long-Term Care and Infusion Competitors or any

combination thereof . . . .

This definition of "Competition" and the eighteen-month

noncompetition period appear in all four of the RCAs that Lavin

signed. However, the definition of "Competitor" expanded over

time. The 2011 and 2012 RCAs limited "Competitors" to other

companies providing PBM services. The 2014 RCA expanded this

definition to include retail pharmacies and health clinics, as

well as any other entity that "provides products or services

competitive with the products and services provided by the

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Corporation within the last two years" of Lavin's employment. By

2017, as stated above, the definition of "Competitor" included

companies providing services to long-term care facilities and

prescription infusion drugs.

4. Lavin's New Job at PillPack

In November of 2018, Lavin began discussions with

PillPack about possible employment. PillPack is an online retail

pharmacy founded in 2013 and wholly owned by Amazon.com, Inc.

PillPack aspires to create a new model of providing prescription

drugs to patients. Previously, Lavin led CVS Caremark's

development of a strategy for determining whether and under what

terms to contract with PillPack, which is now enrolled in CVS

Caremark's pharmacy network. Neither PillPack nor Amazon.com

operates a traditional PBM business.

Lavin accepted employment at PillPack on March 29, 2019

and gave CVS his two-week notice on April 8, 2019. In his new

position, he will be responsible for negotiating with PBMs and

payers.2 Moreover, PillPack's chief executive officer ("CEO")

stated that he expects Lavin to "contribute significantly to

2 During some stages of the litigation, Lavin asserted that

his new job will require him to negotiate only with PBMs. The

district court found this assertion too modest and determined that

Lavin's responsibilities also will include negotiating with

payers. See CVS Pharmacy, Inc. v. Lavin, 384 F. Supp. 3d 227,

230, 234 (D.R.I. 2019). Lavin does not challenge this factual

finding on appeal.

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[PillPack's] procurement efforts . . . and help [PillPack] develop

a long term disruptive strategy." CVS Pharmacy, Inc. v. Lavin,

384 F. Supp. 3d 227, 230 (D.R.I. 2019) (alteration in original).

Lavin and PillPack have agreed that he will be recused, at least

for some period of time, from any discussions or work involving

CVS Caremark or its clients. Those projects will be the

responsibility of PillPack's CEO, to whom Lavin will report.

B. Procedural History

After requesting information about Lavin's new

employment, CVS filed a diversity suit against Lavin in the United

States District Court for the District of Rhode Island, seeking to

enforce the covenant not to compete contained in the 2017 RCA.

The district court entered a temporary restraining order barring

Lavin from either working for or disclosing confidential

information to PillPack. After limited discovery, conducted on an

expedited basis, CVS moved for a preliminary injunction.

On June 18, 2019, the district court granted CVS's

motion. See id. at 238. The court concluded that Lavin's proposed

work for PillPack would violate the terms of the covenant not to

compete. See id. at 233-36. Moreover, the court found the

covenant reasonable and, therefore, enforceable under Rhode Island

law. See id. at 236-37. Lavin filed this interlocutory appeal

challenging the entry of the preliminary injunction.

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II.

When assessing whether to grant a preliminary

injunction, a trial court must consider four factors: "the movant's

likelihood of success on the merits"; "whether and to what extent

the movant will suffer irreparable harm" in the absence of

injunctive relief; "the balance of [relative] hardships," that is,

the hardship to the nonmovant if enjoined as opposed to the

hardship to the movant if no injunction issues; and "the effect,

if any, that an injunction [or the lack of one] may have on the

public interest." See Corp. Techs., Inc. v. Harnett, 731 F.3d 6,

9 (1st Cir. 2013).3 In his interlocutory appeal, Lavin has made

no arguments concerning the second, third, and fourth factors,

which the district court concluded supported the entry of a

preliminary injunction. See CVS Pharmacy, 384 F. Supp. 3d at 237-

38. Thus, we focus only on the first: CVS's likelihood of success

on the merits. This factor weighs most heavily in the preliminary

injunction analysis. See Ross-Simons of Warwick, Inc. v. Baccarat,

Inc., 102 F.3d 12, 16 (1st Cir. 1996).

When reviewing a district court's entry of a preliminary

injunction, we examine legal questions de novo, findings of fact

for clear error, and the balancing of the four factors for abuse

3 Because "the parties have not suggested that state law

supplies meaningfully different criteria," we will use the federal

preliminary injunction standard in this diversity case. See Lanier

Prof'l Servs., Inc. v. Ricci, 192 F.3d 1, 3 (1st Cir. 1999).

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of discretion. See Corp. Techs., 731 F.3d at 10. Although review

for abuse of discretion demands a degree of deference to the

district court, we have found district courts to have abused their

discretion by making "a material error of law," see id.,

"ignor[ing] pertinent elements deserving significant weight,

consider[ing] improper criteria, or, though assessing all

appropriate and no inappropriate factors, plainly err[ing] in

balancing them," Ross-Simons, 102 F.3d at 16.

III.

A. Enforceability of Covenants Not to Compete

Under Rhode Island law,4 a party seeking to enforce a

covenant not to compete must first establish three threshold

requirements: (1) the covenant "is ancillary to an otherwise valid

transaction or relationship, such as an employment contract"; (2)

the covenant "is supported by adequate consideration"; and (3) the

covenant is designed to protect a "legitimate interest" of the

employer. Durapin, Inc. v. Am. Prods., Inc., 559 A.2d 1051, 1053

(R.I. 1989). The district court concluded that these threshold

4 To evaluate the likelihood of success on the merits in a

diversity case, we look to state law for the substantive rules of

decision. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938);

Crellin Techs., Inc. v. Equipmentlease Corp., 18 F.3d 1, 4 (1st

Cir. 1994). When the parties have agreed about what law applies,

a federal court sitting in diversity need not engage in an

independent choice-of-law analysis. See Borden v. Paul Revere

Life Ins. Co., 935 F.2d 370, 375 (1st Cir. 1991). Thus, we will

apply Rhode Island law, per the parties' agreement in the 2017 RCA

and in the district court.

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requirements were met, including that the covenant was designed to

protect CVS's legitimate interest in securing its confidential

information. CVS Pharmacy, 384 F. Supp. 3d at 236-37. Lavin does

not challenge this determination on appeal.

Rather, Lavin focuses his argument on the reasonableness

of the 2017 covenant. In Rhode Island, "covenants not to compete

are disfavored and subject to strict judicial scrutiny." Cranston

Print Works Co. v. Pothier, 848 A.2d 213, 219 (R.I. 2004).

Accordingly, such covenants "will be enforced as written only if

the contract is reasonable and does not extend beyond what is

apparently necessary for the protection of those in whose favor it

runs." Durapin, 559 A.2d at 1053. 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, 559 A.2d at

1053. 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

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"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:

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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, 559 A.2d at

1053 (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, 848

A.2d at 219; 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).

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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, 848 A.2d at 219 (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, 848 A.2d at 219 (noting that the party seeking enforcement

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

Durapin, 559 A.2d at 1053 (stating that assessing the

reasonableness of a covenant depends on "the particular

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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. Id. 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

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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.

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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"

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for guidance. Id. 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." Id. 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

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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

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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. Id. 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).

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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." Id. 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, 559 A.2d at 1058. The

district court concluded that this case did not involve deliberate

overreaching. CVS Pharmacy, 384 F. Supp. 3d at 237 n.9.7

7 Lavin disputes this finding on appeal. But he has not

identified any evidence that persuades us that the district court's

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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.,

582 F. Supp. 2d at 225-26. 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.

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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. Id. 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.

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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 asapplied 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

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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.

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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.

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.