In
Steiner v. American Friends of Lubavitch (Chabad), (DC Ct. App., Feb. 1, 2018), the District of Columbia Court of Appeals found no absolute bar to enforcement of a non-compete clause in a contract of a Chabad rabbi who had been popular with Jewish students at George Washington University. However the court held that the trial court had enforced the clause too broadly. At issue are tensions that have extended for many years between the Chabad organization and Rabbi Yehuda Steiner who had been employed to engage in campus outreach for Chabad. After Steiner was fired, he continued his religious outreach to students. The Chabad organization brought a breach of contract action. The trial court applied the doctrine of equitable reformation to issue an injunction against Steiner, but limited non-competition to two years, to serving currently enrolled students, and to an area within one mile from campus. In this appeal, the court held:
Here, neither the noncompete as originally drafted nor the clause as reformed in the trial court‘s modified preliminary injunction contains terms that would require religious interpretation and therefore preclude a civil court‘s review of this dispute.
However the appellate court held that the trial court's injunction was too broad insofar as it limits activities that Rabbi Steiner and his wife can continue in their personal capacities, rather than through a competing organization. the court added:
More than 100 GW students signed a petition attesting to the special personal relationship they shared with their religious leader, Rabbi Steiner. In such circumstances, the public interest may bear on the level of scrutiny we will apply to a decision to judicially modify a restrictive covenant.....
In this same vein, the profession of religious minister or rabbi is unique in that the tasks performed in an employment context overlap to a large extent with actions such a professional might undertake in his or her free time, without expectation of payment, as a member of the community engaging in religious practice or dialogue. It is thus imperative that an employer wishing to prohibit certain behavior post-termination narrowly tailor with specific language a restrictive covenant....
The court also remanded for clarification of a non-interference provision, and for a determination of whether the non-compete applies to Rabbi Steiner's wife as well.
