When Are Employee Files Relevant In Non-Compete Litigation?

During the course of non-compete litigation, a party may seek to obtain the employment files of the adverse party. The situation typically arises when an employer seeks to enforce a non-compete agreement against a former employee and the employee, in an effort to build his or her defense, serves a request for production on the employer seeking certain employee files. This issue was addressed by the United States District Court for the Middle District of Florida in Moore v. Lender Processing Service, Inc., et al., C.A. No. 3:12-cv-205-J-UATCMCR (M.D. Fla. June 5, 2013). The plaintiff in Moore was a former employee who brought a breach of contract and declaratory judgment action against her former employer following her termination. The employment agreement at the center of the dispute contained a non-compete clause which the employee argued was invalid due to the employer's breach of the agreement. Opinion at *1.

As part of its defense to the non-compete action, the employer argued that the employee was terminated for cause "due to a persistent failure to perform duties consistent with a commercially reasonable standard of care and also due to willful neglect of her duties." Opinion at *1. During the course of discovery, the former employee sought the production of nine employees' personnel files. The employee argued that seven of the nine files were relevant to show the pretextual nature of the employer's decision to terminate the employee. Id. at *2. By that, the employee believed production of the employee files would show that these seven employees engaged in the same conduct that she engaged in, however, they were not terminated but instead remained with the company. According to the employee, her performance was merely a pretext and not the real reason for her termination. Id.

The employer in Moore opposed production of the seven employee files, arguing that the information contained in the files was confidential and not relevant to the litigation. Id. According to the employer, how it treated other employees (whether by firing them or not for similar conduct) had no relevance on the issue of whether the employer breached the employment agreement. Id.

The court began its analysis by citing to Federal Rule of Civil Procedure 26(b)(1) which provides that "[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense ..." The court noted that it should construe relevancy "broadly to...