The North Carolina Business Court’s recent decision in Box Company of America, LLC v. Bostick, 2025 NCBC 75, reinforces two rules: (1) noncompetes must be narrowly drafted, or they won’t be enforced, and (2) plaintiffs seeking to protect their trade secrets in court must allege internal efforts to protect those secrets and must allege actual misappropriation.
The Alleged Facts
In 2022, Box Company of America (“Box”) acquired CorTek, Inc., inheriting both its business and a noncompetition agreement with salesperson William Bostick. After the acquisition, Bostick continued as Box’s key sales employee, gaining access to confidential information and customer relationships. Then, a year later, Bostick resigned and joined a competitor, Opus Packaging Group.
Box and Opus attempted to negotiate Bostick’s noncompete, but when Opus and Bostick failed to sign a letter acknowledging Box’s interest in maintaining the confidentiality of its trade secrets and Opus products showed up at a Box customer’s offices, Box sued Bostick. Box’s lawsuit included breach of contract, trade secret misappropriation, and unfair and deceptive trade practices.
Noncompete Agreements Cannot Be Detached from an Employee’s Former Role
The court’s most consequential holding concerns the noncompetition agreement. Box sought to enforce a noncompete barring Bostick from “owning any interest in, managing, being employed by, or operating” any business in the packaging industry within a 300-mile radius for two years.
To the Business Court, this language was impermissibly broad because it effectively barred any employment within the industry, even if the new employment were wholly unrelated to the old employment. Restrictions on “an employee’s ability to own an interest in any business of a certain industry” are unenforceable because they separate the scope of the noncompete from the role of the former employee. When presented with a noncompete, the Courts want to see that the employer is protecting a real business interest. The Box noncompete, the Court reasoned, could be violated by merely owning a mutual fund invested in a business that operates in the industry.
Note, however, that North Carolina courts apply a more deferential standard when the restricted party is a former owner rather than a mere former employee. Therefore, noncompetes for former owners are less likely to be deemed overbroad.
Here, Box argued that parol evidence would show that the parties understood the restrictions to be narrower than what was written in the contract and that a “blue pencil” reading of the noncompete would yield an enforceable agreement. The Court rejected both arguments. First, under North Carolina law, parol evidence is inadmissible where a contract is not inherently ambiguous. Bostick’s agreement was not. As for Box’s blue pencil argument, the Court explained that the Court is not empowered to simply rewrite an otherwise unenforceable agreement in an enforceable manner.
Trade Secret Claims Cannot Proceed on “Conclusory” Allegations
Box also made a claim for misappropriation of trade secrets under North Carolina’s Trade Secrets Protection Act (the “TSPA”). The TSPA protects the owners of “trade secrets” from “misappropriation” of those secrets. According to N.C. Gen. Stat. § 66‑152(3) a trade secret is “business or technical information” from which the owner “derives independent actual or potential commercial value” from and that is the “subject of efforts” to maintain its secrecy. A trade secret is misappropriated when it is acquired, disclosed, or used by someone other than the owner without authority or consent.
In this case, the Business Court rejected Box’s trade secret claim. Specifically, the court found Box’s allegations “conclusory,” lacking detail about what reasonable measures were taken to protect its information and how Bostick allegedly misappropriated the secret.
The decision reinforces the principle that plaintiffs must plead specific facts showing both (1) their efforts to protect their trade secrets and (2) the acts of misappropriation. As to the latter point, mere suspicion or circumstantial evidence—such as a competitor’s product appearing at a former customer’s site—is not enough.
Conclusion
For businesses and their counsel, the Box Co. decision is a reminder that the court will not hesitate to dismiss claims that do not meet the State’s pleading standards.
