There is a new Fourth Circuit Court of Appeals case, in which the Court held a non-compete was unenforceable: Lapman v. DeWolf Boberg & Associates, Inc., 2009 WL 757368 (4th Cir. 2009). In Lapman, the plaintiff, a former employee and shareholder, had been terminated and had went to work for Synergetics, a direct competitor of his former employer. Defendant brought a counterclaim to enforce the non-compete. Applying South Carolina law, the District Court granted summary judgment in favoring for defendant-employer, finding the non-compete to be enforceable because it “only prohibited [Lapman] from working for a direct competitor in positions similar to the ones he held at DBA.” Id. at *3.
On appeal, the Fourth Circuit began by noting that the non-compete explicitly stated that the plaintiff “will not, directly or indirectly, engage in Competition with [DBA]….” Id. at *6 (emphasis in original). However, the Fourth Circuit unanimously disagreed with the District Court and reversed: Continue reading
E-discovery is the new trend in litigation; it is here to stay. Every lawsuit involves discovery, where lawyers get to ask questions and obtain documents that are relevant or might be relevant to the claims in the case. Now, because many documents exist in electronic form on computer hard drives, electronic files are also subjects for discovery. Parties are required to conduct searches of their computers for information, and in some cases, a party may be required to produce their hard drive so the opposing party can conduct its own search. And these searches can turn up deleted information. Continue reading
I recently wrote a letter on behalf of a nice lady who had a noncompete, which was on the verge of costing her a good job offer. However, the prospective employer was temporarily holding the job open to see if she could get released from her non-compete. Fortunately, we had some strong arguments that the agreement was not enforceable, and sent a well researched letter making our case. Her former employer responded in two weeks that the company was releasing her from those obligations. It can be that simple.
But, it is not always that simple. Sometimes, former employers will continue to insist on enforcement, which requires an employee to institute a declaratory judgment action. Other times, the noncompete has a provision requiring an employee to litigate out of state, so it makes since to file a preemptive lawsuit before writing the letter. Otherwise, the former employer may bring its own action in another state, which can be more time consuming and more expensive. And, if you have filed an action before initiating negotiations, your former employer does not wonder whether you are serious or not. It all depends on the circumstances.
Nonetheless, in a few cases, a well written, well researched letter can be enough. The cost for a consultation and a letter will generally be about $500, although some cases can be a bit more complicated. Of course, the cost of inaction can be much more.