What Happens When A Non-Compete Case Goes to Trial?

I have tried three cases in the last 12 months, but none more difficult than a non-compete case in Lexington County.  The judge did not grant summary judgment on the non-compete or non-solicitation provisions, and my client had conceded he breached the non-compete.  The defendant was permitted to argue he was entitled to $2.7 million in lost profits, which encompassed a 5 year period although the non-compete was 1 year long.  A jury deliberated 5 hours before asking for a calculator, and another couple doing math.  When it was all said and done, the defendant will receive a breach of contract remedy that is 10% of the lost profits sought and one-half of the first settlement offer.  But the motion for attorneys fees’ is still pending.  (Defendant asked for a figure in excess $700,000.).

Well.  This case has a lot of “boots on the ground” experience to dissect.  Couple if quick take aways for now:  

1. It is cliche, but you never know what a jury is going to do.  This verdict appears to be an inconsistent verdict; it may be a compromise verdict; it is likely a confused verdict.  But, do the parties really want to try this one all over again?  Cost-benefit says “no.” However, rationality gets lost in the passion for revenge that can infect these cases.

2. Judges do not wade very deep into non-competes that often.  The appellate law in the state of South Carolina is not as clear as it could be.  The law has evolved slowly over the last 50 years, and sometimes in ways that appear to be inconsistent.  This lends itself to variability and lack of predictability at the trial court level.  

3. There is a fairness standard that seems to underpin much of what drives juries, and in the present political and cultural environment, juries in certain locales and/or in response to certain fact patterns are not as hostile to non-competes as one might guess.  Whoever wins the fairness battle, wins the war.  And, if there is a split decision in the fairness equation, then verdicts tend to reflect that through a compromise verdict.

Conditions 1, 2 and 3 make an appeal likely.

More soon.

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