CNC/Access, Inc. v. Scruggs, 2006 NCBC 20 (N.C. Super. Ct. Nov. 15, 2006)(Tennille)

Plaintiff sued a departed employee, alleging that she had violated her confidentiality agreement and her non-competition agreement. The Court found defendant's new employer had not tortiously interfered with her contract. It found the provision on which plaintiff relied, restricting its employees from providing services to any of its clients for 180 days following the termination of employment, to be invalid, because it attempted to restrict defendant from providing services to any client of her former employer, even those with whom she had no contact during her employment.

The Court found the non-compete to be invalid for other reasons as well. It found the three-year restriction on employment to be overly long. It found the geographic restriction -- which extended to the entire state of North Carolina -- to be overly broad, as defendant had only worked in four counties. It also found the covenant, which purported to prevent the defendant from competing "directly or indirectly, individually or as an employee, partner, officer, director or stockholder or in any other capacity whatsoever of any person, firm, partnership or corporation" to be unnecessarily restrictive.

Also, given that individual defendant was in the business of providing medical care to patients, the Court found that there were policy issues counselling against the enforcement of the covenant.

The Court did allow the plaintiff to proceed on a claim for unfair and deceptive practices against defendant's new employer. It found that defendant had copied some of plaintiff's human resources documents without its knowledge or consent. It held that even though defendant had not obtained a competitive advantage as a result, the misuse was an unfair and deceptive practice.

The defendants had counterclaimed. On their claim for defamation, the Court found that plaintiffs were not entitled to an absolute privilege simply because some of the allegedly defamatory statements had been made to governmental agencies. The Court found that the absolute privilege applied only to agencies exercising a judicial or quasi-judicial function. Although plaintiff might have been entitled to a qualified privilege, the Court found that there was an issue of fact whether the statements had been made with actual malice.

The Court also found there to be questions of fact with regard to defendants' counterclaim for tortious interference with prospective economic advantage.

Full Opinion

Brief in Support of Plaintiff's Motion for Summary Judgment

Brief in Opposition to Plaintiff's Motion for Summary Judgment

Reply Brief in Support of Plaintiff's Motion for Summary Judgment

Brief in Support of Defendant's Motion for Summary Judgment

Brief in Opposition to Defendant's Motion for Summary Judgment

Reply Brief in Support of Defendant's Motion for Summary Judgment

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