Wachovia Insurance Services, Inc. v. McGuirt, 2007 NCBC 3 (N.C. Super. Ct. Feb. 13, 2007)(Diaz)

Plaintiff's former employee was subject to restrictive covenants in an Amended Employment Agreement. He was also subject, however, to what he claimed were conflicting restrictions in a subsequently executed Stock Purchase Agreement. The former employee asserted that the claims under the Amended Employment Agreement should be dismissed.

The Court denied the Motion and struck the employee's defense on this basis. It held that the restrictive covenants, although not consistent, could be enforced concurrently, and that there was not a novation or a substitution of the contract. Nor did the merger clause in the subsequent agreement eliminate the restrictions in the earlier agreement.

The Court also addressed plaintiff's motion to disqualify defendant's counsel, who had represented him in connection with the Stock Purchase Agreement. It denied the Motion, holding that plaintiff had to meet a high standard of proof to obtain disqualification. The issue was whether the prior representation was "substantially related" to the matter before the Court. The Court found that it was not, since plaintiff's claims were lodged under the Amended Employment Agreement, not the Stock Purchase Agreement. The standard for whether a matter is substantially related to another is that there must be a "virtual congruence of issues."

Also, there was no risk that the law firm had obtained confidential information in its prior representation, which had occurred five years earlier, which would have materially advanced its new client's interest in the litigation. The Court contrasted cases in which there was a high risk of the lawyer having access to such information.

Full Opinion

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