Non-Competes and Office Romances

Over the holiday, the Court of Appeals issued a couple of employment-related decisions regarding situations that often come up.

  1. Non-Compete Agreements/Competition with Former Employer

In Curry’s Transportation Services, Inc. v. Dotson et al., the Court of Appeals addressed the enforceability of a non-compete and competition with a former employee.  Since I want to address two cases in this post, I’m going to give the cliff notes rather than dissect the whole case.

  •  Non-compete agreements are unenforceable if they are unnecessary to protect the business interest.  CTS’s information did not require protection.  Its customers were not confidential.  It priced its service the exact same way all trucking companies price its service—rates were generally standardized across the industry.  Business in the trucking industry is not dependent upon personal contacts and relationships or confidential information.  CTS did not require most of its drivers to sign non-competes and/or confidentiality clauses.  All these facts together led the court to find that the non-compete was unenforceable.  Again, it was all the facts that led to the conclusion.  Simply requiring employees to sign a non-compete will not make it enforceable.  There must be a legitimate business interest that needs to be protected.
  • Preparation to form a competing business is generally lawful unless an individualized harm to the former business beyond additional competition results from the preparation. 

       2.   The Office Romance

 In Roche v. Davenport Cleaners et al., the facts circled around a volatile romantic relationship between two co-workers that led to the termination of the female co-worker.  Both employees engaged in derogatory speech towards each other, finally resulting in a physical altercation initiated by the female co-worker.  After termination, the female co-worker filed a sexual harassment and retaliation suit against the employer.  The employer was found not liable because the court determined that the female co-worker engaged in the name-calling and harassment and that the conduct was based on the relationship between the parties, not because the plaintiff was a female.  Let’s see what steps can be taken to prevent this expensive lawsuit.

  •  Determine if you will prohibit or limit romantic relationships between co-workers.  Will you prohibit all romantic relationships?  Will you transfer those involved in romantic relationships to different departments?  Once you’ve determined if a policy is necessary, put it in writing, distribute it to your employees and train your employees.
  • Respond appropriately to harassment/misconduct in the workplace.  Davenport Cleaners knew what was happening in the workplace.  It was aware of the name-calling between the two individuals.  From the facts presented in this case, it appears that Davenport Cleaners did little to prevent/rectify the situation.  When complaints are made (even if the employee does not “want to get the harasser in trouble”) take action.  Investigate and discipline when necessary and as appropriate.  Don’t let the problems get out of hand.

Happy New Year!

Cyclist Obtains Settlement Despite Tort Immunity

The Cedar Rapids Gazette reported on a legal settlement reached between Bridgid Ruden, the City of Coralville, the State of Iowa, and Horsfield Construciton Company.  Ms. Ruden had been riding her bicycle on a trail and lost control of her bike and crashed after hitting a patch of mud on the trail.  She was in a coma, had multiple surgeries, and is unable to continue her career as a nurse practitioner.  The basis for Ruden's lawsuit was that the Defendants were negligent in the manner in which the trail was designed, constructed and maintained.  Generally, the State of Iowa (Iowa Code 669.14) and Municipalities (Iowa Code 670.4) are immune from tort liability, unless the negligence falls under certain exceptions.  In this case, Ms. Ruden presented enough evidence to argue that the design of the trail was negligent in that it was not sloped enough to allow for proper drainage.   There are very few cases in Iowa where plaintiffs have successfully argued the design exception. 

NCAA lawsuit and the Motion to Strike

Back in 2009, former UCLA basketball player Ed O'Bannon filed a lawsuit against the NCAA seeking a portion of the royalties enjoyed by the NCAA for rebroadcasting old games and using other archival footage.  As the lawsuit wore on, additional former NCAA athletes joined O'Bannon as plaintiffs, and recently, they sought to add a new claim to the lawsuit, seeking a portion of the current and future royalties enjoyed by the NCAA for broadcasting live games, not just rebroadcasts. In response, the NCAA filed a motion to strike the new claim.  A motion to strike is a procedural tool used to remove improper or unnecessary matter in a pleading, and it is filed by the adverse party.  In this case, the judge overruled the motion to strike, and the NCAA plaintiffs can proceed with their additional claim for more damages.  The additional claim, incidentally, increases these potential damages from millions to billions.

Good Fences Make Good Lawsuits

During Jan Mickelson's (@amtalker) radio show this morning on 1040 WHO, I heard part of a story about two neighbors who had a dispute about a fence.  The discussion involved Iowa Code Section 359A, which is a very old statute.  Essentially, the statute sets forth the procedure under which a person can force his adjoining land neighbor to help pay for the costs of a fence between the two properties.

There are several policies furthered by this statute.  The centuries-old proverb that "good fences make good neighbors" is an obvious reason, but for agricultural states it also helps clarify farmland boundaries and contain livestock. 

This is where clarification is important:  although the radio guest noted that this statute is intended for agricultural purposes, the statute technically does not have that limitation.  The Iowa Supreme Court has held that:

"Chapter 359A applies equally to all adjoining landowners without regard to the use of the land. Our decision rested on the fundamental belief that, in the long run, shared responsibility for partition fences minimizes conflict among neighbors. The fencing statute does not merely benefit livestock owners.  It serves the broader public good by mediating boundary, fence and trespass disputes."  Gravert v. Nebergall, 539 N.W.2d 184, 188 (Iowa 1995).
 

So for the city-folk reading this note, you have the access to this statute as well.

A lawsuit about a hot dog

Trial began yesterday in a case in Kansas City.  Here, the Plaintiff John Croomer attended a baseball game of the Defendant Kansas City Royals on September 8, 2009.  The Royals mascot, Sluggerrr, was throwing free hot dogs into the stands, and Croomer alleged that one of these frankfurters was negligently thrown and hit him in the eye, resulting in a detached retina requiring multiple surgeries.  For a great  synopsis of the case, read Mark Morris' piece in the Kansas City Star.  It remains to be seen whether Croomer will relish in victory.

Injunctive Relief for the NFC North title?

 

On my way into work this morning, I caught a radio segment from ESPN's Mike and Mike in the Morning radio show on 1700 The Champ.  The discussion was regarding the NFL's decision to suspend six players for violating the league's policy on anabolic steroids and related substances.  The players are each suspended for the rest of the regular season.  This news is difficult for some fans in our office, including yours truly, since two of these players are defensive tackles Kevin and Pat Williams of the Minnesota Vikings.  The fact that the Vikings just took the lead in their division (NFC North) makes the news even more difficult to bear. 

 

However difficult the ruling is for a fan, there are some interesting legal issues to come out of the story:

1) The Williamses plan to file suits in U.S. District Court for injunctive relief, which if granted, would allow them to play through the season and address the issue after the season.  Generally, to prevail on a temporary injunction, a petitioner must show: 1) that he or she is likely to succeed on the merits of the case, and 2) that there is no other adequate remedy at law.  Whether the Williamses will be able to meet this burden is not clear, but a grant of injunctive relief is rather difficult to obtain.

2) Another remedy for the Williamses includes suing the manufacturer of the weight-loss pills for failure to include on its label the ingredient bumetanide, which is banned by the NFL.  To prevail in this lawsuit, a plaintiff would likely need to show that the manufacturer was negligent in its failure to warn consumers about the included ingredients.  The case would revolve around whether the Williams' harm was foreseeable, and whether inclusion of the ingredents would have been a reasonable method to warn the consumer.  However, this lawsuit would not help the Vikings win the NFC North and make the playoffs.

 

Check back for updates on the fate of the Williamses and the Vikings.

photo on flickr by  funnystrange or funny ha ha