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COA: Break in employment triggered non-compete agreement

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A man who joined a competitor immediately after his employment ended at another company did not violate a non-compete agreement, the Indiana Court of Appeals ruled Thursday. The judges agreed that a 10-day break in employment with the prior employer two years earlier constituted the beginning of his non-compete agreement, and his new job falls outside that two-year non-compete restriction.

Carey Helmuth worked at Nightingale Home Healthcare Inc. as a patient advocate. When he joined the company Jan. 24, 2008, he signed a non-compete agreement barring him from working with a company in a similar field and in a similar position for two years after separation from the company.

In October 2009, Nightingale fired him. But 10 days later, the company offered to revoke the termination and allow him to return to his prior position. He returned to work for Nightingale Oct. 26, 2009, but did not sign a new non-compete agreement. Helmuth’s employment ended with Nightingale March 5, 2012, and he began working with Physiocare Home Healthcare LLC as a patient advocate almost immediately.

Nightingale sued Helmuth and its competitor, arguing he breached the non-compete agreement. The trial court ruled in favor of Helmuth and Physiocare, agreeing with the defendants that the non-compete agreement expired in October of 2011 due to the break in Helmuth’s employment.

“Despite Nightingale’s characterization of Helmuth’s rehire as a revocation and rescission of the previous termination, we find that, based on the evidence, Nightingale’s conduct is more properly defined as a separation from the company which was unconditional and intended to operate as a permanent termination of the employment relationship between Nightingale and Helmuth,” Judge Patricia Riley wrote in Nightingale Home Healthcare, Inc. v. Carey Helmuth and Physiocare Home Healthcare, LLC, 29A04-1403-PL-121.

“Mindful that non-compete agreements are disfavored by law and strictly construed against the employer, we conclude that there is no issue of material fact that Helmuth was indeed separated from Nightingale on October 16, 2009, which marked the starting point of the two-year restrictive period of the Non-Compete Agreement,” she continued. “Absent the execution of a new non-compete agreement on October 26, 2009 or a written extension of the prior Non-Compete Agreement, Helmuth’s restrictive period ended on or about October 16, 2011. Therefore, at the time of entering into an employment relationship with Physiocare in May of 2012, Helmuth was no longer bound by the provisions of the Non-Compete Agreement.”


 

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  1. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  2. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  3. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  4. I totally agree with John Smith.

  5. An idea that would harm the public good which is protected by licensing. Might as well abolish doctor and health care professions licensing too. Ridiculous. Unrealistic. Would open the floodgates of mischief and abuse. Even veteranarians are licensed. How has deregulation served the public good in banking, for example? Enough ideology already!

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