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Summary judgment improper in non-compete clause appeal

Dave Stafford
September 30, 2013
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A trial court erred in granting summary judgment in favor of a former employer that sought to exercise a non-compete clause in the contract of an airline mechanic who went to work for another company.

The Indiana Court of Appeals reversed summary judgment in favor of the company and reinstated the worker’s claim of tortious interference with a contract in Joseph M. Guinn v. Applied Composites Engineering, Inc., 49A02-1303-CC-239.

Applied Composites Engineering demanded that Guinn be terminated after he was hired to work by AAR Aircraft Services. His contract with ACE had contained a “non-competition covenant” that said he could not work for any company “in the same of substantially similar business” as ACE for six months. AAR ultimately fired Guinn after ACE forwarded the non-compete language to AAR and threatened litigation.

“We conclude that the designated evidence presented by the parties demonstrates that a genuine issue of material fact exists with respect to whether or not ACE’s conduct in connection with Guinn’s employment relationship with AAR was justified or fair and reasonable under the circumstances,” Judge Elaine Brown wrote for the panel. “Accordingly, we cannot conclude that ACE is entitled to summary judgment as a matter of law on Guinn’s claim for tortious interference.”

The panel that also included judges Paul Mathias and Edward Najam noted that “ACE and Guinn were not on equal footing in terms of sophistication or the ability to protect their interests,” and that Guinn wasn’t asked to sign the contract until about 10 months after he started working for the company. Guinn testified he was told the agreement was a formality and “didn’t necessarily apply” to mechanics but had to be on file.

Judges used the 33-page opinion to cite more than six decades of caselaw taking an unfavorable view of non-compete clauses. Brown reached back to Donahue v. Permacel Tape Corp., 234 Ind. 398, 411, 127 N.E.2d 235, 241 (1955), “noting that an employer ‘has no right to unnecessarily interfere with the employee’s following any trade or calling for which he is fitted and from which he may earn his livelihood and he cannot preclude him from exercising the skill and general knowledge he has acquired or increased through experience or even instructions while in the employment.’”

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  1. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  2. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  3. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  4. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

  5. Seventh Circuit Court Judge Diane Wood has stated in “The Rule of Law in Times of Stress” (2003), “that neither laws nor the procedures used to create or implement them should be secret; and . . . the laws must not be arbitrary.” According to the American Bar Association, Wood’s quote drives home this point: The rule of law also requires that people can expect predictable results from the legal system; this is what Judge Wood implies when she says that “the laws must not be arbitrary.” Predictable results mean that people who act in the same way can expect the law to treat them in the same way. If similar actions do not produce similar legal outcomes, people cannot use the law to guide their actions, and a “rule of law” does not exist.

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