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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. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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