ILNews

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. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. 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

  5. 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

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