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141970P.pdf 08/06/2015 Stuart C. Irby Company, Inc. v. Brandon Tipton
U.S. Court of Appeals Case No: 14-1970
and No: 14-2682
U.S. District Court for the Eastern District of Arkansas - Little Rock
[PUBLISHED] [Gruender, Author, with Wollman, Circuit Judge, and Gritzner,
District Judge]
Civil case - Contracts. In action involving former employees'
convenants-not-to-compete, the district court erred in granting summary
judgment for defendant Tipton on plaintiff's claim that he breached his
fiduciary duty by recruiting two fellow employees to go to work for
plaintiff's competitor as plaintiff presented sufficient evidence to
create a genuine issue as to whether Tipton's actions constituted
recruitment; the court predicts that the Arkansas Supreme Court would
follow the majority rule that a covenant not to compete can be assigned to
a successor employer; since the covenants could be assigned, plaintiff had
a right to enforce them in the same manner as the predecessor, and the
covenants were enforceable for one year after the employees resigned;
there were a number of issues of material fact as to whether the covenants
were enforceable under Arkansas law, and the district court erred in
concluding they were unenforceable because they were overbroad, did not
protect valid interests and lacked a reasonable geographic limitation;
based on the foregoing, the district court erred in granting defendants
summary judgment on plaintiff's claim they engaged in a civil conspiracy
to violate Tipton's fiduciary duty and on plaintiff's claim for tortious
interference with a contract; defendants' award of attorneys' fees
vacated.