The Importance of a Well-Drafted Non-Compete Agreement, Part 2

Breeda O’Leary-Brassfield, esq.

A recent Michigan Court of Appeals decision highlights our recent articles on the importance of a well-drafted non-compete agreement for your business. Generally, these agreements not to compete are enforceable when they protect the employer’s reasonable competitive business interests and are reasonable in duration, geographical scope, and line of business.

However, in September 2014, the Court of Appeals struck down a non-compete clause that prohibited the former employee from working for any company that “makes or sells any products competitive with a product offered by the company.”  While this may sound like typical language in a non-compete clause, the Michigan Court of Appeals determined it to be overly broad and unenforceable.

In that case (Huron Technology Corp v Albert Sparling), Defendant was a former employee of Plaintiff who resigned to go work for another company.  Both companies manufactured and sold “material handling equipment” (i.e. conveyor equipment).  Plaintiff argued that Defendant violated his two year non-compete clause by working for a competitor within that time frame.

The court held that the non-compete was unenforceable because it prohibited Defendant from working for any company that offers even a single product that is “competitive” with a product offered by Plaintiff.  This prohibited Defendant from working for any company that is even in remote competition with Plaintiff, and was therefore unreasonably restrictive.

This case demonstrates how imperative it is to carefully draft contract language in non-compete agreements.  The language in this case is similar to what is commonly used by businesses who do not seek the advice of experienced legal counsel. Seeking the advice of experienced counsel will help ensure that the courts will enforce your non-compete agreement.  

If you own a business and are concerned about protecting your interests, contact me, Breeda O’Leary-Brassfield, at 248.380.0000 ext. 3221, boleary@fb-firm.com, or online at www.fb-firm.com.  

Nursing Homes Requiring Families to Sign Arbitration Agreements Before Admittance

Daniel J. Williams, Esq.

Recent news out of Oklahoma shows why having competent legal representation is important if you are looking for a nursing home for a loved one. And, importantly, having such representation before making the choice of which nursing home to go with.

Many of Oklahoma’s 300-plus nursing homes require potential residents to sign arbitration agreements prior to their being admitted to the nursing home. The arbitration agreement means that the family would be bound to arbitration if a disagreement over care arose, which would effectively strip the family’s ability to sue in court. And the damages awarded in arbitration would probably be less than if a civil suit in court were filed.

Arbitration is an alternative form of dispute resolution that takes place outside the courts. While this method has its uses, it can limit the rights of victims of elder abuse.  

Other downsides of arbitration in the case of potential nursing home abuse include: enforcing an award to be paid can be more complicated, the proceedings can be made confidential, which allows the nursing home to potentially cover up their wrongdoings, and there are limited avenues for appealing a bad decision, among other negatives.

If you are considering putting a loved-one in a nursing home, you should contact a knowledgeable elder abuse or elder law attorney to review any agreements the nursing home might have you sign prior to admittance. Planning ahead of time can help prevent possibly tragic situations of elder abuse; and, you can ensure that if anything does go wrong, you will have legal recourse to seek justice and compensation.

Even if the state prohibits such arbitration agreements, as they do in Oklahoma, nursing homes could argue that such agreements are permissible under federal law. That is the argument the Oklahoma nursing homes have made.

You can read more on this issue in The Norman Transcript:

http://www.normantranscript.com/news/oklahoma/many-nursing-homes-require-families-to-sign-arbitration-agreements-before/article_09d84ebf-21c4-5b42-8f63-a3bc64d70437.html

Daniel J. Williams is an Elder Abuse Attorney with Fausone Bohn, LLP. The firm has former prosecutors and experienced attorneys who can help you and your family right the wrongs done to your loved one, whether it be nursing home abuse or financial exploitation. Call the Metro Detroit Elder Abuse attorneys today, at (248) 468-4536, or visit us
online at www.fb-firm.com. 

Court of Appeals Issues New Ruling on Municipal Construction Contract Disputes

Paul F. Bohn, Esq.

As a law firm with both municipal clients and construction business clients, we see both ends of construction litigation disputes. The latest case out of the Michigan Court of Appeals, DiPonio Contracting, Inc. v. City of Howell, sheds light on the importance of obtaining competent representation in such cases.

DiPonio Contracting, Inc. (DCI) was awarded a bid for a road reconstruction project in the City of Howell. After the contract was received, DCI received a set of revised plans, and DCI was asked by Howell on at least two occasions to stop work on the project and make some emergency repairs that were unrelated to the road project.

DCI requested project extensions so that work could be completed prior to the deadline, given the various additional requests. DCI eventually ceased working on the project, although they believed their work was complete. The City alleged that they were entitled to liquidated damages at $1,550 per day (for 32-plus days) for DCI failing to complete their work, specifically for street sign replacement. DCI believed the City’s changing of the brackets that were needed to replace the signs precluded them from those damages.

DCI filed a complaint against the City alleging a breach of contract and unjust enrichment, for $121,872.52. The City filed a counter-claim alleging they were entitled to $88,350 in liquidated damages.

The trial court ruled that the City wrongfully denied DCI’s request for extensions of time on the project and awarded DCI the full $121,872.50. But, the court also ruled the City was, in fact, entitled to 10 days of liquidated damages of $15,500, resulting in a net judgement of over $105,000 for DCI. The Court of Appeals affirmed the ruling, and ultimately, DCI was awarded an additional $24,000 in attorney fees.

The City accused the court of not enforcing the liquidated damages clause of the contract. However, the Court of Appeals noted that the trial court simply awarded 10 days of liquidated damages rather than the full amount of $88,000, which the court found to be unreasonable.

Large-scale construction projects such as this one can be complex, especially when the need for emergency repairs arise. Matters only become more complex when breach of contract allegations results from misunderstandings and miscommunication. Whether you are a municipality or a business, Fausone Bohn, LLP attorneys have extensive experience in both municipal matters and construction litigation. Don’t hesitate to contact us for a consultation.

Paul Bohn is a partner at the law firm of Fausone Bohn, LLP, and was named one of the Top Attorneys in Michigan in 2014 by Crain’s Detroit Business, and practices in the areas of construction and municipal law. If you need help on a construction or municipal law issue, contact Fausone Bohn, LLP at 248-468-4536, or visit us online at www.fb-firm.com. 

The Importance of Implementing a Computer Network Policy

Matthew Worley, Esq.

In an office setting, supervisors have known that improper use of the company’s technology results in poor productivity and lost profit.  There’s nothing worse than walking into an employee’s workspace and seeing facebook or youtube on the computer screen.  One of the most effective tools for preventing such abuse is implementing and enforcing a written computer network policy.

Regardless of the type of company, any computer network/IT policy should meet certain minimum standards.  The main purpose of such a policy is to explicitly define permitted and prohibited uses of the company’s computer systems.  The policy should state what the consequences for violations are as well.

Such a policy should be in writing and distributed to all employees.  Additionally, the employer needs to obtain from each employee an acknowledgement (in writing) that they received, read, and agree to abide by the policy.

In short, such a policy needs to convey to all employees that the company owns the computer systems, there is no expectation of privacy, and violations of the policy can result in discipline.  Having such a policy in place can increase productivity and keep employees accountable.

If you need advice about drafting and implementing an effective computer network and electronic communications policy, contact the team of legal experts at Fausone Bohn, LLP.  Our attorneys can walk you through the development of a policy specifically tailored to your needs.  Contact us at (248) 380-0000 or online at www.fb-firm.com.