Bus. Communications, Inc. v. Banks


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Docket Number: 2009-CA-00407-COA
Linked Case(s): 2009-CA-00407-COA ; 2009-CT-00407-SCT ; 2009-CT-00407-SCT

Court of Appeals: Opinion Link
Opinion Date: 02-22-2011
Opinion Author: Griffis, J.
Holding: Affirmed in part, reversed and remanded in part.

Additional Case Information: Topic: Contract - Breach of business protection agreement - M.R.C.P. 51(b) - Breach of reimbursement of costs agreement
Judge(s) Concurring: Lee, P.J., Barnes, Ishee, Roberts and Carlton, JJ.
Non Participating Judge(s): King, C.J., and Maxwell, J.
Concur in Part, Dissent in Part 1: Myers, P.J., with separate written opinion
Concur in Part, Dissent in Part Joined By 1: Irving, J.
Procedural History: JNOV
Nature of the Case: CIVIL - CONTRACT
Appealed from Court of Appeals

Trial Court: Date of Trial Judgment: 03-02-2009
Appealed from: MADISON COUNTY CIRCUIT COURT
Judge: WILLIAM E. CHAPMAN III
Disposition: ENTERED A JUDGMENT NOTWITHSTANDING THE VERDICT IN FAVOR OF ALBERT BANKS
Case Number: 2006-0150

Note: The Supreme Court's opinion can be found at http://courts.ms.gov/Images/Opinions/CO78445.pdf

  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Business Communications, Inc.




STEPHEN J. CARMODY, JOHN CURTIS HALL II



 
  • Appellant #1 Brief
  • Appellant #1 Reply Brief

  • Appellee: Albert Banks SILAS W. MCCHAREN, BRANDI S. SHAFER  

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    Topic: Contract - Breach of business protection agreement - M.R.C.P. 51(b) - Breach of reimbursement of costs agreement

    Summary of the Facts: Business Communications, Inc. brought several employment related claims against its former employee, Albert Banks. After a trial, the jury awarded BCI $1,000 in damages for Banks’s breach of a “Business Protection Agreement” due to Banks’s subsequent employment with a competitor-company, GKR Systems, Inc. d/b/a Venture Technologies. The jury also awarded BCI $9,000 in damages for Banks’s breach of the cost-reimbursement provision of the BCI employee handbook. The circuit court then granted Banks’s motion for a JNOV and entered a final judgment in favor of Banks. BCI appeals.

    Summary of Opinion Analysis: Issue 1: Breach of business protection agreement BCI argues that the circuit court erred when it granted Banks’s motion for a JNOV and entered a judgment as a matter of law in favor of Banks on the breach-of-contract claim for damages based on the BPA. BCI argues that Mississippi law does not require a finding of “unfair competition” to enforce a non-competition agreement. BCI also argues that if a finding of “unfair competition” is the proper legal element, then it was not presented before the jury was instructed, was not contained in the jury instructions, and was not part of the jury’s deliberation and decision. The circuit court erred when it found that to establish a breach of the noncompetition agreement BCI had to prove some “unfair” competition resulted from Banks’s employment with a competitor. No such term existed in the BPA between Banks and BCI. There was no such evidentiary requirement in the BPA, and no such requirement exists under Mississippi law. There was simply no authority for the circuit court to have compared the competition between BCI (Banks’s former employer) and Venture (Banks’s current employer) to conclude whether the covenant not to compete in the BPA should be enforced. Under Mississippi law, covenants not to compete are valid and enforceable. Such covenants may be used to protect confidential information, trade secrets, proprietary information, customer lists, vendor relationships, business practices, and the employer’s investment in training and education of an employee. The employee may not simply take such information to a competitor. Mississippi courts have enforced covenants not to compete when former employees who, like Banks, have peculiar knowledge of and relationships with the employer’s customers and vendors. The enforceability of a non-compete agreement is largely predicated upon the reasonableness and specificity of its terms, primarily the duration of the restriction and its geographic scope. A court must also examine the covenant's effect on the rights of the employer, the rights of the employee, and the rights of the public, and balance these respective interests. Here, the circuit judge focused on the competition between the two employers, BCI and Venture. The balancing test is actually between the employer (BCI), the employee (Banks), and the public. What BCI sought to protect was Banks’s giving of information to Venture that could be used to improve Venture’s competitive advantage. Banks had access to BCI’s confidential information and proprietary business methods. Banks acknowledged the importance of this when he signed the BPA. The territorial scope and period of restriction in the BPA was reasonable. The BPA prohibited Banks from competition only in the areas where BCI has an office. Banks admitted at trial that he could work in other cities where BCI had no offices. The one-year term of the BPA was reasonable. The circuit judge considered, in a post-trial motion, a legal element that was not presented before the jury was instructed, was not contained in the jury instructions, and was not part of the jury’s deliberation and decision. It was error that the circuit judge added a legal element of proof post-trial. M.R.C.P. 51(b) requires the parties to submit jury instructions on substantive law of the case to the court. The evidence established that Banks, while working at BCI and in the process of seeking other employment, shared his BPA with BellSouth and Venture, two of BCI’s biggest competitors. Banks breached a material term in his employment agreement by disclosing the BPA, which was BCI’s confidential information. The evidence revealed that Banks took BCI’s property with him when he left. Banks took BCI’s books, a listing of overdue work orders, several Cisco documents, a BCI employee handbook, a backup computer file containing BCI information, and BCI files stored on his personal computer. Banks testified that he retained these documents inadvertently. Inadvertent or intentional, Banks’s retention of BCI’s confidential property was a breach of the BPA. Issue 2: Breach of 2005 Reimbursement of Costs Agreement BCI argues that the trial court erred when it granted Banks’ motion for a JNOV and entered a judgment as a matter of law in favor of Banks on the breach-of-contract claim for damages based on the unsigned 2005 RCA, which is contained in BCI’s employee handbook. BCI claims that the evidence established that Banks’s duties to comply with the provisions of his employee handbook arose as part of his obligations under his employment contract with BCI. A written contract can be modified by a policy handbook which then becomes part of the contract, but only where the contract expressly provides that it will be performed in accordance with the policies, rules and regulations of the employer. Here, there was no dispute that Banks did not sign the employee handbook or the RCA. He did, however, execute a written employment contract. The employee handbook did indeed give rise to duties and obligations on the part of both parties. The question, therefore, is whether there was sufficient evidence to support the jury’s verdict that found Banks was obligated to reimburse BCI $9,000 in damages for breach of the RCA. The circuit court was correct to grant a JNOV as to the jury’s verdict that awarded BCI $9,000 in damages for Banks’s breach of the cost-reimbursement provision (2005 RCA) of the BCI employee handbook. The provision for reimbursement of costs clearly anticipated that the employee would sign, date, and have a witness sign the 2005 RCA before it would be enforceable. Without the execution of the agreement by the employee, it cannot be enforced.


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