Is this Non-Compete Agreement Enforceable?

By , March 25 2013

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I am often asked by business clients to prepare non-compete agreements for employees. As you might imagine, many businesses feel more secure knowing that their key employees are restricted from leaving and then going to work for business competitors. I am also asked by business executives to review non-compete agreements and consult on whether and how to strategically pursue a career opportunity. In both instances, the crucial issue centers on whether the non-compete is legally enforceable. The enforceability of a non-compete agreement is treated differently in every state. Some states, such as Florida, have enacted statutes that regulate non-compete agreements while other states, such as Tennessee, have a body of law applicable to non-competes that has been developed by the courts. In Tennessee, covenants not to compete are generally disfavored by the courts because they are deemed to be a restraint of trade and may place an inequitable burden upon […]

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Commercial Litigation: Notice of a Secured Party Sale

By , March 7 2013

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In a recent case, Regions Bank v. Thomas D. Thomas, et al., No. W2011-02320-COA-R3-CV (Tenn. Ct. App., March 4, 2013), the Tennessee Court of Appeals addressed the process for disposition of collateral under the Uniform Commercial Code (“UCC”). In August 2004, LGT Aviation, Inc. (“LGT”) obtained a loan in the amount of $2,351,700 from Regions Bank. The loan was secured by a 1981 Hawker HS 125-700A aircraft and guaranteed jointly and severally by two individuals and a family trust. One of the guarantors was the sole shareholder of LGT and the aircraft was acquired for his personal use. Among other things, the loan documents required that LGT maintain insurance on the aircraft in the amount of the outstanding loan balance. In August 2006, LGT allowed the insurance policy on the aircraft to lapse. Region’s Bank contacted LGT multiple times regarding the insurance coverage, and on numerous occasions, requested proof of insurance. […]

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FDCPA Litigation: The Loser May Be Stuck with Costs

By , February 27 2013

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In a recent opinion, the United States Supreme Court reminded litigants that the loser could be stuck with litigation costs. On February 26, 2013, the Supreme Court decided Marx v. General Revenue Corp. and addressed the taxation of litigation costs in lawsuits brought under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. In this case, plaintiff Olivia Marx filed suit alleging that General Revenue Corporation (GRC) violated the FDCPA by harassing and threatening her in order to collect on a debt related to a student loan.  She claimed that GRC violated the FDCPA by making improper phone calls and faxes in its attempts to collect the debt. The FDCPA is a consumer protection statute that prohibits certain abusive, deceptive, and unfair debt collection practices. The case was tried without a jury and the district court ruled in favor of the debt collection company and dismissed the case. […]

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The EEOC is Serious about Enforcing Retaliation Claims

By , February 13 2013

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On January 21, 2013, I reported on the EEOC’s aggressive Strategic Enforcement Plan for 2013. As noted in my post, one of the 6 major priorities of the plan includes: Preserving Access to the Legal System. The EEOC will target policies and practices that discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or that impede the EEOC’s investigative or enforcement efforts. In other words, the EEOC intends to focuses its efforts on workplace retaliation. Now, we know that the EEOC is doing more than playing lip service through its Strategic Enforcement Plan; a recent settlement in the U.S District Court for the Middle District of Tennessee demonstrates that the EEOC is actively pursuing retaliation claims. In EEOC v. Cappo Management XX, Inc., 12-CV-0239 (M.D. Tenn. Jan. 25, 2013 ), the EEOC brought suit against Cappo, which owns and operates Nissan car dealerships. The EEOC alleged that the […]

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Breach of Contract: The Duty of Good Faith and Fair Dealing in Commercial Contracts

By , February 11 2013

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The Tennessee Supreme Court recently addressed an important issue of first impression in Tennessee: whether the implied covenant of good faith and fair dealing applies to a silent consent provision regarding the assignability of a commercial contract. Dick Broadcasting Co., Inc. of Tennessee v. Oak Ridge FM, Inc., E2010-01685-SC-R11-CV (Tenn. Jan. 17, 2013). In this case, the plaintiff, Dick Broadcasting Co., Inc., entered into three contracts with the defendants, Oak Ridge FM, Inc., ComCon Consultants and John W. Pirkle, relating to the programing of a radio station in Oak Ridge, Tennessee. Thereafter, the plaintiff decided to sell all of its assets to Citadel Broadcasting Company for $300 Million. As part of this transaction, the plaintiff sought to assign its contracts with the defendants to Citadel.  One of the contracts, a Right-of-First-Refusal Agreement, contained a so-called “silent consent clause.” In other words, the contract provided that consent to the assignment was […]

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