Lawyers at DBMS successfully litigate a wide variety of civil cases and argue appeals in some of the most challenging jurisdictions in the country.

Professional Liability

Plaintiff v. Defendant Corporate Attorney and Defendant Law Firm

01/07/2020
Client:

Defendant Corporate Attorney and Defendant Law Firm

Outcome:

Verdict for the Defendants

Synopsis:

DBMS successfully defended a corporate attorney and his law firm in a bench trial accused of failing to include a restrictive covenant within the plaintiff’s employee’s contract and failing to advise the plaintiff of the necessity and purpose of restrictive covenants. The plaintiff claimed that it retained the defendants to prepare an employment contract, and that the defendants failed to include a restrictive covenant within the employment contract. The employee resigned and successfully competed against the plaintiff for a business contract. The plaintiff claimed $1.5 million per year, for 20 years, in lost profits.

The defendant attorney testified that the plaintiff sent him the employment contract at issue as a template for making certain additions to the contract that the plaintiff would use for unrelated contracts in the future. The plaintiff sent an unsigned contract and did not tell the defendants that the plaintiff entered into this contract with an existing employee. The defendant attorney compared the contract to previous contracts and identified that the earlier contracts contained a restrictive covenant. The defendant attorney sent the plaintiff a note commenting that he made the requested changes, but he also added a restrictive covenant because he did not know if the plaintiff intentionally removed it. The defendant attorney testified that the plaintiff asked him to remove the restrictive covenant. The defendant attorney removed the restrictive covenant and returned the contract to the plaintiff.

Plaintiff’s standard of care expert testified that the standard of care required the defendant attorney to include a restrictive covenant within the plaintiff’s employee’s contract. Alternatively, plaintiff argued that even if the defendants did not prepare the employment agreement, the defendants had an opportunity to review the employment agreement within the employee’s probationary period. The plaintiff argued that if the defendants would have advised plaintiff of the need for a restrictive covenant after the contract was signed but within the probationary period, then the plaintiff could have taken corrective action during the probationary period.

The defendants’ standard of care expert opined that the decision to include a restrictive covenant was a business decision, and that the standard of care did not require the defendants to include a restrictive covenant if the plaintiff did not want one. The defendants’ expert opined that the defendants advised the plaintiff of the necessity and purpose of a restrictive covenant during the course of an earlier transaction. The plaintiff was a sophisticated businessman who understood the nature and purpose of a restrictive covenant. The standard of care did not require the defendants to repeatedly advise the plaintiff of the purpose of a restrictive covenant every time the defendants prepared a new contract for the plaintiff. Further, the defendants sent an email notifying the plaintiff of the missing restrictive covenant within the plaintiff’s employee’s probationary period. Accordingly, the plaintiff was on notice of the missing restrictive covenant during the plaintiff’s employee’s probationary period.

The circuit court judge entered a verdict in favor of the defendants.