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Court of Appeals of North Carolina issues MEDICAL STAFFING NETWORK, INC. ruling

A staffing company brought action against competitor and former employee, who began working for competitor, for breach of contract, misappropriation of trade secrets, unfair and deceptive trade practices, and tortious interference with a contract. Following a bench trial, the Superior Court, Wake County, James C. Spencer, J., entered judgment in favor of company. Competitor and former employee appealed. The Court of Appeals, McCullough, J., held that: (1) noncompetition agreement, which was executed as part of incentive stock option agreement, did not supersede earlier non-competition and non-solicitation agreement, and thus no novation occurred; (2) non-competition agreement extended beyond any legitimate interest that company might have had and thus was unenforceable; (3) evidence supported trial court's finding that competitor and former employee knew of company's confidential information, had opportunity to acquire it, and did so, causing harm to company; (4) violation of Trade Secrets Protection Act by former employee and competitor constituted unfair act or practice; and (5) company was entitled to greater of either extent to which company had suffered economic loss or extent to which competitor had unjustly benefited from use of company's marketing strategy information and per diem nurse information. Reversed in part and vacated and remanded in part.

Full post as published by The Trade Secrets Vault on February 02, 2009 (boomark / email).