Monday, December 28, 2009

Court reviews enforceability of non-compete provision of employment agreement

DAREL L. JONES, ET AL. v. UNITED PROPANE GAS, INC., ET AL. (Tenn. Ct. App. December 28, 2009)

Darel L. Jones, Donald A. Maples, Jr., and Heritage Operating, L.P., dba Hydratane of Athens (collectively "the Plaintiffs") commenced this litigation originally against United Propane Gas, Inc. ("UPG"), with a petition seeking a declaration that the Pricing, Confidentiality and Post- Employment Activities Agreement (referred to as "the Agreement," "the Jones Agreement," or "the Maples Agreement" as the context requires) signed by Jones and Maples in favor of their past employer, Ocoee River Propane Gas, Inc. ("ORP"), was unenforceable and that their new employer, Hydratane, had no liability for hiring them. The Plaintiffs later amended their petition to add ORP as a defendant. UPG and ORP (collectively "the Gas Companies") filed an answer asserting, among other things, (1) that they were independent entities and (2) that Jones and Maples were not UPG employees. ORP filed a counterclaim against Maples asking that he be held in breach of contract and enjoined from violating the Agreement as well as a counterclaim against Hydratane for tortuous interference with the Agreement.

After a bench trial, the court announced its findings in favor of the Plaintiffs from the bench and later signed and entered an order submitted by the Gas Companies that limited the effect of the court's ruling to "the non-compete provision" of the Agreement. The Plaintiffs filed a motion to alter or amend which the trial court granted, the effect of which was to hold that the Agreement in its entirety, rather than just the non-compete provision, was unenforceable. The Gas Companies appeal. We affirm.

Opinion may be found at: