American Consulting, Inc. v. Hannum Wagle & Cline Engineering, Inc.Annotate this Case
The Supreme Court affirmed the trial court's judgment in this action by an employer against several of its former employees and their new employer for alleged violations of the former employees' noncompetition and non-solicitation agreements, holding that the liquidated damages provisions in the employees' contracts were unenforceable and that there remained an issue of material fact precluding summary judgment as to the employer's tortious interference claims.
The employer in this case brought claims against its former employees, including tortious interference with a contractual relationship and breach of contract claims. The trial court (1) granted summary judgment for the former employees on the issue of liquidated damages, finding that the liquidated damages provisions in the employees' contracts were unenforceable as a matter of law; and (2) found that there were issues of material fact regarding precluding summary judgment on the breach of contract claim. The Supreme Court affirmed, holding (1) the liquidated damages provisions were unenforceable penalties; and (2) an issue of material fact remained as to the employer's tortious interference with a contractual relationship claim.