Wade S. Dunbar Insurance Agency, Inc. v. James Alex Barber

Wade S. Dunbar Insurance Agency, Inc. (“plaintiff”) instituted an action seeking to enforce a covenant not to compete against James Alex Barber (“defendant”). The trial court granted plaintiff a preliminary injunction, and defendant appeals. We affirm.

I. Facts

In March 1994, plaintiff and defendant agreed that plaintiff would purchase defendant's existing insurance agency and that defendant would become an employee of plaintiff. Defendant also agreed to sign an employment agreement including a covenant not to compete. The agreement and purchase were to become effective on 1 April 1994. Wade S. Dunbar (“Mr. Dunbar”), president of plaintiff agency, testified that he and defendant had discussed the terms of the employment agreement and covenant not to compete during their negotiation meetings. On 1 April 1994, Mr. Dunbar presented defendant with the employment agreement. Mr. Dunbar further testified that defendant wished to look over the agreement and six months later, he asked defendant again about the employment agreement. Defendant stated he was still looking it over and then finally signed the employment agreement about a year later. Defendant did not request any changes to either the employment agreement or the covenant not to compete.

The covenant not to compete provides in pertinent part: (1) that defendant will not, during employment or after termination of employment, reveal or disclose any confidential information, including but not limited to, business secrets of plaintiff, or the names, addresses and requirements of any customers of plaintiff; (2) that defendant will not engage, directly or indirectly, in the same or similar business of plaintiff for two full years in Scotland County or any other county where plaintiff has an office in which defendant worked for at least sixty days within one year preceding the date of termination; (3) that defendant will not solicit any customers of plaintiff who have an active account with plaintiff at the time of termination or any prospective client whom defendant has solicited within six months preceding the date of termination; (4) that all the terms of the employment agreement, including the covenant not to compete, were fully discussed priorto defendant's employment with plaintiff; and (5) that defendant expressly recognizes that any breach of the covenant will result in irreparable injury to plaintiff.

Sometime in October 2000, defendant gave Mr. Dunbar a note stating his resignation as of 31 October 2000. Mr. Dunbar rejected this resignation date as it was not in conformance with the thirty day notice requirement and set defendant's termination effective 30 November 2000. Plaintiff paid defendant his full salary through this date. Defendant testified that his employment with plaintiff terminated on 31 October 2000.

Defendant was subsequently employed by The Cannady Group, another insurance agency in Moore County. Defendant and his current employer both testified that defendant solicited business from one of plaintiff's largest clients. Another client testified by affidavit that she contacted plaintiff for life insurance and was sold a policy by defendant through another underwriter on 16 November 2000.

Defendant testified that he was not aware of the covenant not to compete. Defendant claims that the terms of the covenant were not discussed prior to his employment with plaintiff, and that he was not presented with the employment agreement until May 1995.

* * *

Click the case caption above for the full text of the Court's opinion.

We conclude that plaintiff met its burden of showing a likelihood of success on the merits as to the enforceability of the covenant not to compete and the breach of said covenant by defendant. We hold that the trial court correctly granted a preliminary injunction enforcing the non-compete, non-solicitation,and non-disclosure provisions of the employment agreement.

Affirmed.

Unknown

Unknown

Reported by Kent Morlan