TULSA, OK – Ford & Harrison successfully represented HD Supply, Inc. (HD Supply) in securing a favorable judgment after trial in a non-compete claim against defendants John R. Sappington and William B. Emmer of Rolled Alloys, Inc. As decided by Chief Judge Claire V. Eagan of the U.S. District Court for the Northern District of Oklahoma, the former HD Supply employees were in direct violation of their non-compete clauses when, late last year, they opened a competing branch of Rolled Alloys in the same town where they had worked for over ten years on behalf of HD Supply.
As background, on January 4, 1997, HD Supply acquired all shares of Metals Group through a stock transaction. As a condition precedent to the closing of the sale, Metals Group employees Mr. Sappington and Mr. Emmer entered into non-competition agreements with HD Supply, stating that they were not eligible to conduct competing business in several states, including Oklahoma. In 2007, however, Mr. Sappington and Mr. Emmer left Metals Group to assist in the opening of a new branch location for Rolled Alloys, a direct competitor in Tulsa, resulting in a profit loss for Metals Group.
In addition to Mr. Sappington and Mr. Emmer’s breach of their non-compete clauses, the Court found that Mr. Sappington breached his fiduciary duties by not acting in Metals Group’s best interest while he was still employed by the company. It was also determined that Rolled Alloys intentionally and unlawfully interfered with Mr. Sappington and Mr. Emmer’s contractual relationship with Metals Group and that Mr. Sappington misappropriated Metals Group’s trade secrets for the benefit of Rolled Alloys’ business.
As a result of their violation of the non-compete clause, Mr. Sappington and Mr. Emmer are restrained for one year from engaging in any business that competes with HD Supply in the applicable territory in Oklahoma. HD Supply additionally recovered $62,580 for lost profit and damages. In addition, HD Supply was granted leave to seek its attorneys’ fees and costs.
“Mr. Sappington and Mr. Emmer gained a competitive advantage by using and disclosing confidential information about their former employer’s operations and trade secrets. We are happy that the Court chose to uphold and enforce the non-compete agreements which formed substantial consideration in HD Supply’s decision to purchase their former company,” said Ford & Harrison Partner William E. Grob.
In addition to Mr. Grob, the Ford & Harrison team representing HD Supply consisted of Partner Dawn Siler-Nixon (Tampa), Partner Dinita L. James (Phoenix), and Associate Kylie Crawford (Phoenix). For further explanation of the case or the Court’s ruling, please contact Ms. Siler-Nixon (dsiler-nixon@fordharrison.com; (813) 261-7834).