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Posted by: Brittany Sims on Oct 31, 2013

Court: TN Court of Appeals

Attorneys 1:

Edward H. Trent and Catherine E. Shuck, Knoxville, Tennessee, for the appellants, Continental Car Club, Inc. and Fortegra Financial Corporation.

Attorneys 2:

R. Wayne Peters and Gary L. Henry, Chattanooga, Tennessee, for the appellees, James F. Dill, Jr. and James C. Thurman, Jr.

Judge(s): SUSANO

Two executive employees of Continental Car Club, Inc., resigned in order to start a business in competition with their former employer. The issues on appeal are (1) whether the employees resigned for “Good Reason” as that term is defined in their employment agreements; (2) whether the employees violated their employment agreements by copying all the data on their work computers to personal computers shortly before resigning; (3) whether the non-competition and non-solicitation provisions of their agreements are enforceable; (4) whether the trial court correctly found the employees liable for conversion; and (5) whether the employees violated the Tennessee or Florida Uniform Trade Secrets Act. We hold that the employees did not establish that they resigned for “Good Reason.” We further hold that they violated their employment agreements, and, accordingly, we reverse the trial court’s judgment awarding them severance pay and benefits. We affirm the trial court’s judgment on the conversion claim but modify the judgment to award the former employer the value of tickets to a football game that one of the employees converted by sending the tickets to business clients, then renting a bus and taking the clients to the game several months after the employee’s resignation. We hold that the trial court correctly determined that the covenants not to compete were valid and enforceable and that the agreements are reasonable in time and geographic limits but overbroad in scope. Therefore, we reverse the trial court’s judgment in part and modify it in part. With respect to the portion of the trial court’s judgment not reversed, we affirm, as modified.