8th Circuit finds no breach of contract, either express or implied

The U.S. 8th Circuit Court of Appeals (whose rulings apply to all Nebraska employers) recently upheld the summary dismissal of an employer’s breach of contract and related claims against three former employees who departed to start their own company. The decision is instructive because it addresses issues concerning actual express contracts and whether the employees had “implied contracts” with the previous employer, as well as allegations of breach of duty of loyalty, unlawful use of trade secrets, and rights to inventions and patents.

Facts

Jason Tatge, Heath Gerlock, and Randy Nuss left a company called Crop Ventures to cofound Farmobile. Crop Ventures’ successor-in-interest is Farmers Edge Inc (FEI). Both FEI and Farmobile are agricultural technology companies that work on “precision agriculture” using specialized data in farming.

Nuss actually worked for Crop Ventures as an independent contractor under a formal independent contractor agreement from April 2012 to August 2012, at which time he left Crop Ventures. A few months later, he returned as a full-time employee from October 2012 to July 2013 and didn’t sign any new employment agreement applicable to his subsequent employment.

Tatge, Gerlock, and Nuss left Crop Ventures in July 2013. By September 2013, they had founded Farmobile. They then filed two U.S. provisional patent applications, and in April 2015, they filed a Canadian patent application.