Absence of noncompete agreement no license to take business from former employer

The past decade has seen a marked proliferation of noncompete and trade secrets litigation. In a recent Nebraska Court of Appeals case, an executive took business to a new employer. Even though he had no written employment contract or confidentiality, noncompete, or nonsolicitation agreements with his old employer, he was nevertheless found liable along with the new employer for conspiring to interfere and interfering with business relationships and breaching his fiduciary duty and duty of loyalty to the previous employer.

Facts

General contractor Summit Restoration performs restoration and roofing work after severe storms. Aspen Contracting also operated in the same region as a competitor. Larry Keller began working for Summit in June 2013 but left one year later left to start working for Aspen.

Keller joined Summit as chief operating officer but shortly thereafter became chief executive officer (CEO). He managed the company’s day-to-day operations and received an annual salary of $120,000. He never had a written employment contract, however, nor did he ever sign a confidentiality, noncompete, or nonsolicitation agreement.

The Omaha, Nebraska, area experienced a major hailstorm in June 2014. Keller and his sales representatives made contact with numerous homeowners who had suffered damage from the storm, conducted inspections of their properties, and created estimate reports. He would then meet with insurance adjusters for the companies insuring each property in hopes of obtaining a draft contingency agreement to perform the repairs.