Gaddis Events, Inc. v. Shauna Wu
75227-8
| Wash. Ct. App. | May 30, 2017Background
- Wu worked for Gaddis Events and signed a noncompete barring her from working in corporate events for two years within 100 miles of Seattle or for any of Gaddis's clients.
- After leaving Gaddis, Wu was hired by Wunderman and assigned to a roadshow for the Microsoft U.S. Devices Team (MSUS Devices Team); Wunderman had secured the contract before hiring Wu.
- Gaddis sued Wu for breach of contract, misuse of trade secrets/confidential information, and tortious interference, and obtained a temporary restraining order (TRO) preventing Wu from working for Gaddis's clients.
- The trial court denied a preliminary injunction, later granted summary judgment in favor of Wu on all substantive claims and denied a permanent injunction, and awarded Wu attorney fees under the contract.
- Gaddis appealed denial of the preliminary injunction, the grant of summary judgment (and denial of permanent injunction), and the attorney-fee award; the Court of Appeals affirmed.
Issues
| Issue | Gaddis's Argument | Wu's Argument | Held |
|---|---|---|---|
| Whether a preliminary injunction was warranted to enforce the noncompete | Noncompete was valid and enforceable; injunction necessary to protect client relationships | No imminent invasion or actual/substantial harm; Wunderman obtained contract before hiring Wu | Court did not abuse discretion in denying preliminary injunction (no well‑grounded fear or substantial injury) |
| Whether summary judgment should be denied and a permanent injunction issued to enforce the noncompete | Noncompete protects Gaddis's client base and is necessary/reasonable to restrain Wu | Wu had no access to trade secrets or clients post‑employment; her role was logistical and Wunderman procured the client before hiring her | Summary judgment for Wu: noncompete unenforceable as applied—no protectable interest or threat and restraint was unreasonable |
| Appropriate legal standard at preliminary injunction stage | Preliminary determination should focus on enforceability of noncompete itself | Standard is the usual preliminary injunction test (Rabon), not the full noncompete‑reasonableness inquiry | Rabon test governs preliminary injunction; Gaddis's argument rejected |
| Whether Wu was the prevailing party entitled to contractual attorney fees and whether the fee amount was reasonable | Wu did not prevail on all claims (she dismissed counterclaims) so shouldn't get fees or fee calculation was improper | Wu obtained summary judgment on Gaddis's claims and was the substantial prevailing party; counsel excluded non‑shifting time and provided detailed affidavits | Wu was the prevailing party under the contract; trial court did not abuse discretion in awarding and calculating fees (including 1.25 multiplier); appellate fees allowed subject to RAP 18.1(d) |
Key Cases Cited
- Rabon v. City of Seattle, 135 Wn.2d 278 (Wash. 1998) (preliminary injunction test: clear right, well‑grounded fear of invasion, and likely substantial injury)
- Kucera v. State, Dep't of Transp., 140 Wn.2d 200 (Wash. 2000) (standards for preliminary injunction review)
- Emerick v. Cardiac Study Center, Inc., P.S., 189 Wn. App. 711 (Wash. Ct. App. 2015) (analysis of noncompete enforceability; distinction between enforceability and preliminary injunction showing)
- Labriola v. Pollard Group, Inc., 152 Wn.2d 828 (Wash. 2004) (Washington law on enforceability of noncompete agreements)
- Copier Specialists, Inc. v. Gillen, 76 Wn. App. 771 (Wash. Ct. App. 1995) (skills acquired during employment generally do not justify enforcing a covenant not to compete)
- Perry v. Moran, 109 Wn.2d 691 (Wash. 1987) (employer may bar performance of services to former employer's clients without proving solicitation when employees take clients and business)
- Nowogroski Ins. v. Rucker, 137 Wn.2d 427 (Wash. 1999) (legitimate employer interests include protecting trade secrets, confidential information, and client relationships)