212 N.C. App. 349
N.C. Ct. App.2011Background
- Merger of Winston Hotels, Inc. into Inland American Winston Hotels, Inc. on July 1, 2007; executives Crockett and Winston signed non-compete agreements effective July 1, 2007.
- Plaintiff Inland alleged two breach-of-contract claims based on defendants allegedly soliciting, recruiting, or inducing Inland employees Brent West and Brian Fry.
- Defendants Crockett and Winston resigned from Inland, formed Crockett Capital Corporation and Winston Hospitality, Inc., and later hired Inland employees West (as CFO) and Fry (as director of development).
- West resigned from Inland on August 29, 2007; Fry was terminated from Inland on June 30, 2007; both later engaged with defendants in roles related to hotel development projects.
- The trial court granted summary judgment for defendants and Inland appealed, challenging whether hiring violated the non-compete and whether the terms were interpreted correctly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the non-compete’s 'solicit, recruit or induce' clause was violated. | Inland contends defendants violated by hiring West and Fry in breach of the clause. | Defendants argue no solicitation occurred; hiring a former employee was permissible under the contract. | No genuine issue of material fact; no breach as to West and Fry; hiring did not constitute solicitation. |
| Whether West’s and Winston’s actions constituted solicitation of Inland employees. | Inland argues there were meetings and discussions that amounted to solicitation. | West approached Winston; Winston did not actively solicit; no inducement. | No solicitation found; West initiated discussions; no breach. |
| Whether Fry’s hiring violated the non-compete. | Inland asserts Fry’s hire violated the clause as an inducement. | Fry approached Winston; no active solicitation; no breach. | No breach as to Fry; no evidence of solicitation. |
Key Cases Cited
- Metcalf v. Black Dog Realty, LLC, 200 N.C.App. 619, 684 S.E.2d 709 (2009) (contract interpretation when terms are plain vs ambiguous)
- Liptrap v. Coyne, 196 N.C.App. 739, 675 S.E.2d 693 (2009) (contract interpretation; ambiguity framework)
- Sturgill v. Ashe Memorial Hosp., Inc., 186 N.C.App. 624, 652 S.E.2d 302 (2007) (summary judgment de novo review; evidence viewed in plaintiff's favor)
- Mitchell v. Brewer, N.C.App. , 705 S.E.2d 757 (2011) (quotation on standard of review for summary judgment)