Communications Trends, Inc. (“CTI”) filed this lawsuit against its former employee, Lynette Fine, alleging claims for breach of a nonsolicitation covenant, breach of a nondisclosure covenant, violation of the Georgia Trade Secrets Act, and breach of a duty of loyalty. CTI also sued Fine’s current employer, Allscope Media, alleging claims for tortious interference with its business and contractual relationship with Fine. Fine and Allscope denied CTI’s allegations and filed a counterclaim alleging claims for defamation, libel and slander per se. 1 The parties filed cross-motions for summary judg ment. The trial court granted both motions. 2 In these consolidated appeals, the parties challenge the trial court’s summary judgment decisions. In Case No. A10A0408, we affirm the entry of summary judgment in favor of CTI as to the counterclaim. In Case No. A10A0409, we affirm the entry of summary judgment in favor of Fine and Allscope as to CTI’s claims for breach of the restrictive covenants and tortious interference. 3 However, we reverse the grant of summary judgment as to CTI’s claim against Fine for breach of a duty of loyalty.
“Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c).” (Citation omitted.)
Palombi v. Frito-Lay,
So viewed, the evidence shows that CTI is a business engaged in media planning, purchasing, and cable network programming. CTI’s major clients include several well-known cable television networks. In 1995, CTI hired Fine to serve as its media planner. Fine was subsequently promoted and became a corporate vice president at CTI. Fine was the main contact for CTI’s major clients, which allowed her to develop relationships with them. In the performance of her duties, Fine also had access to CTI’s client lists, client profiles, and media rates. In 1997, Fine executed a “Nondisclosure and Nonsolicitation Agreement” (collectively “the restrictive covenants”), which restricted her from disclosing any of CTI’s confidential information and trade secrets, and from soliciting any of CTI’s clients on behalf of a third party, throughout her employment and for a period of two years following the cessation of her employment.
In June 2005, Fine had a lunch meeting with the CEO of Allscope, a media competitor of CTI, and they began to discuss the possibility of Fine becoming employed with Allscope. Fine sent a projection of the
Fine’s last day of employment at CTI was on November 15, 2005. CTI distributed an e-mail to all of its clients, informing them that Fine was no longer employed with its company and that another CTI employee would be handling their accounts.
On November 16, 2005, Fine attended a large cable industry dinner as an Allscope employee and provided her new Allscope business cards to various executives in attendance, including executives affiliated with CTI’s clients. Fine testified that she informed CTI’s clients that she was not allowed to solicit them and that they would have to provide a statement in writing that she had not done so in order to continue doing business with her at Allscope. Fine further testified that if CTI’s clients contacted her and sent e-mails stating that they had not been solicited, she accepted their business.
Fine’s client base at Allscope primarily consisted of former CTI clients. Allscope sent the former CTI clients holiday gifts, and Fine invited them to attend a brunch at her house.
CTI’s executives subsequently noticed that some of their major clients were no longer responding to their calls and requests for meetings. When CTI’s executives attempted to schedule meetings with certain clients, they were informed that the clients were going to be doing business with Fine at Allscope. CTI’s executives also noticed that some of their client files had been wiped out of the system and updated client contact information was missing. CTI received information that Fine had been contacting its clients and vendors on behalf of Allscope and had been making disparaging remarks about CTI to others. CTI lost client accounts that it had previously been servicing for 13 years.
CTI filed suit and obtained a temporary restraining order that prohibited Fine from taking any actions that would violate the restrictive covenants. CTI also sent a letter to certain of its valued clients and publication vendors that informed them of the lawsuit and temporary restraining order. In the letter, CTI expressed an intent to protect its client relationships and requested that its clients report any communications from Fine and Allscope which urged the termination of the relationship with CTI or gave any negative information about CTI.
Based upon CTI’s letter, Fine and Allscope filed a counterclaim in the lawsuit, alleging claims of defamation, libel, and slander per se. Contending that CTI’s letter had caused them to lose a project from one of CTI’s former clients, Fine and Allscope sought compensatory damages, punitive damages, attorney fees, and expenses of litigation.
The parties filed motions for summary judgment as to the claims and counterclaims in the suit. The trial court granted summary judgment in favor of CTI as to the counterclaim. The trial court granted summary judgment in favor of Fine and Allscope as to CTI’s claims. These appeals ensued.
Case No. A10A0408
1. Fine and Allscope contend that the trial court erred in granting CTFs motion for summary judgment as to their claims for defamation and libel. 4 We discern no error.
(a) Fine and Allscope argue that the trial court’s determination of the motion for summary judgment was premature since the parties had not completed discovery.
5
Their
“The granting or denial of a motion under OCGA § 9-11-56 (f) lies in the sound discretion of the trial judge and will not be reversed absent a showing of clear abuse of discretion.” (Citation omitted.)
Jarallah v. Schoen,
(b) Fine and Allscope further contend that the trial court’s decision granting CTI’s motion for summary judgment was erroneous because the evidence created a genuine issue as to whether CTI’s letter to the clients and vendors was libelous. Again, no error has been shown. Because the evidence established that CTI’s letter was privileged as a matter of law, Fine and Allscope could not prevail on this claim.
“A libel is a false and malicious defamation of another, expressed in print, writing, pictures, or signs, tending to injure the reputation of the person and exposing him to public hatred, contempt, or ridicule.” OCGA § 51-5-1 (a). “Statements made with a good faith intent on the part of the speaker to protect his or her interest in a matter in which it is concerned” are deemed privileged. OCGA § 51-5-7 (3). “To make the defense of privilege complete, . . . good faith, an interest to be upheld, a statement properly limited in its scope, a proper occasion, and publication to proper persons must all appear.” (Citation, punctuation and footnote omitted.)
Rabun v. McCoy,
The libel claims alleged in this case were based upon a letter that CTI sent to its clients on February 2, 2005 and to its publication vendors on February 3, 2005. The letter was sent after the trial court had issued a restraining order prohibiting Fine from violating the terms of the restrictive covenants. The letter expressed that its purpose was “to keep [the client] informed as to the steps [CTI] ha[d] been forced to take to protect [its] [c]ompany from misinformation and the unlawful solicitation of. . . [its] valued client [ ] by [CTI’s] former employee, [Fine], and her current employee, [Allscope].” The letter further advised that the trial court had issued a restraining order against Fine and Allscope and substantially quoted the provisions of the temporary restraining order that protected CTI’s interests against any solicitations and disclosures that violated the restrictive covenants. It went on to state that CTI “immensely value[d] its relationships with its clients and would protect those relationships,” which had been “built on more than three decades of successf.]” The letter then ended in a request that the client report any contacts by
CTI’s president testified at his deposition that the letter was only sent to certain of its valued clients and that he did not contact clients whose business relationships were not at risk. He further stated that his intent in sending the letter was to inform CTI’s clients about the business situation and the restraining order. He stated that it also was necessary to inform CTI’s publication vendors about the situation since some of their rate cards related to exclusive pricing, which CTI deemed to be confidential and subject to the nondisclosure covenant.
Based upon the testimony of CTI’s president, the trial court was authorized to find that the letter was sent in good faith. Moreover, it is undisputed that CTI’s business relationships with its clients and vendors was an interest to be upheld. And, because the letter only advised clients about the issuance of the temporary restraining order and the prohibition against violations of the restrictive covenants, it was properly limited in its scope. In light of the pending litigation and issuance of the temporary restraining order, the letter also was issued on a proper occasion. Furthermore, the letter was published to proper persons, having been sent only to certain executives of the cable networks and publication vendors who had a business relationship with CTI before Fine left to work for Allscope.
7
The evidence therefore established as a matter of law that CTI’s letter was protected by the good faith privilege. See
Nelson v. Glynn-Brunswick Hosp. Auth.,
Fine and Allscope argue, however, that there was evidence indicating that CTI had sent the letter with a malicious intent to injure their business reputations. “Proof that the defendant acted with actual malice in making the statement . . . defeats the defense
of privilege.”
Rabun,
Fine and Allscope further argue that CTI’s statements accusing them of spreading misinformation and unlawfully soliciting CTI’s clients were not true and that CTI’s president had acknowledged in his deposition that he did not have any evidence supporting his accusations. But, the testimony from CTI’s president indicating that he did not have any legal “evidence” of the alleged unlawful solicitations did not show that CTI knew that the statements in its letter were false. CTI’s president and CEO both stated that they had reason to suspect that unlawful solicitations had occurred when they had received information that Fine had been contacting CTI’s former clients and the former clients began doing business with Allscope immediately after Fine started working there. Other deposition testimony and copies of e-mails exchanged between Fine, Allscope’s CEO, and CTI’s former clients presented conflicting evidence as to whether Fine had made disparaging remarks about CTI and had solicited CTI’s former clients. The fact that CTI, Fine
and Allscope had a dispute as to whether the restrictive covenants were valid and had been violated was not sufficient to show that CTI acted with malice. See, e.g.,
Smith,
“[Wjhether a showing of actual malice has been made [is an] issue[ ] to be determined by the trial judge in the first instance, and thus [is] particularly appropriate for summary resolution.” (Citations and punctuation omitted.)
Rabun,
2. Fine and Allscope also contend that the trial court erred in granting summary judgment in favor of CTI on their claims for punitive damages and attorney fees. Their contentions are without merit. Because Fine and Allscope failed to prevail on their underlying defamation claims, their ancillary claims for punitive damages and attorney fees under OCGA § 13-6-11 were not recoverable. See
Davis v. Johnson,
Case No. A10A0409
3. CTI contends that the trial court erred in finding that the nonsolicitation covenant was unenforceable. We disagree.
While a contract in general restraint of trade or which tends to lessen competition is against public policy and is void (1983 Ga. Const., Art. Ill, Sec. VI, Par. V (c); OCGA § 13-8-2), a restrictive covenant contained in an employment contract is considered to be in partial restraint of trade and will be upheld if the restraint imposed is not unreasonable, is founded on a valuable consideration, and is reasonably necessary to protect the interest of the party in whose favor it is imposed, and does not unduly prejudice the interests of the public. Whether the restraint imposed by the employment contract is reasonable is a question of law for determination by the court, which considers the nature and extent of the trade or business, the situation of the parties, and all the other circumstances.
(Citations and punctuation omitted.)
W. R. Grace & Co. v. Mouyal,
The nonsolicitation covenant in this case provided, in pertinent part, as follows:
4. Nonsolicitation of Clients. The Employee hereby also agrees and covenants with [CTI] that throughout the period of his employment and for a period of two (2) years immediately following cessation of Employee’s employment with [CTI], the Employee shall not solicit advertising media placement business similar to [CTI] on behalf of any persons or entity other than [CTI], either directly or indirectly, whether as a shareholder, partner, joint venturer, consultant, employee, officer, agent or otherwise, from any person or entity (or otherwise contact, call upon, communicate with or attempt to communicate with any such person or entity with a view to providing advertising media placement services competitive or potentially competitive with [CTI]).
(Emphasis supplied.) Based upon the above-emphasized terms of the parenthetical, the trial court held that the restrictive covenant was an overbroad, unreasonable restraint of trade since it not only prohibited Fine from soliciting CTI’s clients, but also prohibited her from “otherwise” communicating with the former clients to accept business, without solicitation and regardless of who initiated the contact. We agree.
“While a prohibition involving some affirmative act on the part of the former employee, such as solicitation, diversion, or contact of clients, may be reasonable, a covenant prohibiting a former employee from merely accepting business, without any solicitation, is not reasonable.” (Footnotes and emphasis omitted.)
Waldeck v. Curtis 1000, Inc.,
4. In addition, CTI contends that the trial court erred in finding that the nondisclosure covenant was void based upon the unenforce-ability of the nonsolicitation covenant. Pretermitting whether the trial court erred in its finding or whether the nondisclosure covenant was valid, 10 the trial court’s entry of summary judgment was authorized.
5. CTI further claims that the trial court erred in granting summary judgment in favor of Allscope on the claim for tortious interference with Fine and the restrictive covenants.
In establishing a cause of action for malicious or tor-tious interference with business relations, the appellants must demonstrate that the appellee (1) acted improperly and without privilege, (2) purposely and with malice with the intent to injure, (3) induced a third party or parties not to enter into or continue a business relationship with the appellants, and (4) for which the appellants suffered some financial injury. A cause of action for intentional interference with contractual rights must be based on the intentional and non-privileged interference by a third party with existing contractual rights and relations.
(Footnote and emphasis omitted.)
Tom’s Amusement Co. v. Total Vending Svcs.,
CTI further claims that Allscope engaged in tortious interference with the enforcement of the nondisclosure covenant by inducing Fine to disclose CTI’s confidential client billing histories in her revenue projections. “In Georgia, a competitor’s privilege of fair competition is lost when wrongful means in the solicitation of employees are utilized. Such wrongful means generally involve predatory tactics such as . . . use of confidential information^]” (Citation, punctuation and footnote omitted.)
Tom’s Amusement Co.,
Before making an offer of employment to Fine, Allscope’s CEO asked Fine to prepare a projection of revenues that she could generate upon joining the Allscope team. Allscope’s CEO, however, did not request that Fine’s projections be based upon CTI’s clients. Although Fine testified that she relied, in part, upon the billing histories of CTI’s clients in preparing her projections, there was no
evidence that Allscope requested that she do so.
11
Because there is no evidence that Allscope took any action to persuade or urge Fine to disclose any of CTI’s confidential billing histories, the trial court’s entry of summary judgment against
6. Lastly, CTI contends that summary judgment was erroneously granted as to its claim against Fine for breach of a duty of loyalty.
While employed as a vice president at CTI, Fine had authority to act as CTI’s agent and, in fact, was the primary contact for CTI’s major clients. As CTI’s agent, Fine owed a fiduciary duty to use her best skill and judgment to promote CTI’s interests during the term of her employment. See
Hanson Staple Co. v. Eckelberry,
A breach of this fiduciary duty is not occasioned simply by making plans to enter a competing business while still employed. See
Hanson Staple Co.,
Fine’s employment with CTI ended on November 15, 2005. There is no evidence that Fine solicited any of CTI’s clients while still employed at CTI. Rather, CTI contends that Fine breached her duty of loyalty by making detailed disclosures to Allscope regarding the revenue generated by various CTI clients, by failing to provide adequate notice prior to her leaving, and by deleting client contact information and destroying CTI’s files that had been in her possession.
(a) As explained in Division 4 above, the record does not reflect that Fine made any detailed disclosures of the revenue amounts generated by CTI’s clients. CTI’s claim in this regard, therefore, fails.
(b) Nor is there any evidence that Fine breached a duty of loyalty by resigning with short notice. CTI’s reliance upon
Witty v. McNeal Agency,
(c) CTI also contends that Fine breached her duty of loyalty by deleting its client contact information and destroying its client files prior to her departure, which caused it to lose crucial information regarding its major clients and weakened its position against the Allscope competitor.
Although there was no direct evidence supporting CTI’s allegations of misconduct, CTI presented circumstantial evidence from which an inference of the alleged misconduct could be drawn. CTI’s executives testified that before Fine left her employment with CTI, her office had been full of boxes containing CTI’s client files, her computer contained an e-mail list used to correspond with the clients, and her company Blackberry cell phone had been loaded with client contact information. After Fine left, however, CTI’s executives noticed that some of its client files had been wiped out of the system, documents had been removed from the client files that were in Fine’s office, the e-mail list had been deleted from Fine’s computer, and the client contact information had been deleted from her Blackberry. Based upon these circumstances,
Fine, however, denied CTI’s allegations. The question thus presented is whether CTI’s circumstantial evidence was sufficient to create a jury issue.
[Circumstantial evidence has no probative value in establishing a fact where such evidence is consistent with direct, unimpeached evidence showing the nonexistence of such fact. Put another way, before circumstantial evidence can have any probative value to rebut or contradict direct and positive testimony of an unimpeached witness of the alleged facts in question, such evidence must point at least more strongly to a conclusion opposite to the direct testimony. It is not sufficient that such circumstantial evidence points equally one way or the other. It is also true that for an inference drawn from circumstantial evidence to be sufficient to create a genuine issue of fact precluding summary judgment, it must be reasonable and must amount to more than mere speculation, conjecture, or possibility.
(Citations and punctuation omitted.)
Winder v. Paul Light’s Buckhead &c.
Plymouth,
Applying these principles in this case, we conclude that the circumstantial evidence was sufficient to require a jury’s determination of the issue. The circumstantial evidence supporting CTI’s claim that Fine had deleted and destroyed its client files was inconsistent with and contradicted Fine’s denial of the claim. The circumstantial evidence also showed that Fine had an opportunity and motive to deprive CTI of its client information and pointed at least more strongly to a conclusion that she had done so prior to leaving CTI to join its competitor. Based upon the evidence, the jury could draw reasonable inferences in favor of the claim. Consequently, the trial court erred in granting summary judgment as to this issue. See
Winder,
Judgment affirmed in Case No. A10A0408. Judgment affirmed in part and reversed in part in Case No. Al 0A0409.
Notes
Fine and Allscope also alleged a claim for tortious interference with business relations, but CTI’s appellate brief and pleadings indicate that they later voluntarily dismissed this claim. The voluntary dismissal has not been included in the appellate record. Regardless, the enumerations of error do not address this claim.
The trial court’s order failed to contain any factual findings or conclusions to explain its reasoning for granting the motions. Nevertheless, the trial court’s ruling will be affirmed if it is right for any reason.
See Abellera v.
Williamson,
CTI has not enumerated as error the trial court’s grant of summary judgment on the claim for violation of the Georgia Trade Secrets Act.
Fine and Allscope also contend that the trial court erred in granting summary judgment as to their slander claim. But, because their appellate brief fails to contain any argument or citation of authority supporting that claim, it has been abandoned under Court of Appeals Rule 25 (c) (2). See
Fleming v. Advanced Stores Co.,
Although Fine and Allscope argue that further discovery was needed to resolve the claims in the case, they filed a motion for summary judgment on November 12, 2008.
According to OCGA § 9-11-56 (f),
[if] it appearfs] from the affidavits of a party opposing the motion that he cannot, for reasons stated, present by affidavits facts essential to justify his opposition, the court may refuse the application for judgment, or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had, or may make such other order as is just.
CTI’s president testified that an executive of one of its major clients had previously advised that it was moving all of its business to Allscope, and thus, he was not sure whether that company was still a client at the time that the letter was sent. He also testified that CTI may have had outstanding projects with that client. Regardless, it is undisputed that CTI had maintained a business relationship with the client prior to Fine’s departure.
The Georgia legislature has recently enacted OCGA § 13-8-56, setting forth principles that are intended to prospectively govern the determinations of reasonableness of restrictive covenants. See Ga. L. 2009, p. 231. However, the statute will only become effective if an amendment to the Georgia Constitution passes voter approval in the 2010 general election. See Ga. L. 2009, p. 231, § 4. The statute has not yet become effective and does not apply in this case.
Contrary to CTI’s argument, the nonsolicitation covenant in this case was not substantially similar to those upheld in
W. R. Grace & Co.,
See
Sunstates Refrigerated Svcs. v. Griffin,
Moreover, as explained in Division 4 above, there is no evidence that Fine disclosed any details regarding the billing histories of CTI’s clients in her projections.
Furthermore, unlike in Witty, CTI has not shown that the one-and-a-half week notice provided an inadequate amount of time within which to contact its clients and engage in efforts to preserve its business interests. The evidence shows that Fine tendered her resignation to CTI on November 4, 2005 and her last day of employment was on November 15, 2005. Although CTI had received advance notice of Fine’s resignation, it did not take action to contact its clients until November 14, 2005.