Convicted Felon Cannot Hold Former Employees to Noncompete Agreement

When you sign an employment agreement, you probably do so thinking that your employer is going to take care of you. If the money and benefits are good, there probably is not that much else to worry about. However, sometimes your work situation can go downhill in a hurry. A recent case out of Jefferson County illustrates that point perfectly.

Three employees – Brooks, Yates, and Markos – were hired by Dr. Muhammad Wasim Ali to work in his company, RPM Cranes. Brooks and Yates possessed previous experience in the crane industry. In working for RPM, they helped educated Dr. Ali on the ins and outs of the crane industry, as he had no prior experience.

After working for RPM from 2008 to 2015, the employees started getting suspicious of the company’s situation. For example, their company credit cards started being declined when buying fuel for the cranes. Further, when doing sales demonstrations, they were not allowed to buy lunch for the potential clients. As a last straw, they found out that Dr. Ali had not been paying for their health insurance. Finally, the company filed for bankruptcy in June 2015.

Concurrently with these events, Dr. Ali was indicted in Federal court for unlawfully distributing controlled substances, namely pain medication. As a result, the employees collectively decided it was time to go and find other work. The three employees left to join CraneWorks, for whom Brooks and Yates worked before starting at RPM Cranes.

To their dismay, Brooks and Yates signed a non-compete agreement when they initially joined RPM; Markos apparently signed one when he moved into a sales role. Dr. Ali attempted to enforce the noncompete agreement in court. The trial court examined each factor of the legal test for whether a noncompete agreement is enforceable. After examining the factors, they found that each factor weighed in favor of the employees. Despite that, they still found in favor of Dr. Ali, and issued a permanent injunction preventing the employees from working for CraneWorks.

The employees appealed to the Alabama Supreme Court. In Craneworks, Inc. v. RPM Cranes, LLC, the Court did not look kindly on how the trial court treated the case. In fact, they seemed positively confused by how the trial court found in favor of the employees on every point but still decided for Ali. They reversed the trial court’s injunction and remanded for the trial court to fix the problems with its decision.

If you are involved in a business dispute, you should make sure you have all your bases covered. That means that an attorney experienced in resolving business and employment disputes is very important. If you are involved in a business dispute, contact Ingram Law LLC at (205) 236-3997.

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