AMM Partner and Corporate Department Chair Joanne Murray was recently interviewed by Laura Queen, Founder and CEO of 29Bison Human Capital consulting firm for their podcast “How the Deal Was Done”.  In this episode, Joanne discusses the path that lead her to her business law practice, as well as her approach to the deal making process and the complexities involved.   The interview features the haunting tale of  how the ghosts of owners past and present can make an appearance at the closing table, and one such ghost who almost scared away a deal!

Joanne Murray is committed to helping small business owners achieve their goals. From inception to business maturity, Joanne serves as an experienced and insightful counselor to business owners as they face the financial, legal and operational challenges that are an inevitable part of the life cycle of a business.

Joanne helps to guide entrepreneurs and closely-held businesses through the new entity formation process and to structure, negotiate and implement business transactions such as asset and stock acquisitions, mergers, financing transactions, real estate purchases and leases, and business separations. She also assists her business and nonprofit clients with negotiating a wide range of contracts, such as software licenses, consulting agreements, employment agreements and non-disclosure agreements. She works with business owners to develop, document and implement their business succession plans, including preparing buy-sell, partnership and LLC agreements. She frequently functions as outside general counsel for companies and nonprofit entities by handling corporate record-keeping and providing advice on corporate governance and other matters as needed.

Reprinted with permission from the August 18th, 2018 issue of The Legal Intelligencer. (c) 2018 ALM Media Properties. Further duplication without permission is prohibited.

A recent case from the United States District Court for the Tenth Circuit, First American Title Insurance Company, et al. v. Northwest Title Insurance Agency, et al., no. 17-4086, illustrates nicely the complicated issues faced in noncompete litigation, and the risks a good agreement can prevent.  Although the case arose in the United States District Court for the District of Utah, the issues confronted and legal principles cited arise frequently under Pennsylvania law.

The individual defendants were employed by First American Title Insurance Company, and had signed various restrictive covenants of one year in duration.  All individual defendants were subject to a code of ethics and employee handbook that required employees to use office equipment for company business only, and barred outside activity competing with First American.  First American Title Company acquired the stock of First American Title Insurance Company pursuant to a Stock Purchase Agreement.  Defendant Smith created defendant Northwest Title Insurance Company, and then quit his job with First American.  The day after Smith resigned defendants Carrell and Williams resigned and all individual defendants took positions at Northwest Title Insurance Company, along with twenty-five other employees over the next two weeks.  Litigation ensued, and defendants suffered a large jury award at trial.

Lesson 1:  File petitions for preliminary injunction early, and make sure to have a tolling provision in the agreement.  

The First American District Court denied the plaintiff’s motion for a preliminary injunction after a hearing, finding that there was no irreparable harm.  Notably, the individual defendants resigned in March of 2015, and their restrictive covenants, which did not contain tolling provisions, terminated in March of 2016.  Plaintiffs filed the petition for preliminary injunction in January of 2016, with only two months remaining on the restrictive covenants, and the motion was not heard until September 2016.    The case then proceeded to a trial, resulting in the appeal addressed by the Tenth Circuit.  An injunctive order entered early in a case tends to change the dynamic of a case going forward, providing opportunities for sanctions and contempt motions, and an incentive to settlement.  Certainly, defendants enjoyed an early victory that rendered this case solely about damages. Indeed, this may well have been the strategy:  part of the court’s reasoning on the preliminary injunction was that most of the damage had already been done, in light of the quick transfer of customers and employees.  

A preliminary injunction is only powerful when filed early, and it might be worth considering foregoing the motion in certain circumstances, where the tactical advantages of early filing are lost.  Most importantly, a tolling provision in the document might have changed the outcome:  drafters must include a provision that extends the duration of the restrictive covenant where the employee is in breach.  

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215-230-7500, ext. 115
jmurray@ammlaw.com

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Practice Groups:  

• Business & Finance
• Real Estate
• Banking
• Health Care

Education:

• Temple University School of Law, cum laude, 1990
• St. Joseph's University, B.S., cum laude, 1983

Bar Admissions:

• Pennsylvania, U.S. District Court for the Eastern District of Pennsylvania