Businesses in Tennessee will take all the necessary measures to protect their client base and proprietary information. For this reason, they may ask employees to sign a non-compete agreement or another contract that serves to prevent employees or past employees from interfering with the current and future operations of the business. However, what happens when an employer believes that a former employee has breached these contracts?
A defamation lawsuit brought by Lutheran Health Network (LHN) against a past chief executive officer will continue, per a judicial ruling that denied the CEO's motion to dismiss the legal action. The court determined it had jurisdiction over the case. However, the court also determined that a protective order that would have stopped another CEO from being deposed should be dismissed.
Per the lawsuit, the plaintiff argued that the defendant committed a breach of contract along with defamation against LHN when he interfered with LHN's current and future business relationships. According to LHN, the defendant's actions were "unlawful" and were the result of a planned scheme to harm LHN's business operations and impede LHN's relationships with clients and physicians. Also, the lawsuit alleges that the CEO started sharing proprietary information that was meant to be kept confidential starting in October 2016 and continuing even after he was let go form his job in June 2017, in order to benefit his own financial interests.
The defendant has denied that he committed the acts alleged in the lawsuit. He stated that he did not breach a contract and furthermore, as he told reporters, while he was employed with LHN he never entered into a non-compete contract.
Both parties are pleased with the judge's recent ruling. While it remains to be seen what the outcome of the case will be, it serves as an example of one of the many types of contractual disputes and allegations of interference with business relationships and contracts that could lead to business litigation. These types of cases have the propensity to be very complex, so those who are interested in pursuing one should make sure they understand how the law applies to the facts of their case before proceeding.
Source: wane.com, "Both sides claim early victory in suit against ex-CEO," Jan. 26, 2018