Despite what Hollywood would have their audiences believe, most civil lawsuits settle before ever reaching a jury trial. When cases do make it to a jury, the selection process is very important. In domestic violence cases, defense attorneys aren’t likely to select a juror that suffered through similar circumstances. In civil cases, a plaintiffs’ attorney would likely dismiss a juror who has been a loyal employee of the defendant. It is easy enough to ask the jury basic questions during the selection process or garner simple information from juror questionnaires, but this is the information age and publicly available personal details are out there for…
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The Strict Blue Pencil Doctrine is Alive and Well in NC Courts
In a time where pencils and pens are quickly being replaced by keyboards, styli, and even one’s own fingers, the North Carolina Supreme Court ruled last week that the strict blue pencil doctrine remains alive and well – at least when it comes to non-compete clauses in employment agreements. The blue pencil doctrine originated in 1961 and essentially states that if a non-compete clause in an employment contract is “unreasonably broad,” then the Court has the power to use its blue pencil to literally strike the over broad provisions from the contract. Last week, in Beverage Sys. Of the…
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Counterclaims: When to Designate a Case to the North Carolina Business Court
The North Carolina Business Court (“Business Court”) is a specialized forum designed to adjudicate cases involving complex and significant issues of corporate governance and commercial law. If a dispute involves one of the subject matters enumerated in North Carolina General Statute § 74-45.4, then the case shall be designated and assigned to the Business Court. Cases may also qualify for discretionary assignments to the Business Court under Rule 2.1 of the General Rules of Practice for Superior and District Courts if it does not qualify for mandatory designation but involves certain other factors. Mandatory designations are governed by…
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North Carolina Business Court Enforces Arbitration Agreement Prohibiting Discovery, Live Testimony, and a Full Hearing
In a January 2016 (unpublished) order, the North Carolina Business Court (NCBC) enforced a contract provision compelling arbitration and prohibiting any discovery prior to the arbitration.[1] In Taggart v. Physicians Pharmacy Alliance, Inc., James Taggart sold his business, Physicians Pharmacy Alliance, Inc. (“PPA”), in a stock purchase agreement. The agreement contains a provision mandating arbitration as to “any claim, controversy, or other matter in question based upon, arising out of, or otherwise in respect of this Agreement.” The agreement further specifies: “[i]t is the desire and intent of the Parties that such arbitration be held without any discovery,…
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A Primer on the North Carolina Wage and Hour Act: What Every Employer and Employee Should Know
Overview The North Carolina Department of Labor is charged with promoting the “health, safety, and general well-being” of more than 4 million workers in the state. The Wage and Hour Bureau of the North Carolina Department of Labor enforces the Wage and Hour Act of North Carolina.[1] This Act and its amendments protect employees by providing requirements regarding: (1) minimum wage; (2) overtime requirements; (3) wage (including bonus and commission) payments; (4) payments of promised benefits such as vacation pay; (5) child labor; and (6) recordkeeping. The majority of all North Carolina employees are covered by the North Carolina Wage and Hour Act (NCWHA), subject to a few…
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North Carolina Court of Appeals Clarifies Reach of Clerk of Court’s Original Jurisdiction
A recent decision by the North Carolina Court of Appeals reinforced the distinction between claims over which the trial divisions have original jurisdiction and claims which are properly brought before the Clerk of Court.[1] In Morgan-McCoart v. Matchette, an elderly woman, Ms. Simpson, created a revocable trust and executed a Durable Power of Attorney in 2008. Her daughter, Julie, was named as her trustee and attorney-in-fact, and her other daughter, Claudia, was named as the alternate trustee and attorney-in-fact. Ms. Simpson was declared incompetent in 2009. Julie lived in California, making it difficult to fulfil her duties. Accordingly, Julia…
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Tenant Rights: Have You Been Constructively Evicted?
One month into Adam’s lease he starts to notice maintenance and/or safety issues with the house he is renting. After a rainstorm, Adam finds a few leaks in the ceiling. The windows in his house do not close all the way, and he was electrocuted once when turning on the garage light. He then begins to have respiratory issues and notices mold in the den and bathroom ceilings. Adam notifies his landlord of these problems and the landlord assures Adam the issues will be fixed promptly. Several maintenance professionals come to the house but do nothing significant. Days or weeks pass and, despite repeated assurance from…
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North Carolina Business Court: Employment Agreements Automatically Terminate Upon the Sale of a Company
A recent decision by the North Carolina Business Court held that an employment agreement automatically terminates upon the asset sale of one company to another, despite continued employment with the purchasing company.[1] In 2001, Andrew Lund executed an employment agreement with his then-employer, Southern Staircases of North Carolina, Inc. The agreement contained several post-employment restrictions regarding disclosing confidential information and soliciting current and future customers. The agreement also contained a duty of loyalty provision to “devote his entire working time, attention, and energies to the business of the Company and . . . [to] not be engaged in any other business…
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Fourth Circuit: Arbitration Agreement in Employee Handbook Not Binding
A recent decision by the United States Court of Appeals for the Fourth Circuit ruled that a North Carolina employee suing under federal and North Carolina law for wage and hour violations was not required to participate in arbitration despite an arbitration clause in her employee handbook.[1] The Fourth Circuit acknowledged that North Carolina law would ordinarily bind the employee via implied consent to the clause, but she signed an acknowledgement form upon receipt of the handbook that expressly stated the handbook provisions did not constitute a binding contract. Rose Lorenzo, an employee of Prime Communications, LP, managed a…
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Deceptive Conduct Likely Needed to Transform a Breach of Contract Claim to Unfair and Deceptive Trade Practice
While unfair and deceptive trade practice claims are sometimes alleged concurrently with breach of contract claims, a breach of contract alone does not constitute an unfair or deceptive trade practice. To prevail on both a breach of contract claim and an unfair and deceptive trade practice claim, North Carolina and federal courts require the breach to be accompanied by “substantial aggravating circumstances.” However, courts have provided little to no guidance on what amounts to substantial aggravating circumstances. A recent decision by the U.S. District Court for the Eastern District of North Carolina provides some insight.[1] Judge Flanagan indicated that, to be successful on both an…
