Charles T. Creech, Inc. v. Brown

433 S.W.3d 345, 2014 WL 2778559, 2014 Ky. LEXIS 233, 98 Empl. Prac. Dec. (CCH) 45,096
CourtKentucky Supreme Court
DecidedJune 19, 2014
DocketNos. 2012-SC-000651-DG, 2012-SC-000693-DG
StatusPublished
Cited by7 cases

This text of 433 S.W.3d 345 (Charles T. Creech, Inc. v. Brown) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charles T. Creech, Inc. v. Brown, 433 S.W.3d 345, 2014 WL 2778559, 2014 Ky. LEXIS 233, 98 Empl. Prac. Dec. (CCH) 45,096 (Ky. 2014).

Opinions

Opinion of the Court by

Justice KELLER.

Standlee Hay Company, Inc. (Standlee), Donald E. Brown (Brown), and Charles T. Creech, Inc. (Creech) filed separate appeals from an opinion by the Court of Appeals reversing the trial court’s summary judgment in favor of Brown and Standlee. Because the issues raised on appeal arise from the same facts, we address both appeals herein. Having reviewed the record and the arguments of the parties as well as the arguments by amici curiae — Greater Louisville Building and Construction Trades Council; International Brotherhood of Electrical Workers, [347]*347Local 369; Kentucky AFL-CIO; Kentucky Jobs with Justice; Teamsters Local 783; United Auto Workers; and United Steelworkers of America (collectively the Unions)-we reverse the Court of Appeals.

I. FACTS.

The parties have conducted little, if any, discovery in this matter; therefore, we take our facts, most of which are not in dispute, from the parties’ pleadings and the attachments to those pleadings.

Creech is engaged in the business of providing hay and straw to farms throughout Kentucky.1 Brown worked for Creech for eighteen years as a driver, dispatcher, and salesperson. In the summer of 2006, the daughter of Charles Creech, Creech’s President, circulated a “Conflicts of Interests” agreement (the Agreement) for signature by Creech’s employees. On July 20, 2006, Charles Creech asked Brown to sign the Agreement, which Brown did. We note that Brown states that, when Charles Creech presented him with the Agreement, he said that Brown needed to sign it in order to “get [Creech’s] daughter off our backs.” Creech stated that Brown signed the Agreement in consideration for his continued employment. The Agreement provided in pertinent part as follows:

All proprietary information will be held in strict confidence. As an employee of Creech, Inc. you will have access to sensitive company, customer and supplier information. Such information has been obtained through the over 25 years that the company has been in business and is, therefore, the property of Creech, Inc. If at any time, either during employment or after leaving the company, you share such information with competitors of [sic] other third parties, Creech, Inc. reserves the right to pursue all legal avenues to recoup damages as well as legal fees accrued in such legal action from the employee or former employee. The industries that Creech, Inc. operates within are highly competitive. We require that all employees agree and understand that after leaving the company they are not permitted to work for any other company that directly or indirectly competes with the company for 3 years after leaving Creech, Inc. without the companies [sic] consent.
Failure to comply with this policy during employment may result in immediate termination. In the event an employee or former employee violates this policy, the company will prosecute to the fullest extent of the law, including the recoup of legal expenses incurred during such prosecution, if it deems that its interests were not protected or appropriately respected by any of its employees.
I, Donnie Brown, understand and agree to abide by the above agreement, and if I know of any non-compliance with the agreement, I will report it to management in a timely fashion.

Brown signed the Agreement but no one from or on behalf of Creech signed the Agreement. No one from Creech told Brown that his continued employment was contingent on his signing the Agreement, and he did not receive any monetary consideration for signing the Agreement.2

Shortly after Brown signed the Agreement, Creech transferred him from his job as salesperson to the job of dispatcher. [348]*348This job change did not involve any change in salary but did result in Brown having decreased responsibilities and little to no direct customer contact.

In mid-November 2008,3 Brown resigned from Creech to take a job with Standlee, a producer and seller of hay and straw. According to Brown, before taking the job with Standlee, he met with Charles Creech and explained that the Standlee job would include selling Standlee’s products to farm managers and others in Kentucky and surrounding states. Charles Creech agreed that he had a conversation with Brown about the Standlee job. However, Charles Creech stated that Brown said that he would only be selling Standlee products to “big box stores,” a market in which Creech does not participate.

On November 13, 2008, counsel for Creech sent correspondence to Brown reminding him of the Agreement that he “signed when [he] became an employee of Charles T. Creech, Inc.” Counsel indicated that, based on representations Brown made to Charles Creech, Creech was willing to waive the Agreement “only insofar as it prevents you from being employed by Standlee.” Creech was not willing to waive any other provisions of the Agreement. Specifically, Creech demanded that Brown not use “any proprietary information gained during [his] employment with ... Creech to benefit the business pursuits of Standlee.” This prohibition included any disclosure of Creech’s “client information, supplier information, business models, finances, business plans, or any other company records or company information” obtained by Brown during his employment with Creech.

On November 17, 2008, counsel for Standlee sent correspondence to counsel for Creech indicating that Standlee wanted to “make sure there are no misunderstandings about what [Standlee] expect[ed] from Mr. Brown.” By way of explanation, counsel for Standlee stated that Standlee intended “to set up a new LLC in Kentucky to deal with that end of their operations and that Mr. Brown [would] be an employee of this new LLC.” Brown would “act as a salesman ... contacting any and all of the horse farms in Kentucky and the surrounding states, in an effort to sell Stand-lee Hay products to those potential customers.” While Brown “may well contact people who [had] previously been customers of’ Creech, he would not “focus on any customer due to the fact that they may have been customers of’ Creech. It was Standlee’s intent “to give Mr. Brown the list of horse farms in Kentucky, and the surrounding states, and to then send him out to contact these farms.” As to proprietary information, counsel assured Creech that Standlee had its own practices and policies and had no interest in any such information Brown might have. Finally, counsel asked for “your thoughts on these matters after you have reviewed this letter.” When no response to that letter was forthcoming, Standlee hired Brown, and Brown began selling Standlee hay and straw in Kentucky.

According to Charles Creech and a Creech employee, in January 2009 they heard from several of Creech’s customers that Brown had contacted them on behalf of or sold them hay from Standlee. Charles Creech also stated that Standlee had “stolen” two of Creech’s warehouse employees and that Brown had contacted one of Creech’s suppliers. Brown offered Affidavits disputing some of the conten[349]*349tions made by Charles Creech in his Affidavit. In particular, the supplier stated that he contacted Brown and one of the former Creech employees stated that he contacted Standlee after he had been fired by Creech. The other former employee stated that he demanded a raise and when Creech refused to give him one, he quit, and he then contacted Brown.

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Bluebook (online)
433 S.W.3d 345, 2014 WL 2778559, 2014 Ky. LEXIS 233, 98 Empl. Prac. Dec. (CCH) 45,096, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charles-t-creech-inc-v-brown-ky-2014.