Rapid Temps, Inc. v. Lamon

2008 NMCA 122, 192 P.3d 799, 144 N.M. 804
CourtNew Mexico Court of Appeals
DecidedAugust 7, 2008
Docket26,834
StatusPublished
Cited by6 cases

This text of 2008 NMCA 122 (Rapid Temps, Inc. v. Lamon) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rapid Temps, Inc. v. Lamon, 2008 NMCA 122, 192 P.3d 799, 144 N.M. 804 (N.M. Ct. App. 2008).

Opinion

OPINION

BUSTAMANTE, Judge.

{1} This ease involves the enforcement of a covenant not to compete between Defendant Linda Lamon (Lamon) and her former employer, Plaintiff Rapid Temps, Inc. (RTI). Lamon was terminated from RTI and began working for a competing firm. RTI brought suit in the district court to enforce the covenant not to compete and for damages arising from Lamon’s alleged misappropriation of trade secrets. Following a bench trial, the district court granted RTFs requested relief. Lamon challenges the district court’s enforcement of the covenant and award of damages on a variety of grounds. We affirm in part, reverse in part, and remand for further proceedings.

FACTS AND PROCEEDINGS

{2} RTI is a staffing company based in Albuquerque and Artesia, New Mexico that provides placement services for medical professionals and medical facilities throughout the United States. RTI has developed and maintained a database of information about medical professionals and medical facilities to give RTI an advantage over its competitors. The creation and maintenance of this database has come at great expense to RTI.

{3} In the spring of 1999, Lamon responded to an advertisement for a recruiter position that RTI posted on the Internet. Over the course of several interviews, RTI representatives informed Lamon about the covenant not to compete that is part of RTFs standard employment agreement, which all RTI employees are required to sign. Lamon indicated that she did not object to the covenant not to compete, and she accepted the recruiter position at RTI. Lamon signed an employment agreement (the Agreement) on September 17,1999.

{4} Following its hiring of Lamon, RTI began to experiment with its compensation system for its employees. More specifically, RTI implemented a variety of commission-based compensation systems from 2000 to 2002. In 2001, Lamon’s commission and base salary were the highest among all recruiters at RTI.

{5} Lamon did not get along with her coworkers and was unhappy for several years while working at RTI. Beginning in 2002, the performance of Lamon’s department, Department 06, began to decline and continued to decline throughout the remainder of her employment. Lamon began to search for a new job in early 2002, while she was still employed at RTI. Lamon’s employee performance evaluations indicated that her job performance declined between 2002 and 2004.

{6} RTI terminated Lamon on June 18, 2004. Evidence produced at trial showed that Lamon, withoút permission from RTI, copied dozens of RTI computer files to her home computer with the intent of using the information to compete with RTI. Lamon began working for Defendant SysProg, Inc. (SysProg) on July 1, 2004. At that time, the President, and sole owner of SysProg was Tom Findley, who is Lamon’s brother. Lamon solicited a majority of RTI’s contacts while working for SysProg.

{7} RTI filed a complaint for damages and injunctive relief against Lamon and SysProg on September 17, 2004. RTI sought an injunction preventing Lamon and SysProg from (1) using RTFs trade secrets and confidential information, (2) violating the covenant not to compete in the Agreement, and (3) soliciting RTI’s clients based on information Lamon acquired at RTI. RTI also sought an order requiring Lamon and SysProg to deliver for destruction all materials embodying RTFs trade secrets and confidential information. RTI further requested compensatory damages for misappropriation of trade secrets, breach of confidential relationship, breach of contract, interference with contract, and unfair competition, as well as exemplary damages pursuant to NMSA 1978, § 57-3A-4(B) (1989). Finally, RTI requested costs and attorney fees.

{8} Lamon and SysProg timely filed an answer and incorporated a counterclaim against RTI by Lamon. In her counterclaim, Lamon sought compensatory and punitive damages in connection with RTI’s alleged failure to compensate Lamon adequately for the work she performed at RTI. Lamon also sought attorney fees and costs.

{9} The matter proceeded to a bench trial in June 2005. Following trial, the parties submitted proposed findings of fact and conclusions of law to the district court. The district court entered its findings of fact and conclusions of law on August 1, 2005. The district court’s findings of fact and conclusions of law are substantially the same as those submitted by RTI, which numbered in the hundreds, although the court did not adopt eleven of RTFs requested findings and conclusions. Some of the district court’s findings and conclusions internally reference one another, although the number references are incorrect.

{10} On August 5, 2005, Lamon filed a petition for Chapter 7 relief in the United States Bankruptcy Court, which resulted in an automatic stay of proceedings in the present case. The district court therefore did not enter its final judgment and order until May 18, 2006. The judgment adopts the district court’s findings and conclusions in their entirety. The judgment also awards RTI compensatory damages against Lamon and SysProg in the amount of $18,137.08, and exemplary damages against Lamon under Section 57-3A-4 in the amount of $36,274.16 for “the willful and malicious nature of her misappropriation of [RTFs] trade secrets.” The judgment further provides the injunctive relief sought by RTI in its complaint, although the district court ordered that the three-year prohibition against competition set forth in the Agreement take effect against Lamon beginning from the date of judgment instead of from the date of her termination. Finally, the judgment awards RTI attorney fees and costs.

{11} Lamon timely filed a notice of appeal. Lamon urges us to reverse the district court’s judgment on the following grounds: (1) the covenant not to compete is broader than necessary to protect RTI’s legitimate interests, and is therefore unenforceable; (2) the district court erred in awarding compensatory and punitive damages for Lamon’s alleged misappropriation of trade secrets because RTI had no trade secrets requiring protection; (3) the district court’s conclusion that Lamon misappropriated trade secrets was in error because the conclusion was based on facts the district court previously ruled inadmissible, and because the conclusion was not supported by substantial evidence; and (4) the district court erred by ordering that the three-year prohibition from competition begin to run from the date of judgment. Additionally, Lamon argues that we should apply heightened scrutiny to the district court’s decision because the district court’s findings and conclusions demonstrate that it did not exercise independent judgment in arriving at that decision.

{12} We consolidate Lamon’s claims into two main issues for review. We first examine whether the district court erred by enforcing the covenant not to compete beginning on the date of judgment. We conclude that the covenant not to compete began to run from the date of Lamon’s termination and has now expired. As a result, we do not address Lamon’s claims regarding the reasonableness of the covenant. They are now moot. We next consider whether substantial evidence supports the district court’s award of compensatory and punitive damages against Lamon for misappropriation of trade secrets. We address summarily Lamon’s assertion that the district court did not exercise independent judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
2008 NMCA 122, 192 P.3d 799, 144 N.M. 804, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rapid-temps-inc-v-lamon-nmctapp-2008.