SUMMARY JUDGMENT VICTORY FOR EX-EMPLOYEE IN NON-COMPETITION CONTRACT LITIGATION AFFIRMED BY KANSAS COURT OF APPEALS On May 23, 2003, TWG obtained summary judgment on behalf of its client, Kimberly A. Ristow, in a lawsuit brought by Allen, Gibbs & Houlik, LC (“AGH”), her former employer, in Sedgwick County District Court. It was alleged that by accepting employment with NestEgg Consulting, Inc., a subsidiary of Intrust Financial Corporation, Kim Ristow violated an employment agreement which included a non-competition clause. AGH subsequently appealed the district court’s ruling; TWG, however, was successful in having Kim Ristow’s district court victory affirmed on July 30, 2004. Eric Metz of the firm, with assistance on the brief from Jerald Rogers, convinced the Kansas Court of Appeals that the interests sought to be protected by the non-competition clause were not legitimate protectable business interests, and that the training received by Kim while an employee of AGH was not the type of training that would support enforcement of the non-competition clause. The employment contract attempted to prohibit Kim Ristow from working for clients of AGH, or “centers of influence” of AGH, for a period of 6 months after her employment with AGH ended. The employment contract also attempted to prohibit Kim Ristow from soliciting, contacting, or “otherwise causing” AGH’s clients to become clients of any other business in which Kim Ristow became employed for a period of two years. Kim Ristow worked in the employment benefits area of AGH, last supervising employees who provided daily administration of these benefit plans. She accepted a job offer from NestEgg, which indirectly provides similar services. While Kim Ristow indicated she would not solicit AGH clients while working for NestEgg (and the district court found she had not solicited such clients), AGH nevertheless objected, and contended that Kim breached the contract by going to work for NestEgg. TWG successfully argued to the district court, and later, the Court of Appeals, that AGH could not prevent Kim Ristow from working for NestEgg. Specifically, TWG convinced the Court that the limited training received by Kim Ristow was not a valid business purpose that would support the clause prohibiting Kim Ristow’s employment by NestEgg. A link to the full text of this case is provided below: http://www.kscourts.org/kscases/ctapp/2004/20040730/90879.htm Why This Is Important: Non-competition covenants may be enforceable in Kansas if carefully and appropriately worded. Drafting mistakes, however, can be fatal. TWG provides employers services in drafting and, if necessary, enforcing non-competition covenants. In addition, TWG is experienced in defending employees from invalid non-competition covenants attempted to be enforced by former employers. Please contact Eric Metz or Jerald Rogers if you have any questions in this area. KANSAS SUPREME COURT VICTORY CREATES NEW LAW IN FAVOR OF CONTRACTORS BIDDING ON PUBLIC WORKS PROJECTS In an opinion handed down May 2, 2003, in the case of Ritchie Paving, Inc. v. City of Deerfield, TWG was successful in convincing the Kansas Supreme Court to create new law allowing an unsuccessful lowest responsible bidder to recover its bid preparation expenses where the bidder had relied to its detriment on incomplete or inaccurate bidding documents. This lawsuit was originally brought by TWG’s client, Ritchie Paving, Inc. (“Ritchie”), to recover expenses it incurred in preparing a bid for the City of Deerfield’s (“Deerfield”) paving project. Ritchie was the low bidder on the project; while certain requirements of the project were disclosed in the bidding documents prepared by Deerfield, Deerfield refused to award Ritchie the contract based on additional requirements which were not disclosed in the bidding documents. Ritchie argued to the District Court that had these additional requirements been disclosed to Ritchie prior to Ritchie submitting its bid, Ritchie would not have gone to the time and expense of preparing and submitting a bid. Deerfield filed a motion to dismiss Ritchie’s claims, arguing that Kansas law did not recognize a cause of action for recovery of bidding expenses under such circumstances. The Kearney County District Court granted Deerfield’s motion to dismiss, and Ritchie appealed the District Court’s decision. The Kansas Supreme Court reversed the Kearney County District Court’s decision. Specifically, the Kansas Supreme Court held that an unsuccessful lowest responsible bidder may bring a cause of action against a public entity for bid preparation costs where the public entity has failed to disclose all material bidding requirements in its bid documentation and the lowest bidder relies on the entity’s incomplete or inaccurate disclosures. A link to the full text of this case, successfully briefed and argued by TWG attorneys John Woolf and Jerald Rogers, is provided below: http://www.kscourts.org/kscases/supct/2003/20030502/88675.htm Why This Is Important: The Kansas Supreme Court’s decision in this case has effectively created new law in Kansas, allowing contractors to recover their bidding expenses under certain circumstances. Where a public bid is let pursuant to competitive bidding principles, and the lowest responsible bidder would not have submitted a bid but for inaccurate or incomplete information contained in the public entity’s bidding documents, an unsuccessful lowest responsible bidder may now recover those costs associated with preparing its bid. The impact of the Kansas Supreme Court’s ruling in this case has already caused public entities to confirm the completeness and accuracy of their bidding documents and bidding requirements. If you have questions regarding public contracting or bidding, contact John Woolf of the Firm.