It’s Business, And It’s Personal

What’s in a name? A lot if it triggers a contract dispute

On Behalf of | Feb 9, 2015 | Business Contracts & Disputes |

Most everyone has probably heard of employment agreements that include a noncompete clause. They are intended to serve the legitimate purpose of protecting a company’s proprietary information; its trade secrets if you will.

But like all contracts, they are only as strong as the language used to construct them. If it turns out that there is a dichotomy of opinion on the words or something else, it can lead to some serious disputes and put all sides of the issue on a track toward costly litigation.

Such fights typically involve a lot of money already, so for the sake of protecting assets, you want enforceable noncompete agreements. That usually hinges on the contracts being reasonable.

Apparently that was not found to be the situation in the dispute between Matt McCall and Richard Childress Racing. They were due to go face off in North Carolina Superior Court this week over RCR’s claims that McCall had violated his noncompete agreement by taking a post with Chip Ganassi Racing after the end of last season. Instead, reports late last month noted that the two sides settled their differences. And while no one is doing any chest thumping, it seems McCall got the checkered flag.

According to NBC Sports, McCall had been working as an engineer for RCR but doing a lot of crew chief tasks. He resigned and was quickly hired as a crew chief for Ganassi. RCR claimed McCall’s move violated his noncompete agreement. It said that even though McCall didn’t bear the title of crew chief, his duties were identical or similar to those that he would be doing at Ganassi.

McCall observed in his court papers that not only did he not have the chief title at RCR, but also his pay with Ganassi would be three times higher than it had been at RCR.

North Carolina’s Business Court ruled against RCR in a decision in December and that seems to have spurred the sides to settle. Under the terms, McCall goes to Ganassi, but other details are confidential.