Labor Law

Tim O’Reilly

A former employee, in direct competition with his former employer, began a new company and solicited clients from his former company using client contact information that he had withheld in a safety deposit box. The former employee also acted as an independent contractor for a third party company but did not share that client contact information with the third party company. With respect to the third party company, the court entered summary judgment holding:  (1) client contact information was not a “trade secret” within the meaning of the statute, (2) there was no basis for claims for tortious interference with business relations and civil conspiracy, and (3) the trial court did not abuse its discretion by denying the former employer’s motion for reconsideration of summary judgment and motion for a new trial. Central Trust and Investment Co. v. Troy Kennedy, et al, No. 31658 (Mo. App. S.D., January 24, 2013), Francis, Jr., J.

The Circuit Court of Greene County Missouri, the Honorable Michael Cordonnier, entered summary judgment against Appellant Central Trust and Investment Company (“Central Trust”) and in favor of Respondent SignalPoint Asset Management, LLC (“SignalPoint”) on Central Trust’s First Amended Petition for Damages and Injunctive Relief. Central Trust also appeals the trial court’s denial of its motion for reconsideration of summary judgment and for a new trial based upon newly discovered evidence. The trial court entered judgment in favor of SignalPoint.

Troy Kennedy (“Kennedy”) was employed with Springfield Trustshares & Investment Company (“STC”). During his employment, Kennedy signed an employment contract with a non-compete provision with STC which was to last from January 1, 2009 to December 13, 2013 and also signed an “Oath of Director” which had a confidentiality provision. Also in the agreement was a provision stating that the non-compete shall become void and unenforceable upon the sale of STC. STC was purchased by Central Trust and Kennedy’s employment ended on the same day. Kennedy began ITI Financial Management, LLC (“ITI”) the following day and began soliciting clients from Central Trust. ITI became associated with SignalPoint. Kennedy was considered an independent contractor for SignalPoint and SignalPoint would serve as his registered investment advisor. Kennedy never provided any of STC or Central Trust’s client lists to SignalPoint. Central Trust filed suit against Kennedy, ITI, and SignalPoint claiming misappropriation of trade secrets, tortious interference with business relations, and civil conspiracy. SignalPoint moved for summary judgment on all counts. The trial court granted summary judgment as to SignalPoint only and issued an order determining that STC’s client lists were not trade secrets under the Missouri Uniform Trade Secrets Act. Central Trust also filed a motion for reconsideration of the entry of summary judgment asserting that new evidence had been found, including a cell phone and consumer contact lists, in a safety deposit box prior to Kennedy’s departure from STC. The motion was denied.

Held:  Affirmed
. Upon review of the claim for misappropriation of trade secrets, the court of appeals determined that client lists and databases are not specifically listed in the definition of trade secrets and, under the facts before this court, such items could not be considered a trade secret under the six factor test set forth in § 417.453.4, RSMo 2000. The court further stated that customer contact information could only be protectable by a non-compete agreement, and in the present matter, Kennedy’s non-compete agreement was voided by the sale of STC to Central Trust in 2009. Next the appellate court analyzed the claims for tortious interference with business relations and civil conspiracy. The court found no error, stating that since the client information was not a trade secret, there were no genuine issues of material fact to form the basis for these claims. Finally, the court of appeals held that the trial court did not abuse its discretion when denying Appellant's motion for reconsideration and motion for a new trial based on the newly discovered safety deposit box evidence. The court declared that the record clearly indicated that this evidence was readily available prior to Central Trust before trial through the deposition of Kennedy wherein he disclosed such facts. Accordingly, Central Trust could not claim that such evidence was newly discovered since the entry of judgment. Accordingly, the judgment of the trial court was upheld.

Where an employee sued his school district claiming age discrimination, nepotism, and violation of the Teacher Tenure Act (“TTA”), the court ultimately held: (1) no age discrimination existed because the employee was hired at age 58 and removed at age 60 and admitted to having challenges with technology; (2) nepotism failed as a matter of law since the newly appointed teacher in his stead was voted in by five non-related school board members; and (3) the employee could not claim tenured status under the TTA because he had not taught in the same district for five consecutive years. Ultimately, the court of appeals affirmed the grant of summary judgment by the trial court. James O. Hilfiker v. Gideon School Dist. No. 37, No. 31679 (Mo. App. S.D., November 14, 2012), Scott, J.

The Circuit Court of Butler County Missouri, the Honorable Michael M. Pritchett, entered summary judgment against Appellant James O. Hilfiker (“Hilfiker”) and in favor of Respondent Gideon School District No. 37 (“District”) on claims of nepotism, age discrimination, and Teacher Tenure Act (“TTA”) violations.

Hilfiker was sporadically employed by District to teach social studies seven school years total over four decades: 1970-72, 1974-76, 1994-95 and 2007-09. During the 2007-08 term, coming off of a twelve year absence, the principal repeatedly met with Hilfiker about performance concerns, including but not limited to, technology use. These concerns remained uncorrected through the 2008-09 school year and ultimately, the school board voted not to renew his contract. Hilfiker, at age 60, was replaced by a 24-year-old who had been an assistant volleyball coach for four years whose father was a school board member. Hilfiker claims permanent (tenured) status under the TTA which defines a permanent teacher as someone who has taught in the same school district for more than five successive years. The trial court granted summary judgment in favor of the District on all counts.

Held: Affirmed.
The court of appeals disagreed with Hilfiker’s assertion that he was a permanent teacher under the TTA. The court opined that “successive” means not just “following in order,” but “consecutive” or “following each other without interruption,” neither of which fits Hilfiker’s situation. Further, the court noted that Hilfiker had been described as a “probationary” teacher within his contract, so such an assertion was wholly unsupported. With regard to Hilfiker’s claims of nepotism, the court held that there was no violaion of procedure by the Board members as the newly hired teacher’s father abstained from the vote and five board members, unrelated to her, ultimately made the decision. Therefore, the claim for nepotism fails as a matter of law. Finally, when giving Hilfiker all reasonable inferences in his favor, the court found that his age was not a contributing factor to his removal and denied his claim for age discrimination. It stated that Hilfiker’s admitted technology challenges and the fact that the District had just recently hired him at age 58 evidenced that he was not age-prejudiced when he was removed just two years later. The court ultimately concluded, “Although seldom appropriate in employment discrimination cases, summary judgment is warranted here. We affirm the judgment.”

A hearing impaired student who had already completed one semester of a nursing program was discharged from the program because the Hospital believed that her impairment did not meet the definition of disability within the Missouri Human Rights Act (“MHRA”) and need for accommodation posed a direct threat to the health and safety of herself and others, including patients. The appellate court reversed and remanded the case to the trial court, holding that genuine issues of material fact exist as to whether she was disabled within the meaning of the MHRA and whether her accommodations posed a direct threat. Jessica L. Wells v. Lester E. Cox Medical Centers d/b/a CoxHealth, No. 31752 (Mo. App. S.D., October 9, 2012), Burrell, J.

The Circuit Court of Greene County Missouri, the Honorable Michael J. Cordonnier, entered summary judgment against Appellant Jessica L. Wells (“Wells”) and in favor of Respondent Lester E. Cox Medical Center’s Cox College of Nursing and Health Sciences (“College”) on her claim under the Missouri Human Rights Act (“MHRA”) that she was improperly terminated from College’s nursing program.

Wells has a hearing deficit which continues to deteriorate. She was enrolled in College’s general education program during the fall of 2006 to the spring of 2007 wherein she was provided with accommodations to compensate for her hearing loss including note takers, tape recordings of classrooms sessions, and American Sign Language (“ASL”) interpreters. Wells was denied admission to the College’s Associate of Science in Nursing (“ASN”) program in the fall of 2006 due to her grades, but was eventually admitted in the fall of 2007. She began the program and used the aforementioned accommodations offered by College while she completed the first semester of the ASN program. Before the second semester began, College dismissed Wells, stating that her hearing loss would substantially limit (and in some cases completely limit) her ability to safely perform clinical rotations. Wells sued claiming violation of the MHRA. In its Answer, College asserted the affirmative defense that Wells’ requests for interpreters posed a direct threat to the health or safety of herself and others, including hospital patients and requested summary judgment. College also asserted that Wells could not prove as a matter of law that she satisfied the MHRA definition of disability. The trial court granted College’s motion for summary judgment and Wells appealed.

Held:  Reversed and remanded.
In her first point on appeal, Wells argued that the trial court committed reversible error because College failed to establish that she could not participate in College’s ASN program with or without reasonable accommodation. The court of appeals agreed, holding, “The undisputed, historical facts are that with the assistance of note takers, adapted equipment, and ASL interpreters, [Wells] utilized College’s public accommodation by participating in and completing one semester of its ASN program and that her past success proves her ability to utilize the ASN program in its current form with reasonable accommodation. The court refused College’s ‘beliefs’ about future events and instead limited the analysis to the existing facts.” The court then addressed College’s direct threat defense. The court held, “College offered nothing more than its subjective belief that the use of an ASL interpreter in the clinical setting posed a direct safety threat.”  The court further stated that when taking the reasonable inferences in the light most favorable to Wells, her successful completion of the first semester while using an ASL interpreter proved the absence of any such threat. Accordingly, as genuine issues of material fact were in existence, the court reversed and remanded the case to the trial court.

When an employee claiming violation of the Missouri Human Rights Act (“MHRA”) sought to amend her petition to add counts of breach of the implied covenant of good faith and fair dealing and a declaratory judgment under the Missouri Administrative Practices Act (“MAPA”) but was denied, she filed a second lawsuit pleading the aforementioned causes of action. The trial court dismissed the second lawsuit stating that it failed to state a claim and for abatement. The court of appeals upheld the dismissal for failing to state a claim. Mary Ann Jennings v. The Board of Curators of Missouri State University, No. 31900 (Mo. App. S.D., August 27, 2012), Scott, J.

The Circuit Court of Greene County Missouri, the Honorable Dan Imhof, dismissed Mary Ann Jennings’ (“Jennings”) petition for failure to state a claim and because another action was pending between the same parties for the same cause in Missouri thereby ruling in favor of The Board of Curators of Missouri State University (“MSU”).

Jennings, a tenured faculty member at MSU, initially sued MSU for age discrimination and retaliation (“Jennings I”). She later sought leave to amend the petition adding counts for (1) breach of implied covenant of good faith and fair dealing, and (2) a declaratory judgment and other relief per Missouri’s Administrative Procedure Act (“MAPA”). The trial court denied Jennings’ request to add the counts, therefore, she filed a second lawsuit in the same court with her new claims (“Jennings II”). MSU moved to dismiss Jennings II for failure to state a claim (Rule 55.27(a)(6)) and because another action was pending between the parties for the same cause in Missouri (Rule 55.27(a)(9)).

Held:  Affirmed.

The court of appeals first addressed whether Jennings’ claim for breach of the covenant of good faith and fair dealing failed to state a claim upon which relief could be granted. The court held that Jennings’ petition failed to assert more than mere conclusions without supporting facts and failed to show that MSU used express contract terms in bad faith to deny Jennings an expected contract benefit or evade the spirit of the transaction. The court relied heavily on the fact that Jennings charged MSU with “not complying the Faculty Handbook concerning reassignment and the Faculty grievance process” without specificity in a conclusory fashion and wholly failed to allege express contract terms that MSU allegedly misused in bad faith. The appellate court next addressed Jennings’ request for declaratory judgment under the MAPA, however, the court noted that institutions such as MSU were “out from under the MAPA for all purposes and cases.”  Ultimately, the court noted that it did not need to develop any further views on this claim since, even if the MAPA did apply, circuit court review thereunder does not include the power of equity or of declaratory judgment. The court did not address the Rule 55.27(a)(9) as the case was disposed by Rule 55.27(a)(6) and further analysis was unnecessary. The appellate court affirmed the dismissal of Jennings II by the trial court.

Dissent. In a well-reasoned dissenting opinion, Judge Nancy Steffen Rahmeyer, while granting Jennings all reasonable inferences as is the standard of review, noted that Jennings was employed as an associate professor with tenure. According to the court, the liberal inference therefrom is that due to her tenured status she has an employment contract with MSU and that MSU has promised to expressly and impliedly follow the Faculty Handbook and act in good faith. Judge Rahmeyer further stated, “On the basis of the petition, we cannot ascertain that there was no contract. As such, I would find Plaintiff has adequately pled a claim that MSU breached the implied covenant of good faith and fair dealing in her contract.”  Judge Rahmeyer next addressed the dismissal under the alternative ground of abatement. She held that the subject matter in the Jennings II - breach of the implied covenant of good faith and fair dealing contained within a contract and a claim for an injunction against MSU - was totally unique to the claims of Jennings I – violating the MHRA. The biggest difference was that there is no requirement of a contract for breach of the MHRA. Accordingly, Judge Rahmeyer opined that Jennings had adequately set forth claims in her petition for a cause of action for judicial review and found that the trial court had erred in dismissing Jennings II for abatement or failure to state a claim.