734-359-7018
Now Accepting New Clients!
Blog

LITIGATION 3: Defendant filed a counter claim to protect customer base.

In this case, plaintiff was to work full-time for Company R, and was to be paid 50 percent of the gross profits on the sales he generated. The employment agreement established a financial goal of total gross profits of $750,000 as the point at which the agreement would automatically terminate.

In September 2015, plaintiff provided a letter to defendant giving written notice expressing his intent to leave Company R and noting that he was fast approaching the $750,000 goal. He communicated his plan to continue working in a similar capacity with his current customer and vendor base under a newly formed company. Plaintiff advised defendant that he would complete all work in progress, even after transitioning to his new company. The parties began discussions on the terms of an accelerated separation process. During these discussions the parties agreed that the preliminary amount of received gross profits was $705,000 and an additional $30,000 was in process through invoice orders and work in progress. They discussed an arrangement where the remaining $15,000 would be offset against the amounts which would become payable to plaintiff from Company R as commissions.

However, prior to any formal modification of the written agreement, defendant sent plaintiff an email stating that plaintiff’s plans were in violation of their employment agreement. From that point forward the relationship between plaintiff and defendants became contentious. Defendant locked plaintiff out of all computer systems. This restriction made it impossible for plaintiff to directly access customer files or issue computer based purchase orders.  Company R ultimately received $751,000 in gross profits arising from plaintiffs’ work on.

In October 2015, plaintiff began operating under his new company and filed an action for declaratory relief seeking to have the parties’ respective rights under the employment agreement clarified. Defendant filed a counter claim for damages and injunctive relief to protect Company R’s customer base.

The trial court issued an opinion and order that held that while plaintiff did breach the employment agreement by engaging in business activities prior to reaching the goal, defendants failed to establish that they suffered any damages arising from the breach. The court declined to award monetary damages because defendants had in fact received the contractual benefit of the total gross profits of $750,000. However, the court issued an injunction pursuant to the employment agreement, ordering plaintiff to honor his contractual obligations to refrain from soliciting business from customers on defendants’ protected list.

Aldrich Legal Services lawyers serve clients throughout southeast Michigan who are business owners. They will use their knowledge of business law, real estate law and risk management to help you avoid any potential pitfalls.

Contact Aldrich Legal Services

What You Need to Know About Distracted Driving

A great U.S. freedom is the ability to drive the open roads. However, every year there are more than 20,000 car accidents in Michigan. Many of these accidents come from distracted driving and could have been avoided. Distracted driving is such a...

Reasons Your Will or Trust Could be Contested

Everyone reacts in their own way when a family member passes away. Emotions can run high, and people can react more strongly than they normally would. Some family members may feel cheated by what a will or trust grants them leading them to contest...

Penalties For Driving Without Insurance in Michigan

Getting into a car and going for a drive isn’t perfectly safe. Driving on the Michigan roads can be dangerous. Driving those same roads becomes financially dangerous if you drive without car insurance. Between fees, charges, and possible...

PROBATE 36: Undue influence to execute Lady Bird deed.

This probate dispute between siblings arises out of the death of their father. Their father lived alone. In 2013, however, he asked appellee to live with him. She agreed, moving into the home in August 2013. Appellants allege that in the years...

Top 5 Most Common Traffic Violations in Michigan

Staying safe on the roads is in everyone’s best interest. However, keeping yourself or others out of danger is everyone’s responsibility. Getting a traffic ticket ends up costing drivers big time. Traffic tickets and citations cost money...

A Cheap Divorce is Not Worth It

Money is an important factor whenever you work with a professional. When you go through a divorce, your money and time can get even tighter. Hiring a cheap lawyer to handle your case could be attractive. However, they will end up letting you down....

Don't let a bad decision, unfair contract, or a messy divorce get in the way of a promising future!
Contact the experienced team at Aldrich Legal Services today to schedule your free initial
consultation
and secure reliable and trustworthy representation today!
Get the Help You Need From a Team You Can Truly Count On: (734) 404-3000
734-237-6482
734-366-4405