You're Gonna Pay for My Lawyer!

In a recent case by the United States Court of Appeals Sixth Circuit (which covers Ohio), the court basically broadened the interpretation of attorneys fees language in non-compete agreements. When an employee of Kelly Services left to join a competitor, Kelly Services sued, claiming breach of the non-competition agreement previously signed by the employee.

There was a provision in the agreement which read “If I break this Agreement, Kelly [Services] is entitled to recover … damages from me … I will pay Kelly’s reasonable attorney’s fees and costs involved in enforcing this Agreement.”

Typically, such agreements provide for the payment of fees and costs only if the employer prevailed. The Sixth Circuit ruled that prevailing, under this language, was not necessary. Further, the Sixth Circuit was not troubled by the disparity that existed between the parties: a large corporation vs. an individual.

Using this as precedent, all businesses should review their contracts to ascertain potential exposure (or recovery) of these expenses.

Kelly Services, Inc. v. Dale De Steno, et al., 6th Cir. Case No. 18-1118 (Jan. 10, 2019).