Flo’s lawsuit against Willie and Rokfin

tikk10

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Nov 6, 2015
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As already seemed obvious, it's a suit seeking damages for Willie's alleged violation of the non-compete clause in his employment agreement. Flo claims that Willie downloaded from Flo and immediately began providing to Rokfin his same content--the examples Flo provides are Willie's rankings. Flo also cites Willie's tweet about "Who's #1" being his "from conception to execution" as an example of his alleged plan to continue misappropriating Flo's property.

The complaint also names Rokfin as a defendant and accuses it of tortious interference by inducing Willie to break his employment agreement and provide similar services to Rokfin.

I have a few thoughts because I think Flo is on shaky ground here. This isn't my area, and I don't really have an idea what a Texas court will do with it, but I do know that the trend, nationwide, is to view non-compete clauses skeptically and narrowly. Some states have banned them outright.

But before I get to non-competes, there's another issue lurking here. It's not immediately clear to me that a Texas court has jurisdiction over Rokfin (a Wisconsin company) or Willie (a Pennsylvania resident). I'm not going to go entirely down the diversity jurisdiction rabbit hole but there's an argument that a federal court is the proper venue for this dispute, not Texas, even if the federal court would be deciding Texas law. [Edit to correct mistake about Rokfin's place of business]

On to non-competes. The issue of non-compete agreements arises here in the context of an injunction request, and the standard for obtaining injunctions is distinct from the ultimate underlying legal question of whether the defendant has violated his employment agreement. Flo must show that it has a "a probable right" to enforce the agreement; and that if not enforced, Flo will suffer a "probable, imminent, and irreparable injury" "for which [they] have no adequate legal remedy." This means that even if the court finds that the agreement is probably valid, if it was possible for Flo to calculate its damages (in terms of money), the injunction won't be granted. Some Texas courts ignore this imminent injury requirement, though.

As to the underlying issue of the agreement's enforcebability, Texas law, like most states and federal law, imposes a reasonableness standard, effectively limiting non-compete clauses as to (1) Time; (2) Geographic Area; and (3) Scope of Activity.

As for Time, Texas has found 1-2 year agreements reasonable, so that aspect of the agreement is uncontroversial.

As for geographic area, the non-compete language included in the complaint is interesting. It states that for one year after termination, a Flo employee won't compete "in the region and/or cities in which I am responsible for conducting business for the Company...", which the contract defines as the "Geographic Territory." It further prohibits the terminated employee from performing "the same or similar duties" as was performed at Flo (also within the "Geographic Territory").

Since Flo employees are responsible for "conducting business" in numerous cities beyond Austin, Flo's notion of "Geographic Territory" is pretty much everywhere on earth where wrestling might occur. Reasonable? Dicey.

As to the "scope of activity" consideration, it might be significant that the basis for the dispute is Willie's *rankings.* Even if a judge was predisposed to finding the non-compete otherwise valid, they might look sideways at the idea of enforcing it to the extent of prohibiting Willie from ranking wrestlers. Rankings aren't intrinsic to Flo, it's a core activity/service in every sport and as I said above, courts are wary of enforcing non-competes too broadly. That said, rankings are copyrightable, though just barely meeting the "originality" requirement as expressed in Feist v. Rural Telephone.

I've not looked at Texas case law on any of these prongs so the above is just reasonable guesses about what a judge might do if a judge exercised minimal skepticism about non-compete clauses. A non-curious judge might just look at the complaint and see that Willie reposted "his" rankings at Rokfin and be satisfied that there's a breach.

A wildcard aspect to the non-compete analysis (perhaps it goes to 'Scope of Activity') is the size of wrestling media universe, which cuts strongly in Willie's favor. To enforce this non-compete in the manner Flo is requesting is equivalent to preventing Willie from working anywhere, because any wrestling media will be a competitor to Flo. It's a small pond, as everyone knows.

Texas business law starts from the proposition that every restraint on trade is unlawful, with certain exceptions, of which valid non-compete clauses is one. Prohibiting Willie from working in wrestling media at all for a year--which is what Flo's request amounts to--seems to go well beyond the reasonability requirement imposed on all non-compete agreements.
 
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tikk10

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Mildly annoyed that I paid for the complaint only to see it posted over at TheMat just as I was going to post it myself. I even redacted the personal addresses because it's not relevant to any of this, which I see wasn't done by whomever made it available at TheMat.
 

nerfstate

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Oct 10, 2017
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Mildly annoyed that I paid for the complaint only to see it posted over at TheMat just as I was going to post it myself. I even redacted the personal addresses because it's not relevant to any of this, which I see wasn't done by whomever made it available at TheMat.
I noticed that, right before I looked up Willie’s house on street view.:eek:

Wondered if you’d have gotten your copy yet.
 
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Chickenman Testa

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As already seemed obvious, it's a suit seeking damages for Willie's alleged violation of the non-compete clause in his employment agreement. Flo claims that Willie downloaded from Flo and immediately began providing to Rokfin his same content--the examples Flo provides are Willie's rankings. Flo also cites Willie's tweet about "Who's #1" being his "from conception to execution" as an example of his alleged plan to continue misappropriating Flo's property.

The complaint also names Rokfin as a defendant and accuses it of tortious interference by inducing Willie to break his employment agreement and provide similar services to Rokfin.

I have a few thoughts because I think Flo is on shaky ground here. This isn't my area, and I don't really have an idea what a Texas court will do with it, but I do know that the trend, nationwide, is to view non-compete clauses skeptically and narrowly. Some states have banned them outright.

But before I get to non-competes, there's another issue lurking here. It's not immediately clear to me that a Texas court has jurisdiction over Rokfin (a Wisconsin company) or Willie (a Pennsylvania resident). I'm not going to go entirely down the diversity jurisdiction rabbit hole but there's an argument that a federal court is the proper venue for this dispute, not Texas, even if the federal court would be deciding Texas law. [Edit to correct mistake about Rokfin's place of business]

On to non-competes. The issue of non-compete agreements arises here in the context of an injunction request, and the standard for obtaining injunctions is distinct from the ultimate underlying legal question of whether the defendant has violated his employment agreement. Flo must show that it has a "a probable right" to enforce the agreement; and that if not enforced, Flo will suffer a "probable, imminent, and irreparable injury" "for which [they] have no adequate legal remedy." This means that even if the court finds that the agreement is probably valid, if it was possible for Flo to calculate its damages (in terms of money), the injunction won't be granted. Some Texas courts ignore this imminent injury requirement, though.

As to the underlying issue of the agreement's enforcebability, Texas law, like most states and federal law, imposes a reasonableness standard, effectively limiting non-compete clauses as to (1) Time; (2) Geographic Area; and (3) Scope of Activity.

As for Time, Texas has found 1-2 year agreements reasonable, so that aspect of the agreement is uncontroversial.

As for geographic area, the non-compete language included in the complaint is interesting. It states that for one year after termination, a Flo employee won't compete "in the region and/or cities in which I am responsible for conducting business for the Company...", which the contract defines as the "Geographic Territory." It further prohibits the terminated employee from performing "the same or similar duties" as was performed at Flo (also within the "Geographic Territory").

Since Flo employees are responsible for "conducting business" in numerous cities beyond Austin, Flo's notion of "Geographic Territory" is pretty much everywhere on earth where wrestling might occur. Reasonable? Dicey.

As to the "scope of activity" consideration, it might be significant that the basis for the dispute is Willie's *rankings.* Even if a judge was predisposed to finding the non-compete otherwise valid, they might look sideways at the idea of enforcing it to the extent of prohibiting Willie from ranking wrestlers. Rankings aren't intrinsic to Flo, it's a core activity/service in every sport and as I said above, courts are wary of enforcing non-competes too broadly. That said, rankings are copyrightable, though just barely meeting the "originality" requirement as expressed in Feist v. Rural Telephone.

I've not looked at Texas case law on any of these prongs so the above is just reasonable guesses about what a judge might do if a judge exercised minimal skepticism about non-compete clauses. A non-curious judge might just look at the complaint and see that Willie reposted "his" rankings at Rokfin and be satisfied that there's a breach.

A wildcard aspect to the non-compete analysis (perhaps it goes to 'Scope of Activity') is the size of wrestling media universe, which cuts strongly in Willie's favor. To enforce this non-compete in the manner Flo is requesting is equivalent to preventing Willie from working anywhere, because any wrestling media will be a competitor to Flo. It's a small pond, as everyone knows.

Texas business law starts from the proposition that every restraint on trade is unlawful, with certain exceptions, of which valid non-compete clauses is one. Prohibiting Willie from working in wrestling media at all for a year--which is what Flo's request amounts to--seems to go well beyond the reasonability requirement imposed on all non-compete agreements.
Thanks Tikk. I’m a practicing attorney, but these things aren’t my bailiwick, so I appreciate the detailed analysis. I’m very interested in defendant’s answer
 

rmg78

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Feb 22, 2017
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As already seemed obvious, it's a suit seeking damages for Willie's alleged violation of the non-compete clause in his employment agreement. Flo claims that Willie downloaded from Flo and immediately began providing to Rokfin his same content--the examples Flo provides are Willie's rankings. Flo also cites Willie's tweet about "Who's #1" being his "from conception to execution" as an example of his alleged plan to continue misappropriating Flo's property.

The complaint also names Rokfin as a defendant and accuses it of tortious interference by inducing Willie to break his employment agreement and provide similar services to Rokfin.

I have a few thoughts because I think Flo is on shaky ground here. This isn't my area, and I don't really have an idea what a Texas court will do with it, but I do know that the trend, nationwide, is to view non-compete clauses skeptically and narrowly. Some states have banned them outright.

But before I get to non-competes, there's another issue lurking here. It's not immediately clear to me that a Texas court has jurisdiction over Rokfin (a Wisconsin company) or Willie (a Pennsylvania resident). I'm not going to go entirely down the diversity jurisdiction rabbit hole but there's an argument that a federal court is the proper venue for this dispute, not Texas, even if the federal court would be deciding Texas law. [Edit to correct mistake about Rokfin's place of business]

On to non-competes. The issue of non-compete agreements arises here in the context of an injunction request, and the standard for obtaining injunctions is distinct from the ultimate underlying legal question of whether the defendant has violated his employment agreement. Flo must show that it has a "a probable right" to enforce the agreement; and that if not enforced, Flo will suffer a "probable, imminent, and irreparable injury" "for which [they] have no adequate legal remedy." [3] This means that even if the court finds that the agreement is probably valid, if it was possible for Flo to calculate its damages (in terms of money), the injunction won't be granted. Some Texas courts ignore this imminent injury requirement, though.

As to the underlying issue of the agreement's enforcebability, Texas law, like most states and federal law, imposes a reasonableness standard, effectively limiting non-compete clauses as to (1) Time; (2) Geographic Area; and (3) Scope of Activity.

As for Time, Texas has found 1-2 year agreements reasonable, so that aspect of the agreement is uncontroversial.

As for geographic area, the non-compete language included in the complaint is interesting. It states that for one year after termination, a Flo employee won't compete "in the region and/or cities in which I am responsible for conducting business for the Company...", which the contract defines as the "Geographic Territory." It further prohibits the terminated employee from performing "the same or similar duties" as was performed at Flo (also within the "Geographic Territory").

Since Flo employees are responsible for "conducting business" in numerous cities beyond Austin, Flo's notion of "Geographic Territory" is pretty much everywhere on earth where wrestling might occur. Reasonable? Dicey.

As to the "scope of activity" consideration, it might be significant that the basis for the dispute is Willie's *rankings.* Even if a judge was predisposed to finding the non-compete otherwise valid, they might look sideways at the idea of enforcing it to the extent of prohibiting Willie from ranking wrestlers. Rankings aren't intrinsic to Flo, it's a core activity/service in every sport and as I said above, courts are wary of enforcing non-competes too broadly. That said, rankings are copyrightable, though just barely meeting the "originality" requirement as expressed in Feist v. Rural Telephone.

I've not looked at Texas case law on any of these prongs so the above is just reasonable guesses about what a judge might do if a judge exercised minimal skepticism about non-compete clauses. A non-curious judge might just look at the complaint and see that Willie reposted "his" rankings at Rokfin and be satisfied that there's a breach.

A wildcard aspect to the non-compete analysis (perhaps it goes to 'Scope of Activity') is the size of wrestling media universe, which cuts strongly in Willie's favor. To enforce this non-compete in the manner Flo is requesting is equivalent to preventing Willie from working anywhere, because any wrestling media will be a competitor to Flo. It's a small pond, as everyone knows.

Texas business law starts from the proposition that every restraint on trade is unlawful, with certain exceptions, of which valid non-compete clauses is one. Prohibiting Willie from working in wrestling media at all for a year--which is what Flo's request amounts to--seems to go well beyond the reasonability requirement imposed on all non-compete agreements.
Tikk, what are your thoughts on Flo's claims that Willie deleted content off their server prior to leaving? I assume he deleted his rankings and the other stuff that was immediately posted on Rofkin. Also, what do you think of the fact that his non-commercial clause was signed by Martin Flo who is now the owner of Rifkin and fellow defendant?
 

El-Jefe

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Jul 27, 2012
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As already seemed obvious, it's a suit seeking damages for Willie's alleged violation of the non-compete clause in his employment agreement. Flo claims that Willie downloaded from Flo and immediately began providing to Rokfin his same content--the examples Flo provides are Willie's rankings. Flo also cites Willie's tweet about "Who's #1" being his "from conception to execution" as an example of his alleged plan to continue misappropriating Flo's property.

The complaint also names Rokfin as a defendant and accuses it of tortious interference by inducing Willie to break his employment agreement and provide similar services to Rokfin.

I have a few thoughts because I think Flo is on shaky ground here. This isn't my area, and I don't really have an idea what a Texas court will do with it, but I do know that the trend, nationwide, is to view non-compete clauses skeptically and narrowly. Some states have banned them outright.

But before I get to non-competes, there's another issue lurking here. It's not immediately clear to me that a Texas court has jurisdiction over Rokfin (a Wisconsin company) or Willie (a Pennsylvania resident). I'm not going to go entirely down the diversity jurisdiction rabbit hole but there's an argument that a federal court is the proper venue for this dispute, not Texas, even if the federal court would be deciding Texas law. [Edit to correct mistake about Rokfin's place of business]

On to non-competes. The issue of non-compete agreements arises here in the context of an injunction request, and the standard for obtaining injunctions is distinct from the ultimate underlying legal question of whether the defendant has violated his employment agreement. Flo must show that it has a "a probable right" to enforce the agreement; and that if not enforced, Flo will suffer a "probable, imminent, and irreparable injury" "for which [they] have no adequate legal remedy." This means that even if the court finds that the agreement is probably valid, if it was possible for Flo to calculate its damages (in terms of money), the injunction won't be granted. Some Texas courts ignore this imminent injury requirement, though.

As to the underlying issue of the agreement's enforcebability, Texas law, like most states and federal law, imposes a reasonableness standard, effectively limiting non-compete clauses as to (1) Time; (2) Geographic Area; and (3) Scope of Activity.

As for Time, Texas has found 1-2 year agreements reasonable, so that aspect of the agreement is uncontroversial.

As for geographic area, the non-compete language included in the complaint is interesting. It states that for one year after termination, a Flo employee won't compete "in the region and/or cities in which I am responsible for conducting business for the Company...", which the contract defines as the "Geographic Territory." It further prohibits the terminated employee from performing "the same or similar duties" as was performed at Flo (also within the "Geographic Territory").

Since Flo employees are responsible for "conducting business" in numerous cities beyond Austin, Flo's notion of "Geographic Territory" is pretty much everywhere on earth where wrestling might occur. Reasonable? Dicey.

As to the "scope of activity" consideration, it might be significant that the basis for the dispute is Willie's *rankings.* Even if a judge was predisposed to finding the non-compete otherwise valid, they might look sideways at the idea of enforcing it to the extent of prohibiting Willie from ranking wrestlers. Rankings aren't intrinsic to Flo, it's a core activity/service in every sport and as I said above, courts are wary of enforcing non-competes too broadly. That said, rankings are copyrightable, though just barely meeting the "originality" requirement as expressed in Feist v. Rural Telephone.

I've not looked at Texas case law on any of these prongs so the above is just reasonable guesses about what a judge might do if a judge exercised minimal skepticism about non-compete clauses. A non-curious judge might just look at the complaint and see that Willie reposted "his" rankings at Rokfin and be satisfied that there's a breach.

A wildcard aspect to the non-compete analysis (perhaps it goes to 'Scope of Activity') is the size of wrestling media universe, which cuts strongly in Willie's favor. To enforce this non-compete in the manner Flo is requesting is equivalent to preventing Willie from working anywhere, because any wrestling media will be a competitor to Flo. It's a small pond, as everyone knows.

Texas business law starts from the proposition that every restraint on trade is unlawful, with certain exceptions, of which valid non-compete clauses is one. Prohibiting Willie from working in wrestling media at all for a year--which is what Flo's request amounts to--seems to go well beyond the reasonability requirement imposed on all non-compete agreements.
Would like to get your legal takes on a couple decidedly non-lawyer thoughts I have:

1. "Willie's tweet about 'Who's #1' being his 'from conception to execution' as an example of his alleged plan to continue misappropriating Flo's property." This strikes me as aggressive. I took Willie's tweet as a broader statement of his ability, not an intent to poach a single event. Besides, nothing is stopping Flo from organizing 2020 WNO right now. Flo would have the right to suspend or discontinue WNO, but that undercuts their public claims of promoting the sport and bolsters Willie's complaint of Flo's pettiness.

2. Geography: Willie moved back to Easton well before leaving Flo. Isn't Flo's argument here tantamount to saying he cannot work on wrestling from Easton? "Move or desist" seems like another way to push him out of the industry altogether for the length of his non-compete.

3. Rankings --IIRC Willie did rankings long before joining Flo. Since he brought that to Flo, does he retain any rights after leaving (aside from rankings being generic in nature)?
 

tikk10

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Tikk, what are your thoughts on Flo's claims that Willie deleted content off their server prior to leaving? I assume he deleted his rankings and the other stuff that was immediately posted on Rofkin. Also, what do you think of the fact that his non-commercial clause was signed by Martin Flo who is now the owner of Rifkin and fellow defendant?
If he actually deleted content that doesn't look great but the cause of action is violation of non-compete clause as opposed to theft of intellectual property or trade secrets, which is why I think the smarter defense is to attack the validity of the non-compete clause as opposed to conceding its validity but argue that there was no violation.

That the agreement was originally between Martin and Flo is of no matter; Texas recognizes a successor-in-interest's right to enforce same. And the agreement itself recognizes same.
 
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Callthestall

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I posted the below statement on the "Willie is out at Flo" thread and couldn't figure how to copy to this thread so I just copied it.
Numerous posters questioned me when I mentioned the potential of a non compete issue. Seems to me I was wrong about how many years but not the non compete order.

Posted in "Willie is out "Thread, November

"I know guys that are friends with Willie, and on occasion have had a few beers with Willie and the boys at Dietzi Tavern. I'm certain some more information will come out from this. Knowing Willie and his passion for the sport , I would think that he will still be in the scene in some manner.
If he is not visible or active in wrestling community I would think he had signed a non compete agreement with FLO. Hence his mention of 5 years."
 

tikk10

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Would like to get your legal takes on a couple decidedly non-lawyer thoughts I have:

1. "Willie's tweet about 'Who's #1' being his 'from conception to execution' as an example of his alleged plan to continue misappropriating Flo's property." This strikes me as aggressive. I took Willie's tweet as a broader statement of his ability, not an intent to poach a single event. Besides, nothing is stopping Flo from organizing 2020 WNO right now.

2. Geography: Willie moved back to Easton well before leaving Flo. Isn't Flo's argument here tantamount to saying he cannot work on wrestling from Easton? Which seems like another way to push him out of the industry altogether for the length of his non-compete.

3. Rankings --IIRC Willie did rankings long before joining Flo. Since he brought that to Flo, does he retain any rights after leaving (aside from rankings being generic in nature)?
Re 1, I don't think much of the mention in the complaint because the tweet is ambiguous, like you say. A judge might not appreciate it but it's not something that a judge is going to hang a decision on, I'd think.

2. I don't think that Willie's moving to Easton has much bearing on the Geographic Territory prong because to presume as much would create a loophole whereby a poaching employer could circumvent a non-compete by moving the poached employee out of state. But I don't think Austin and Easton have much to do with this case, because Rokfin and Flo aren't competing for Austin's business, they're competing for the US and worldwide wrestling fans' business. And Flo's non-compete explicitly recognizes this by broadly defining "Geographic Territory" to mean practically everywhere.

3. I think the fact that Willie did rankings prior to arriving at Flo is something his attorney would want to stress because, yeah, it really underscores the generic nature of rankings, and how they weren't something "invented" by Willie while at Flo. The idea of rankings is also temporal--this week's rankings are more meaningful than last week's. Which means that to the extent Flo could possibly claim injury by Willie taking one week of rankings, the injury could only have lasted until the next set of rankings were scheduled to come out.
 

dunkej01

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As already seemed obvious, it's a suit seeking damages for Willie's alleged violation of the non-compete clause in his employment agreement. Flo claims that Willie downloaded from Flo and immediately began providing to Rokfin his same content--the examples Flo provides are Willie's rankings. Flo also cites Willie's tweet about "Who's #1" being his "from conception to execution" as an example of his alleged plan to continue misappropriating Flo's property.

The complaint also names Rokfin as a defendant and accuses it of tortious interference by inducing Willie to break his employment agreement and provide similar services to Rokfin.

I have a few thoughts because I think Flo is on shaky ground here. This isn't my area, and I don't really have an idea what a Texas court will do with it, but I do know that the trend, nationwide, is to view non-compete clauses skeptically and narrowly. Some states have banned them outright.

But before I get to non-competes, there's another issue lurking here. It's not immediately clear to me that a Texas court has jurisdiction over Rokfin (a Wisconsin company) or Willie (a Pennsylvania resident). I'm not going to go entirely down the diversity jurisdiction rabbit hole but there's an argument that a federal court is the proper venue for this dispute, not Texas, even if the federal court would be deciding Texas law.

On to non-competes. The issue of non-compete agreements arises here in the context of an injunction request, and the standard for obtaining injunctions is distinct from the ultimate underlying legal question of whether the defendant has violated his employment agreement. Flo must show that it has a "a probable right" to enforce the agreement; and that if not enforced, Flo will suffer a "probable, imminent, and irreparable injury" "for which [they] have no adequate legal remedy." [3] This means that even if the court finds that the agreement is probably valid, if it was possible for Flo to calculate its damages (in terms of money), the injunction won't be granted. Some Texas courts ignore this imminent injury requirement, though.

As to the underlying issue of the agreement's enforcebability, Texas law, like most states and federal law, imposes a reasonableness standard, effectively limiting non-compete clauses as to (1) Time; (2) Geographic Area; and (3) Scope of Activity.

As for Time, Texas has found 1-2 year agreements reasonable, so that aspect of the agreement is uncontroversial.

As for geographic area, the non-compete language included in the complaint is interesting. It states that for one year after termination, a Flo employee won't compete "in the region and/or cities in which I am responsible for conducting business for the Company...", which the contract defines as the "Geographic Territory." It further prohibits the terminated employee from performing "the same or similar duties" as was performed at Flo (also within the "Geographic Territory").

Since Flo employees are responsible for "conducting business" in numerous cities beyond Austin, Flo's notion of "Geographic Territory" is pretty much everywhere on earth where wrestling might occur. Reasonable? Dicey.

As to the "scope of activity" consideration, it might be significant that the basis for the dispute is Willie's *rankings.* Even if a judge was predisposed to finding the non-compete otherwise valid, they might look sideways at the idea of enforcing it to the extent of prohibiting Willie from ranking wrestlers. Rankings aren't intrinsic to Flo, it's a core activity/service in every sport and as I said above, courts are wary of enforcing non-competes too broadly. That said, rankings are copyrightable, though just barely meeting the "originality" requirement as expressed in Feist v. Rural Telephone.

I've not looked at Texas case law on any of these prongs so the above is just reasonable guesses about what a judge might do if a judge exercised minimal skepticism about non-compete clauses. A non-curious judge might just look at the complaint and see that Willie reposted "his" rankings at Rokfin and be satisfied that there's a breach.

A wildcard aspect to the non-compete analysis (perhaps it goes to 'Scope of Activity') is the size of wrestling media universe, which cuts strongly in Willie's favor. To enforce this non-compete in the manner Flo is requesting is equivalent to preventing Willie from working anywhere, because any wrestling media will be a competitor to Flo. It's a small pond, as everyone knows.

Texas business law starts from the proposition that every restraint on trade is unlawful, with certain exceptions, of which valid non-compete clauses is one. Prohibiting Willie from working in wrestling media at all for a year--which is what Flo's request amounts to--seems to go well beyond the reasonability requirement imposed on all non-compete agreements.
Thanks Tikk. I’m a practicing attorney, but these things aren’t my bailiwick, so I appreciate the detailed analysis. I’m very interested in defendant’s answer

I'll save you the download fee.

Defendant answer: GFY
 

tikk10

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One unknown aspect not worth getting too far into b/c Flo doesn't really press the claim and we don't know Willie's salary is that there needs to be "consideration" (money or a thing of value) in exchange for an employee's agreement to restrict their post-termination options by the non-compete. Every agreement usually starts out with both sides agreeing that "adequate consideration" is present but a court might say, well, no, you were just paying the employee the same rate as anyone similarly situated. Not sure how that would be measured here but if you really wanted to make your non-compete bulletproof, you'd cite in the agreement what you were paying that employee beyond what you'd otherwise have paid him if the employee didn't agree to the non-compete clause.
 

PSUAllTheWay

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I deal with non-competes, etc. at work. In general they are extremely difficult to enforce, particularly if it encompasses a broad geographic area and the defendant can prove that they cannot make a living at their chosen profession if held to their non-compete. I think Willie will win that battle. The biggest risk he has is the supposed theft of Flo's content. If Flo can demonstrate he took content that belongs to them and used it on a competitors site, that could be a problem. Tortious interference is definitely not a word you want to hear if you are a business. But if a court decides Willie's non-compete is not enforceable then there is no interference by Rofkin. I'm sure Martin reviewed Willie's non-compete and decided it wasn't enforceable before bringing him on board. He's no dummy.

In general going after an employee for a non-compete is a losing proposition in most states. Flo would be better off to focus on proving that intellectual properly / content was stolen and dump the non-compete fight IMHO. It is a waste of time and cash that would be better spent fixing their gawd awful service.
 

Cali_Nittany

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Jan 5, 2016
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The PRC
I'm giggling at the Founding fathers writing laws and such and Twitter screenshots being used in a lawsuit. Ol' Thomas Jefferson probably would have been a master of the meme.

Ben Franklin was the forefather of memes.

Benjamin_Franklin_-_Join_or_Die.jpg
 

matter7172

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Good legal analysis here. I concur with both explanations. I dealt with the subject only a few times when I practiced, but agree that the geographic limitation will be vexing for Flo. I obtained injunctive relief a few times - it isn't easy, especially when the waters are murky, as they are here.
 
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tikk10

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I deal with non-competes, etc. at work. In general they are extremely difficult to enforce, particularly if it encompasses a broad geographic area and the defendant can prove that they cannot make a living at their chosen profession if held to their non-compete. I think Willie will win that battle. The biggest risk he has is the supposed theft of Flo's content. If Flo can demonstrate he took content that belongs to them and used it on a competitors site, that could be a problem. Tortious interference is definitely not a word you want to hear if you are a business. But if a court decides Willie's non-compete is not enforceable then there is no interference by Rofkin. I'm sure Martin reviewed Willie's non-compete and decided it wasn't enforceable before bringing him on board. He's no dummy.

In general going after an employee for a non-compete is a losing proposition in most states. Flo would be better off to focus on proving that intellectual properly / content was stolen and dump the non-compete fight IMHO. It is a waste of time and cash that would be better spent fixing their gawd awful service.
The problem with the theft of IP claim is that they haven't made it; they only allege the facts relating to it in support of the non-compete breach claim.

Another problem, which just dawned on me, is that having your non-compete clause claim dismissed poses a big risk inasmuch as Flo won't be able to hang it over the heads of its other employees as a calculated bluff b/c they'll all know it's toothless.
 

Needanap

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As already seemed obvious, it's a suit seeking damages for Willie's alleged violation of the non-compete clause in his employment agreement. Flo claims that Willie downloaded from Flo and immediately began providing to Rokfin his same content--the examples Flo provides are Willie's rankings. Flo also cites Willie's tweet about "Who's #1" being his "from conception to execution" as an example of his alleged plan to continue misappropriating Flo's property.

The complaint also names Rokfin as a defendant and accuses it of tortious interference by inducing Willie to break his employment agreement and provide similar services to Rokfin.

I have a few thoughts because I think Flo is on shaky ground here. This isn't my area, and I don't really have an idea what a Texas court will do with it, but I do know that the trend, nationwide, is to view non-compete clauses skeptically and narrowly. Some states have banned them outright.

But before I get to non-competes, there's another issue lurking here. It's not immediately clear to me that a Texas court has jurisdiction over Rokfin (a Wisconsin company) or Willie (a Pennsylvania resident). I'm not going to go entirely down the diversity jurisdiction rabbit hole but there's an argument that a federal court is the proper venue for this dispute, not Texas, even if the federal court would be deciding Texas law. [Edit to correct mistake about Rokfin's place of business]

On to non-competes. The issue of non-compete agreements arises here in the context of an injunction request, and the standard for obtaining injunctions is distinct from the ultimate underlying legal question of whether the defendant has violated his employment agreement. Flo must show that it has a "a probable right" to enforce the agreement; and that if not enforced, Flo will suffer a "probable, imminent, and irreparable injury" "for which [they] have no adequate legal remedy." This means that even if the court finds that the agreement is probably valid, if it was possible for Flo to calculate its damages (in terms of money), the injunction won't be granted. Some Texas courts ignore this imminent injury requirement, though.

As to the underlying issue of the agreement's enforcebability, Texas law, like most states and federal law, imposes a reasonableness standard, effectively limiting non-compete clauses as to (1) Time; (2) Geographic Area; and (3) Scope of Activity.

As for Time, Texas has found 1-2 year agreements reasonable, so that aspect of the agreement is uncontroversial.

As for geographic area, the non-compete language included in the complaint is interesting. It states that for one year after termination, a Flo employee won't compete "in the region and/or cities in which I am responsible for conducting business for the Company...", which the contract defines as the "Geographic Territory." It further prohibits the terminated employee from performing "the same or similar duties" as was performed at Flo (also within the "Geographic Territory").

Since Flo employees are responsible for "conducting business" in numerous cities beyond Austin, Flo's notion of "Geographic Territory" is pretty much everywhere on earth where wrestling might occur. Reasonable? Dicey.

As to the "scope of activity" consideration, it might be significant that the basis for the dispute is Willie's *rankings.* Even if a judge was predisposed to finding the non-compete otherwise valid, they might look sideways at the idea of enforcing it to the extent of prohibiting Willie from ranking wrestlers. Rankings aren't intrinsic to Flo, it's a core activity/service in every sport and as I said above, courts are wary of enforcing non-competes too broadly. That said, rankings are copyrightable, though just barely meeting the "originality" requirement as expressed in Feist v. Rural Telephone.

I've not looked at Texas case law on any of these prongs so the above is just reasonable guesses about what a judge might do if a judge exercised minimal skepticism about non-compete clauses. A non-curious judge might just look at the complaint and see that Willie reposted "his" rankings at Rokfin and be satisfied that there's a breach.

A wildcard aspect to the non-compete analysis (perhaps it goes to 'Scope of Activity') is the size of wrestling media universe, which cuts strongly in Willie's favor. To enforce this non-compete in the manner Flo is requesting is equivalent to preventing Willie from working anywhere, because any wrestling media will be a competitor to Flo. It's a small pond, as everyone knows.

Texas business law starts from the proposition that every restraint on trade is unlawful, with certain exceptions, of which valid non-compete clauses is one. Prohibiting Willie from working in wrestling media at all for a year--which is what Flo's request amounts to--seems to go well beyond the reasonability requirement imposed on all non-compete agreements.


Tikk- Thanks for the detailed and thoughtful explanation of Flo's lawsuit against Willie and more broadly the ability to enforce NDA's. Like many people on this board, I have found myself on both sides of the equation multiple times in my career and your explanation has helped me to fill in the blanks.

I'm curious on your take on the following claims from Flo's lawsuit and how they will be treated in this lawsuit:

a) The repeated claim that Willie was violating his NDA (and possibly other company policies) while he was still employed by Flo. As a result of including this claim in their current lawsuit against Willie is Flo able to make the same claim at a later date in a separate lawsuit?

b) The lawsuit repeatedly claims that Martin (now at Rofkin) has been actively recruiting Willie for over a year and while Willie was still at Flo. I know Martin started Flo and after several rounds of Venture funding and a decade or so of strong growth, separated from Flo (not sure of the details of his departure). Is it fair to assume that if Flo has not cited a breach of a Non Recruit or Poaching agreement between Flo and Martin that there likely is not an agreement of that type in place or that the effective term of a previous agreement has lapsed? If my assumption is correct my guess is that a secondary goal of Flo's lawsuit is to send notice that they are prepared to litigate any future recruiting efforts of Flo employees.

c) The lawsuit is charging Willie and Rofkin collectively for $1mm. Assuming the judge finds in Flo's favor and does award them the $1mm would the judge also break out what percentage each of the defendants are responsible for? If not, and assuming there is not a contract in place between Willie and Rofkin dealing with this issue, how is each defendants responsibility determined.

Thanks again for your insight.
 
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Callthestall

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I did not read all the of the above explanation on the non compete issue but can share how my business non compete policy is written.
If one time ownership (stock shares) leaves the business he or she can not pursue to do same trade or participate in retail sales for 5 years in a 50 mile radius. Milage is defined basically as the crow flies.
I would think Willie could have been hired in different position at Rofkin and legally was ok. However if Rofkin started to do practices and marketing in direct competition with FLO than Willie might be in breach. For instance, a FLO advertiser leaves FLO to go Rofkin. Willie would of known contacts info and financial commitment creating an unfair business strategy. It would be like inside stock trading.
My guess FLO will try to prove Willie used that knowledge to directly compete against them. Rofkin will argue he was hired in a different position not related to what he did at FLO.
 

Callthestall

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As fans we're only seeing the finished product of FLO and Rofkin. Behind the scenes is where I would think the conflict and potential breach took place.
 

tikk10

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I did not read all the of the above explanation on the non compete issue but can share how my business non compete policy is written.
If one time ownership (stock shares) leaves the business he or she can not pursue to do same trade or participate in retail sales for 5 years in a 50 mile radius. Milage is defined basically as the crow flies.
I would think Willie could have been hired in different position at Rofkin and legally was ok. However if Rofkin started to do practices and marketing in direct competition with FLO than Willie might be in breach. For instance, a FLO advertiser leaves FLO to go Rofkin. Willie would of known contacts info and financial commitment creating an unfair business strategy. It would be like inside stock trading.
My guess FLO will try to prove Willie used that knowledge to directly compete against them. Rofkin will argue he was hired in a different position not related to what he did at FLO.
I get what you're saying but you're inventing causes of action and facts for Flo that aren't in the complaint. They may still amend the complaint, and I wouldn't be surprised if they did, but it's not really worth gaming out until Flo makes additional allegations.
 

midniteride

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I've got his beer covered in Minnie. Wait, wait, not ALL of it.;)
We will need to see a legal description of what the term "covered" encompasses. Seems like you have left yourself wide open to years of financial liability to, what I understand is, a bottomless pit.;)
 
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Callthestall

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I get what you're saying but you're inventing causes of action and facts for Flo that aren't in the complaint. They may still amend the complaint, and I wouldn't be surprised if they did, but it's not really worth gaming out until Flo makes additional allegations.
As noted I didn't read in detail the complaint. I brought up the non compete issue back when it was announced that Willie was leaving and was just speaking in general terms.
Hopefully I'll see Willie at a Holiday tournament this year and get to talk to him.
Probably won't be able to comment about his input.
 

tikk10

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Tikk- Thanks for the detailed and thoughtful explanation of Flo's lawsuit against Willie and more broadly the ability to enforce NDA's. Like many people on this board, I have found myself on both sides of the equation multiple times in my career and your explanation has helped me to fill in the blanks.

I'm curious on your take on the following claims from Flo's lawsuit and how they will be treated in this lawsuit:

a) The repeated claim that Willie was violating his NDA (and possibly other company policies) while he was still employed by Flo. As a result of including this claim in their current lawsuit against Willie is Flo able to make the same claim at a later date in a separate lawsuit?

b) The lawsuit repeatedly claims that Martin (now at Rofkin) has been actively recruiting Willie for over a year and while Willie was still at Flo. I know Martin started Flo and after several rounds of Venture funding and a decade or so of strong growth, separated from Flo (not sure of the details of his departure). Is it fair to assume that if Flo has not cited a breach of a Non Recruit or Poaching agreement between Flo and Martin that there likely is not an agreement of that type in place or that the effective term of a previous agreement has lapsed? If my assumption is correct my guess is that a secondary goal of Flo's lawsuit is to send notice that they are prepared to litigate any future recruiting efforts of Flo employees.

c) The lawsuit is charging Willie and Rofkin collectively for $1mm. Assuming the judge finds in Flo's favor and does award them the $1mm would the judge also break out what percentage each of the defendants are responsible for? If not, and assuming there is not a contract in place between Willie and Rofkin dealing with this issue, how is each defendants responsibility determined.

Thanks again for your insight.
A) I think the allegation that Willie was competing against Flo is contained to the specific allegation that he downloaded his rankings while still at Flo and then reposted them at Rokfin, then left. That's how I read that. Since the rankings were publicly available it's not especially compelling because Willie could have left, downloaded them at home, then reposted them just as easily (unless what he took includes non-public content, I don't know but the complaint doesn't allege as much). It probably wasn't wise to delete them at Flo, if that's what he did, but the damages at play here are negligible I'd think.

B) I imagine there is or was some agreement btwn new-Flo and Martin related to competition but it's not cited so perhaps that either means it expired; it clearly didn't cover these facts; never existed; or Flo's counsel neglected or chose not to take that angle for reasons way outside our scope. So instead they're merely alleging common law tortious interference. The complaint doesn't include many facts that support tortious interference but maybe there would be if this got to the discovery phase.

C) I don't know how damages work in Texas but there are only two causes of action, one attributable entirely to Willie, one entirely to Martin/Rokfin, so a judge could theoretically find Willie 100% liable for breach and Martin 0% liable for tortious interference. No one involved here believes $1m is a real number, plaintiff's lawyers just use them to get headlines and judges are numb so it's become routine. If this complaint was seriously expecting $1m in damages far more legal work would've gone into the complaint.
 

98lberEating2Lunches

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Regarding potential IP contentions, is there any significance to the non compete agreement lacking a complete invention disclosure?

I noticed no initialed lines relative to prior inventions, and--although signed--it was undated.

Just maybe Willie did come up with WNO before joining Flo.
 

tikk10

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Regarding potential IP contentions, is there any significance to the non compete agreement lacking a complete invention disclosure?

I noticed no initialed lines relative to prior inventions, and--although signed--it was undated.

Just maybe Willie did come up with WNO before joining Flo.
The inventions disclosure form is, I believe, part of the entire employment agreement, and the only reason it was included. That Willie did rankings prior to becoming employed at Flo is moot to this end because rankings aren't "inventions" by any possible definition, I'd think.
 
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tikk10

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Considering about 50% of the messages on this board have spelled rokfin incorrectly, can we all agree that they have chosen their name poorly?
I actually did a search and replace on my first post here before posting and had to correct numerous instances of "Rofkin" and even one "Rockfin." If I was Martin I'd buy those domain names and redirect them to the right one.
 
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jrd23psu

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How do you claim that rankings are IP? Those rankings that Willie did are simply his opinion. I am no lawyer but how can a company own the rights to the opinion of a person? I don't even like Willie but I see no reason why he can't take his opinion on who is the best at each weight class to another outlet. That seems insane to me. I also hate non-compete clauses.