Group C Case Analysis, Module 3

Facts:

1. TDI Technical is a competitor of Southwest. The proximity of TDI to Southwest is uncertain. 2. On June 26, 1999 Youngblood signed an employment contract with Southwest to work as a recruiter making $29.50 per hour. 3. The employment contract contained a non-competition agreement preventing Youngblood from working for a competitor of Southwest for one year within a 100-mile radius following termination of employment with Southwest. 4. Youngblood quit his prior job before signing the non-compete agreement. 5. Youngblood worked for Southwest until April 5, 2003 when he began work for TDI. 6. Youngbloods title when he resigned was Vice President of Operations with an annual salary around $100,000, plus rent and car allowances. 7. The state of California does not enforce non-competition agreements.

Issues:

- If TDI and Southwest are less than 100 miles from each other, and Youngblood accepted his position within a year of termination from Southwest, he is in violation of the noncompetitive agreement with Southwest.

- Noncompetition agreements usually narrowly define the length of time the agreement will be in force, the geographic area covered, and the specific activities forbidden [2]. In this case one year seems a reasonable period of time; the one hundred mile radius could be considered too extreme and unfair (perhaps Youngblood cannot be expected reasonably to seek a job over one hundred miles away). - Despite Youngbloods claims that he did not understand the non-competition agreement, he did sign it along with the employment contract. Ultimately, this would be binding on Youngblood if it were to hold up in court as enforceable.

- It is unlikely that the case would be enforced by the court system [1] because Southwest is located in California, a state that does not enforce such contracts.

When was an offer made in this case?

A valid offer has three parts: Communication, Commitment, and Definite Terms [3]. This was most likely fulfilled during the in person meeting, when Schwimmer tells Youngblood that a contract and non-compete will be required, in addition to the other terms of the employment offer. The condition for definite terms was not fulfilled during the first phone call.

When did acceptance take place in this case?

Acceptance of an offer may happen in a variety of ways but must conform with the method prescribed by the offer [3]. Since the offer indicated that an employment agreement and noncompete were required to be signed, acceptance officially took place when Youngblood signed the contract.

References: [1] Twomey, D. P., & Jennings, M. M. (2011). Business law: Principles for todays commercial environment. (3rd ed., pp. 261-274). Mason, Ohio: Cengage Learning.

[2] Unknown. (n.d.). Retrieved from http://legal-dictionary.thefreedictionary.com/Noncompete Agreement

[3] Unknown (n.d.). Retrieved from http://yourbusiness.azcentral.com/3-elements-valid-offer7194.html