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Snell & Wilmer Secures Appellate Victory Enforcing Restrictive Covenants for First American Title

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On October 9, 2018, attorneys from Snell & Wilmer’s Salt Lake City Labor & Employment Group secured a final victory for First American Title Company and First American Title Company LLC by way of a unanimous opinion from the U.S. Court of Appeals for the Tenth Circuit. This win puts to rest a three-year dispute between First American and a former employee who solicited 25 other First American employees in a mass departure to create a direct competitor.

After a three-week jury trial before the trial court in December 2016, Snell & Wilmer obtained a judgment for $2,725,000 in compensatory damages and $500,000 in punitive damages against First American’s former employee, his new company, and two other former First American employees. The trial court also awarded nearly $3 million in attorneys’ fees. The jury unanimously found that the individual defendants had violated their non-compete and non-solicitation agreements, breached their confidentiality obligations, and that the new company had tortiously interfered with First American’s contracts when the individuals, while still employed with First American, organized and opened a five-office competitor, sometimes right next door to their former First American offices.

Following the jury verdict, two of the individual defendants and the new company appealed, throwing into their briefing every argument in an effort to find any justification to reverse the jury verdict and the legal rulings that the trial court had made against them. In a 27-page opinion, the Tenth Circuit affirmed the trial court, noting that the Appellants failed to adequately present many of their arguments and had waived many others. Despite previous threats to explore all options to overturn the verdict, Appellants did not choose to seek en banc review or petition for a rehearing.

Mark Morris was lead counsel on the appeal, with associates Bret Evans and Danny Green assisting in the briefing. Matt Lalli argued the case before the Tenth Circuit. Former partner Jessica Yates and paralegal Gail Boling also provided assistance with the briefing.

A copy of the Tenth Circuit opinion can be found here.