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Beverage Systems of the Carolinas: Blue Pencils and Implied ContractsLabor and Employment Law Section of the North Carolina Bar Association
December 18, 2014

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On August 5, 2014, the North Carolina Court of Appeals issued its most recent decision on the legal enforceability of a non-compete agreement under North Carolina law in the case of Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, No. COA14-185, (N.C. App. Aug. 5, 2014). The Court also opined on the contract, or conduct, required to support claims for tortious interference with contract and tortious interference with prospective economic advantage. The court reversed the superior court’s grant of summary judgment to the defendant, which had held the non-compete unenforceable, and remanded to the lower court with directions to “blue pencil” the territory of the non-compete agreement into a reasonable form and hold a trial on whether such revised agreement was breached. The Court also held that the plaintiff’s prior course of ongoing business relations, though not based on a written agreement or other specific terms, was sufficient for tortious interference and related claims.

The majority opinion is authored by Judge Hunter, joined by Judge McGee. Judge Elmore submitted a strongly worded separate dissenting opinion. As of this writing, the appeal is pending before the Supreme Court of North Carolina, and a decision may be expected in the second quarter of 2015. The case of Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC could become one of the most significant non-compete and business tort cases in North Carolina for many years to come, whether upheld or reversed by the Supreme Court of North Carolina.

To read the full article by Jeremy Stephenson, click here