Human Resource Selection 9th Edition by Marianne Jennings

Exercise 19

CAA is a Hollywood talent agency that represents sports figures. IMG Worldwide is its major competitor. Over the past two years, IMG agents Casey Close and Tom Condon have left their jobs and been hired by CAA. Shortly after their departure, IMG clients Derek Jeter, Tony Gonzalez, and LaDainian Tomlinson left IMG for CAA. In April 2010, Matthew Baldwin, a junior agent at IMG in Ohio, left his $90,000-per-year job and joined CAA. Mr. Baldwin also moved to California. IMG has filed suit against both Mr. Baldwin and CAA for violation of Mr. Baldwin's noncompete clause. The clause, which is part of a contract Mr. Baldwin signed when he was hired by IMG in Ohio, prohibits him from moving to a competing talent firm for a one-year period. IMG's suit also alleges that Mr. Baldwin took 7,000 confidential files from IMG when he left. Mr. Baldwin has denied the allegations, maintaining that his computer contained only personal information he had gathered from public records on coaches, salaries, and teams. CAA has responded to the suit by citing the California statute that makes covenants not to compete unenforceable. IMG has responded by noting that Ohio law, not California law, applies and that California's law does not apply when a former employee has take confidential information from company files to his new employer. Evaluate the enforceability of the covenant not to compete. Be sure to think back to Chapter 3 and discuss which court would have jurisdiction and which law would apply. Why is it important to determine which law applies?