Gregory M. Clift recently secured a directed verdict against Rhodes Team n/k/a PenFed Realty in its lawsuit against a former real estate agent claiming it was entitled to a “50% referral fee off the gross commission” if she “sign[ed] a listing or [made] a sale with ANY CLIENT FROM THE RHODES TEAM’S DATA BASE.” Despite repeated efforts to resolve the matter by explaining the restrictive covenant did not meet Texas law, the matter went to trial.
At trial PenFed’s witness, Nicholas Galloway, admitted the “database” was started before Mr. Clift’s client started with PenFed, contained “clients” whose names were obtained simply from them completing on-line forms with third parties, and that many of the “clients” in the database were unknown to Mr. Clift’s client. On re-direct, Mr. Galloway then changed the company’s position of enforcing the overbroad restraint of trade to only those clients with which Mr. Clift’s client worked. Without calling a single witness at trial (and not having his client attend) the court granted a directed verdict in favor of Mr. Clift’s client.
The win was so significant PenFed voluntarily dismissed a second lawsuit against another former real estate agent where it sought to enforce an almost identical restrictive covenant.
The win is another in the Firm’s practice of defending and enforcing restrictive covenants. This win was especially significant as it defended two former employees from an attempt by a company to strong arm them into paying money to it that was not owed.