According to the Court’s opinion, the employee resigned his employment
and went to work for a former co-worker about 6 months after she formed a
competing dance instruction studio.
About six months after that, the employer initiated legal action,
including “claims for breach of contract, unfair
competition, breach of fiduciary duty, and misappropriation of trade secrets
and confidential information (the student list)” taken by the co-defendant. The employee’s attorney pointed out, among
other things, that the student list had not been confidential. Although the employer’s attorney agreed that
the employee was primarily a witness instead of a party, he did not dismiss the
claims against her. The employer also
failed to obtain any witnesses to testify against the employee at the hearing.
The trial court in this case imposed sanctions under R.C.
2323.51(B), which allows the trial court to sanction a party, counsel, or both
for engaging in frivolous conduct in the course of litigation. The statute
defines frivolous conduct to include conduct that "consists of allegations
or other factual contentions that have no evidentiary support or, if
specifically so identified, are not likely to have evidentiary support after a reasonable
opportunity for further investigation or discovery." R.C. 2323.51(A)(2)(a)(iii).
"Under this definition of 'frivolous conduct,' the test is whether no
reasonable attorney would have brought the action in light of the existing
law."
The employer’s conduct was frivolous because
the employer and its attorney knew that it lacked a legal basis to continue the
lawsuit against the employee. By failing
to dismiss the lawsuit, the employee
and her attorney had to prepare for and attend a preliminary
injunction hearing where Plaintiff presented no evidence of any kind against her.
Plaintiff and its counsel, based on the failure to secure or talk to witnesses
and the one sided settlement offer to Icenhour, knew that they were not going
to proceed against [the employee].
“[T]he
frivolousness of appellants' conduct lies not in filing the original complaint,
but rather in declining to timely dismiss it after failing to prosecute the
action.”
NOTICE: This summary is designed merely to inform and alert you
of recent legal developments. It does not constitute legal advice and does not
apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
