Consider the following scenario:

Southwest Industries, Inc. is a corporation that provides technical services. Suppose Mike Youngblood and TDI Technical Services are Southwest’s former Vice President of Operations and Southwest's competitor, respectively.

On June 26, 1999, Youngblood signed an employment contract with Southwest to work as a recruiter making $29.50 per hour. The contract contained a noncompetition agreement preventing Youngblood from working for a competitor of Southwest for one year within a 100-mile radius following termination of employment with Southwest.

Prior to signing the contract, Youngblood talked to Peter Schwimmer, Southwest's owner and president, on the phone about the job. Schwimmer did not discuss or mention the noncompete agreement with Youngblood on the phone this first time.

Schwimmer and Youngblood later met in person to discuss the job. Schwimmer has stated that he recalls briefly telling Youngblood that he would be expected to sign an employment contract that contained a noncompete agreement.

Youngblood stated that he does not remember whether Schwimmer mentioned the noncompete agreement during this meeting. Youngblood did not ask for a draft of the contract or noncompete agreement and Schwimmer did not give any to Youngblood.

Later, Youngblood called Schwimmer to further discuss the job offer and accept the position. Schwimmer says that he does not remember specifically telling Youngblood about the noncompete agreement, but recalls that he “usually” tells new hires about noncompete agreements. Youngblood again has stated that he does not remember whether Schwimmer mentioned the noncompete agreement during this conversation. Again, Youngblood did not ask for a draft of the contract or noncompete agreement and Schwimmer did not give any to Youngblood.

Youngblood accepted the position and on June 26, 1999, and signed the employment contract including the noncompete agreement. Youngblood has stated that he did not understand the noncompete agreement. Youngblood did not ask questions or get an independent review of the contract before he signed it.

Before beginning working for Southwest, Youngblood worked for Moller Financial Corporation. Youngblood quit his job at Moller after Schwimmer offered him the job. Youngblood signed the noncompete agreement after he quit his job at Moller.

Youngblood worked for Southwest until April 5, 2003, when Youngblood quit and started to work for TDI. Youngblood's title at Southwest before he quit was Vice President of Operations with an annual salary around $100,000, plus rent and car allowances.

Discuss the facts and issues. Identify where the offer took place and where the acceptance took place. Provide reasoning for your conclusions. Post the group's final result in the 3-3 Formation of a Contract: Class Forum.

For additional details, please refer to the Group Analysis Rubric document in the Assignment Guidelines and Rubrics section of the course.

Facts: 1. Youngblood worked for Southwest for nearly 4 years a. Contract start: June 26th, 1999 b. Quit: April 5th, 2003 c. The role he started in (recruiter) was not the job he ended in (VP of Operations) d. His first role was hourly ($29.50 / hour) and his second salary with benefits ($100k / year) e. A contract was signed on June 26th, 2009 2. Contract in place a. Verbal offer over the phone and in face-to-face meetings i. Accepted verbally prior to June 26th, 1999 ii. No definitive evidence of inclusion on non-compete in this format b. Written contract prior to starting employment i. Signed on June 26th, 1999 ii. Non-compete clause was included in written form 1. Prohibits working for a competitor within 1 year of termination of employment 2. Stipulates competitor / non-compete within 100 mile radius 3. TDI a. Competitor to Southwest
Issues:
1. If Schwimmer did not mention the non-compete in his discussions, and acceptance was provided verbally to those by Youngblood, was the non-compete part of the contract? a. Would the verbal contract and offer / acceptance then be amended on June 29th, 1999 when it was signed by Youngblood? 2. Does “termination of employment” include quitting? 3. How close are TDI and Southwest from each other (within 100 miles)? 4. Does the employment contract become void upon promotion / taking another role? a. Was it amended? b. Was the non-compete specific to the original role that Youngblood had? c. Does type of employment (hourly vs. salary w/ benefits) have an impact? 5. On what date did Youngblood begin working for TDI (within 1 year)? 6. Is there intent to accept the offer (contract) if the offer (contract) isn’t understood? Where did the offer take place: 1. The offer initiated over the phone and refined during following multiple in-person meetings between the president / owner (Schwimmer) and Youngblood.
Where did the acceptance take place:

1. The acceptance took place at an in person meeting prior to the contract signature. Acceptance does not need to be written (p. 257 chapter 13 in our text).