Antitrust Law Daily Wrap Up, ANTITRUST—N.D. W.Va.: Audiologist’s claims against a former employer over non-compete agreement fail, (Feb 6, 2014)

By Linda O’Brien, J.D., LL.M.

An audiologist failed to support West Virginia Antitrust Act (WVATA) counterclaims against her former employer over the firm’s use of covenants not to compete, the federal district court in Wheeling has decided (Audiology Distribution, LLC v. Hawkins, February 5, 2014, Stamp, F.).

Jill Hawkins is a licensed audiologist who was employed with TriState Audiology. After TriState was acquired by Audiology Distribution, LLC d/b/a HearUSA, Hawkins accepted an offer of employment from HearUSA. As a condition of her employment, Hawkins was required to sign a covenant not to compete. In August 2013, Hawkins obtained a certificate of limited liability company for “Hawkins Hearing, LLC”, a business loan, and a business lease on property located near HearUSA’s location. Subsequently, Hawkins resigned her employment with HearUSA and opened her own audiology business.

HearUSA filed suit against Hawkins, alleging breach of contract and tortious interference with prospective contractual relations resulting from her violation of the covenant not to compete. Hawkins asserted counterclaims, including violations of the West Virginia Antitrust Act (WVATA). The plaintiff moved to dismiss the counterclaims.

The court found that Hawkins failed to allege facts to show that the covenant not to compete was an unreasonable restraint of trade. The WVATA states that a claimant must allege that there was a conspiracy and the concerted action imposed an unreasonable restraint on trade. Hawkins alleged only that a restraint of trade existed due to HearUSA’s use of covenants not to compete. The allegation was speculative and did not specifically show how the alleged conspiratorial conduct adversely affected competition in the relevant geographic market.

Hawkins also failed to establish the possession of monopoly power by HearUSA and its willful acquisition or maintenance of the monopoly power, according to the court. She failed to allege any facts describing the circumstances or extent of HearUSA’s monopoly power in the relevant market or its alleged willful acquisition or maintenance of that power. Thus, Hawkins’ counterclaims under the WVATA were dismissed.

The court granted the plaintiff’s motion to dismiss as to the defendant’s antitrust claims, as well as claims for libel, invasion of privacy, and malicious prosecution, but denied the motion with respect to the defendant’s claims for intentional or reckless infliction of emotional distress and economic duress.

The case is No. 5:13CV154.

Attorneys: Theodore A. Schroeder (Littler Mendelson, P.C.) for Audiology Distribution, LLC. Michael A. Adams (Hinerman & Associates) for Jill K. Hawkins.

Companies: Audiology Distribution, LLC

Cases: Antitrust WestVirginiaNews