AUDIOLOGY DISTRIBUTION, LLC v. HAWKINS

Filing 97

MEMORANDUM OPINION AND ORDER DENYING THE DEFENDANT'S 73 COMBINED MOTION TO CORRECT AND MOTION FOR SUMMARY JUDGMENT, GRANTING THE PLAINTIFF'S 80 MOTION FOR PARTIAL SUMMARY JUDGMENT AND DENYING THE DEFENDANT'S 76 SUPPLEMENTAL MOTIO N FOR SUMMARY JUDGMENT: The Clerk is DIRECTED to enter judgment on the defendants counterclaims of economic duress and intentional infliction of emotional distress. Because this Court has granted the plaintiff's motion for partial summary judgment, the issue of damages remains to be resolved at trial. Signed by Senior Judge Frederick P. Stamp, Jr. on 12/2/14. (copy to counsel of record via CM/ECF) (rjs)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
AUDIOLOGY DISTRIBUTION, LLC
d/b/a HEARUSA,
Plaintiff,
v.

Civil Action No. 5:13CV154
(STAMP)

JILL K. HAWKINS, individually
and d/b/a HAWKINS HEARING, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
DENYING THE DEFENDANT’S COMBINED MOTION
TO CORRECT AND MOTION FOR SUMMARY JUDGMENT,
GRANTING THE PLAINTIFF’S MOTION
FOR PARTIAL SUMMARY JUDGMENT AND
DENYING THE DEFENDANT’S SUPPLEMENTAL
MOTION FOR SUMMARY JUDGMENT
I.

Procedural History

On November 6, 2013, the plaintiff filed a complaint against
the defendant, alleging claims for breach of contract, breach of
the duty of loyalty, and tortious interference with prospective
contractual relations.

This conduct allegedly resulted from the

defendant’s violation of a covenant not to compete.

Thereafter,

the plaintiff filed a motion for a temporary restraining order and
preliminary injunction and a motion to expedite discovery.

This

Court, following a hearing, granted the plaintiff’s motion for a
temporary restraining order. This Court then held a hearing on the
plaintiff’s motion for a preliminary injunction. At the conclusion
of this hearing, the Court denied the plaintiff’s motion for a

preliminary injunction without prejudice because the plaintiff
failed to sufficiently demonstrate irreparable harm.

ECF No. 43.

The plaintiff appealed this Court’s decision, which the United
States Court of Appeals for the Fourth Circuit affirmed.

ECF No.

70.
Prior to the hearing on the preliminary injunction, the
defendant filed both her answer and a counterclaim against the
plaintiff.

The

defendant’s

counterclaim

asserted

claims

for

economic duress, libel, bad faith, a violation of the West Virginia
Antitrust Act, malicious prosecution, and intentional infliction of
emotional distress (“IIED”). ECF No. 27. The plaintiff then filed
a motion to dismiss the defendant’s counterclaim, arguing that the
defendant

failed

counterclaims.

to

assert

sufficient

facts

to

support

such

The defendant responded, claiming that she stated

sufficient factual support for her allegations.

This Court then

granted the plaintiff’s motion to dismiss in part and denied the
motion in part.

ECF No. 57.

Specifically, this Court granted the

plaintiff’s motion to dismiss as to the libel, invasion of privacy,
violations of the West Virginia Antitrust Act, and malicious
prosecution claims.

However, this Court denied the plaintiff’s

motion regarding the IIED and economic duress claims.
Following that memorandum opinion and order, the defendant
filed a motion to amend her counterclaim.
defendant

claimed

that

she

resolved

2

the

Specifically, the
inadequacies

of

her

counterclaims that this Court noted in its memorandum opinion
granting in part and denying part the plaintiff’s motion to
dismiss. Accordingly, she sought to re-plead her counterclaims for
libel, invasion of privacy, violations of the West Virginia Human
Rights Act, and malicious prosecution. However, she provided no
further explanation as to why her motion to amend should be
granted.

The plaintiff filed a response to the motion to amend,

arguing that the defendant’s attempt to re-plead her counterclaims
was futile and that the only new allegations contained in the
amended counterclaim were unsupported legal conclusions.

This

Court denied the defendant’s motion, finding that her proposed
counterclaims and allegations were both conclusory and futile. ECF
No. 70.
Since the denial of the defendant’s motion to amend her
counterclaim, the parties each filed the following motions that are
the subject of this memorandum opinion and order: (1) the defendant
filed a combined motion to correct and motion for summary judgment;
(2) the plaintiff filed a motion for partial summary judgment; and
(3) the defendant filed a supplemental motion for summary judgment.
Those motions are discussed in the next part of this memorandum
opinion

and

order.

For

the

reasons

set

forth

below,

the

defendant’s combined motion to correct and motion for summary
judgment

and

the

defendant’s

supplemental

3

motion

for

summary

judgment are denied.

Further, the plaintiff’s motion for partial

summary judgment is granted.
II.

Facts

The defendant, Jill K. Hawkins, is a licensed audiologist in
West Virginia.
audiology.

She has her masters and doctorate degrees in

After the company she worked for from 2000 to 2004

closed, she and a colleague opened TriState Audiology in Weirton,
West Virginia.

Initially, the defendant was a 49% shareholder of

TriState Audiology. In October 2007, the defendant no longer owned
any portion of TriState Audiology but stayed with the company as an
employee and sole audiologist.1

At some point in late 2011 or

early 2012, the defendant learned that TriState Audiology may be
sold.

In Spring 2012, the defendant met with Richard Whitman

(“Whitman”),

the

plaintiff’s

Vice

President

of

Business

Development, where she learned that the plaintiff was considering
purchasing

TriState

Audiology.

The

plaintiff

then

acquired

TriState Audiology on or about September 27, 2012.
On

or

around

June

2012,

prior

to

the

acquisition,

the

defendant met with Whitman at the plaintiff’s corporate offices in
Florida

to

discuss

potential

employment

acquisition of TriState Audiology.

upon

the

plaintiff’s

At this meeting, the defendant

and Whitman discussed the terms of her potential employment, which

1

The defendant indicated during her testimony that TriState
Audiology also employed “a couple doctoral residents two years in
a row” but that she was the main audiologist.
4

included a discussion of the covenant not to compete.

Whitman

explained to the defendant that signing the covenant not to compete
was a requirement of employment with the plaintiff.

The covenant

states in pertinent part:
For and in consideration of employment with the Company
Employee hereby covenants and agrees that for a period of
twelve months following the termination of employment for
Audiology Distribution,[2] Employee shall not, directly
or indirectly, compete with Audiology Distribution within
a 10 mile radius wherein Employee performed services
under its employment with the Company for or on behalf of
Audiology Distribution, and that this non-compete
covenant specifically includes, but is not limited to,
contacting the customers, clients and prospective
customers and clients of Audiology Distribution.
Employee
acknowledges
that
the
restrictions
and
obligations set forth and imposed herein will not prevent
Employee from obtaining gainful employment in Employee’s
field of expertise or cause Employee undue hardship, and
that the restrictions imposed herein are reasonable and
necessary to protect the legitimate business interests of
Audiology Distribution. Employee further acknowledges
that it is impossible to measure the monetary damages to
Audiology Distribution by reason of breach of any of the
provisions contained herein, and that in the event of a
breach by Employee, Audiology Distribution shall be
entitled to equitable relief, including the right to
enjoin any party in violation of this agreement.
Employee further understands and agrees that if a court
shall hold any part of this covenant not to compete as
unenforceable due to its general scope, duration or
geographic restriction, then in such event Employee
agrees that the scope, duration or geographic restriction
shall be amended to the greatest scope, longest period of
time and the largest geographical area enforceable under
the applicable law of the state.
ECF No. 38 Ex. 3. In addition to that discussion concerning the
covenant not to compete, the defendant received an electronic copy

2

This Court notes that the plaintiff Audiology Distribution,
LLC does business under the name HearUSA.
5

of the covenant via email on June 22, 2012.

Pursuant to her

employment contract, the defendant was to report for her first day
of work on October 1, 2012. However, the defendant allegedly began
working for the plaintiff on Friday, September 28, 2012.

On

Monday, October 1, 2012, approximately two to three days later, she
signed her employment offer and the covenant not to compete.

Her

employment offer contained her salary, a bonus provision, and a
commission provision for the products she sold to her patients.
In Summer 2013, the defendant started to look into opening her
own audiology business. On August 15, 2013, the defendant obtained
a certificate of limited liability company for “Hawkins Hearing.”
On September 6, 2013, on behalf of Hawkins Hearing, the defendant
obtained

a

business

loan.

Then

on

September

10,

2013,

the

defendant, again on behalf of Hawkins Hearing, obtained a business
property lease for a property located less than three miles from
the plaintiff’s Weirton, West Virginia location. A little over two
weeks later, on September 26, 2013, the defendant faxed her
resignation letter to her direct supervisor.

Her last day of

employment with the plaintiff was October 11, 2013.

Prior to

resigning, the defendant told some of her patients that she planned
to leave and possibly open her own business.

After leaving, the

defendant claims that she received approximately 25 phone calls at
her home from patients asking where she was, to which she responded
she was opening her own business.

6

The defendant started seeing

patients at her new location on November 7, 2013. From November 7,
2013 through November 19, 2013, when the temporary restraining
order became effective, the defendant scheduled 25 appointments
with 21 different patients.

Twenty of those patients were prior

patients of the plaintiff.
Upon discovering that the defendant not only opened her own
practice but also saw many of the plaintiff’s former patients, the
plaintiff filed a complaint against the defendant.

Specifically,

the plaintiff asserted claims for breach of contract, breach of the
duty

of

loyalty,

and

contractual relations.

tortious

interference

with

prospective

As mentioned earlier, this Court granted

the plaintiff’s request for a temporary restraining order against
the defendant, but denied the plaintiff’s request for a preliminary
injunction. Further, this Court granted in part and denied in part
the plaintiff’s motion to dismiss the defendant’s counterclaims
with the exception of the defendant’s economic duress and IIED
counterclaims.

At issue now is the defendant’s combined motion to

correct

Rule

under

plaintiff’s
defendant’s

motion

60
for

supplemental

and

motion

partial
motion

motions are discussed below.

7

for

summary

summary
for

judgment,

judgment,

summary

judgment.

and

the
the

Those

A.

Defendant’s Combined Motion to Correct and Motion for Summary

Judgment
The defendant first filed a motion to correct pursuant to
Federal Rule of Civil Procedure 60(a) (“Rule 60”) regarding this
Court’s memorandum opinion and order denying the plaintiff’s motion
for a preliminary injunction.

See ECF No. 43.

Further, within

that motion to correct, the defendant includes a motion for summary
judgment.
Regarding the motion under Rule 60, the defendant requests
this

Court

to

“revisit

the

issue”

of

the

enforceability of the covenant not to compete.

validity

and

The defendant

argues that the primary issue here is that the employment contract
and covenant not to compete were signed four days after the
plaintiff employed the defendant.

To prove this, the defendant

alleges that she started working for the plaintiff on September 28,
2012.

Then,

employment

on

October

agreement

and

1,
the

2012,

the

covenant

defendant
not

to

signed

compete.

the
The

defendant then points out that under Environmental Products Co. v.
Duncan, 285 S.E.2d 889, 890 (W. Va. 1981), continued employment is
not adequate consideration for a new contract.

The defendant

claims that two contracts are at issue, specifically the employment
contract and the covenant not to compete.

Further, the defendant

claims that the only consideration offered for the alleged second
contract, the covenant not to compete contract, was continued

8

employment.

Therefore, because no valid consideration existed for

the “second” contract, the contract should be considered invalid
and thus unenforceable.

Because of this, the defendant requests

this Court under Rule 60 to (1) include more analysis and findings
on this issue than provided in the memorandum opinion (ECF No. 43),
and (2) to correct the memorandum opinion to incorporate such
findings and analysis.

Further, the defendant then asserts that

once this Court includes the analysis the defendant claims is
lacking, then no material issues of fact will exist and thus
summary judgment should be granted in favor of the defendant.3
The plaintiff responded to the defendant’s motion to correct,
arguing that the Rule 60 motion was unfounded, and that the motion
for summary judgment should be denied.

ECF No. 79.

Specifically,

the plaintiff claims that Rule 60 is intended to apply to only
clerical or ministerial mistakes, not to relitigate decided issues.
Following the plaintiff’s response, the defendant filed her reply
where she claims that Rule 60 does apply in this situation.

ECF

No. 84.

3

In particular, the defendant’s combined motion provides the
following argument regarding the motion for summary judgment: “Once
this [Court grants the defendant’s motion to correct and] this
analysis is made, there will be no material issue of fact, and
Defendant, Jill Hawkins will be entitled to summary judgment.” ECF
No. 74.
9

B.

Plaintiff’s Motion for Partial Summary Judgment
On September 8, 2014, the plaintiff filed a motion for partial

summary judgment, seeking judgment in its favor for the breach of
contract claim and for the defendant’s counterclaims of economic
duress and IIED.

ECF No. 80.

The plaintiff first argues that

adequate consideration existed to make the contract valid and
enforceable.

Specifically,

the

plaintiff

provides

that

the

defendant knew about the covenant not to compete for more than four
months before starting her employment.
employment,

salary,

benefits,

and

Further, her initial

bonuses

all

constituted

sufficient consideration. Thus, the plaintiff claims that the fact
the defendant failed to sign the covenant not to compete until
October 1, 2013, is immaterial.

Further, because the clause is

valid, the plaintiff asserts that the clause is enforceable due to
its reasonable scope.

Accordingly, the plaintiff requests this

Court to find that the defendant breached the employment contract’s
covenant not to compete.
entitled

to

summary

Next, the plaintiff argues that it is
judgment

regarding

counterclaims of economic duress and IIED.

the

First, the

defendant’s
plaintiff

asserts that the covenant not to compete is not only valid and
reasonable, but also is the product of the parties’ freedom to
contract.

Second, the plaintiff claims that having the defendant

sign the covenant not to compete fails to show any form of extreme
or outrageous conduct.

10

The defendant then filed her response to the plaintiff’s
motion for partial summary judgment. ECF No. 85. In her response,
the defendant claims that she satisfied the elements for economic
duress.

Specifically, the defendant asserts that because she was

essentially “threatened” with an ultimatum of signing the covenant
not to compete or allegedly face termination of her employment, she
suffered economic duress.
Following the defendant’s response, the plaintiff filed its
reply to its motion for partial summary judgment.

ECF No. 88.

Plaintiff first asserts that the defendant misrepresented the
record in her response. Specifically, the plaintiff claims that it
never “threatened” the defendant with termination of her employment
if she never executed the employment agreement.

Further, the

plaintiff claims that no record exists to show that the parties had
a mutual understanding that the covenant not to compete would be
unenforced by the plaintiff.

Notwithstanding the defendant’s

alleged misrepresentations, the plaintiff argues that the defendant
fails to demonstrate that any issues of material fact exist.
Second, the plaintiff again argues that it is entitled to
summary

judgment

economic duress.

regarding

the

defendant’s

counterclaim

of

The plaintiff claims that the defendant still

fails to present concrete evidence to support her claim for
economic duress.

In particular, the plaintiff argues that the

economic duress claim in this civil action is distinguished from

11

Machinery Hauling, Inc. v. Steel of West Virginia, 384 S.E.2d 139
(W. Va. 1989), in that the defendant faced no threats or ultimatums
regarding the covenant not to compete.

Finally, the plaintiff

asserts that it is entitled to summary judgment regarding the
defendant’s counterclaim for IIED.

Here, the plaintiff alleges

that

is

the

defendant’s

IIED

claim

predicated

on

several

counterclaims this Court already dismissed.

See ECF No. 57.

addition,

defendant

the

plaintiff

argues

that

the

insufficient evidence to satisfy her IIED claim.

In

presents
For those

reasons, the plaintiff claims that this Court should grant its
motion for partial summary judgment.
C.

Defendant’s Supplemental Motion for Summary Judgment
In addition to her combined motion to correct and motion for

summary judgment, the defendant also filed a supplemental motion
for summary judgment.

ECF No. 76.

In her supplemental motion for

summary judgment, the defendant argues that she is entitled to
summary judgment in her favor regarding the plaintiff’s breach of
contract claim.

Specifically, the defendant asserts that the

plaintiff’s corporate policies in its employee handbook render the
contract at issue unenforceable.

The defendant points to language

in the handbook that it claims requires the CEO, COO, or CFO of the
plaintiff to sign all agreements pertaining to an employee’s
employment contract.

Further, the defendant also claims that the

plaintiff’s acknowledgment form provides a similar requirement.

12

According to the defendant, the covenant not to compete was signed
by none of these allegedly necessary parties.

Therefore, the

covenant is unenforceable. Thus, because mutual assent is lacking,
she argues that this Court should grant her supplemental motion for
summary judgment.
The plaintiff then filed its response in opposition to the
supplemental motion for summary judgment.

ECF No. 86.

First, the

plaintiff asserts that the supplemental motion for summary judgment
is based on inadmissible evidence, namely the employee handbook and
acknowledgment form.

Second, the plaintiff argues that the plain

language of the employee handbook and acknowledgment form undercuts
the

defendant’s

argument,

citing

to

language

that

says

the

provisions of the handbook “do not confer any rights or privileges
upon employees.”

Finally, the plaintiff asserts that even if a

high-level executive did not sign the employment contract, mutual
assent existed so that the contract can be enforced against the
defendant.
After the plaintiff filed its response, the defendant filed
her reply to the supplemental motion for summary judgment. ECF No.
87.

The defendant first claims that the handbook should be

admissible

because

it

was

uncovered

through

incorporates already admissible business records.

discovery

and

Second, the

defendant disputes the plaintiff’s interpretation of the handbook’s
language that states, “[d]oes not confer any rights or privileges

13

upon you.”

Further, the defendant here also believes that the

covenant not to compete is a significant departure from the
language

in

the

handbook,
she

and

thus

are

missing

argues

warrants
from

the
the

necessary

signatures

that

employment

contract.

Finally, the defendant asserts that no mutual assent

existed.
III.
A.

Applicable Law

Motion to Correct under Rule 60(a)
Federal Rule of Civil Procedure 60(a) states in pertinent

part:
The court may correct a clerical mistake or a mistake
arising from oversight or omission whenever one is found
in a judgment, order, or other part of the record. The
court may do so on motion or on its own, with or without
notice[.]
“Rule 60(a) finds application where the record makes apparent that
the court intended one thing but by merely clerical mistake or
oversight did another.”

Dura–Wood Treating Co. v. Century Forest

Indus., 694 F.2d 112, 114 (5th Cir. 1982).

Based on Rule 60,

courts have the power and duty “to correct judgments which contain
clerical

errors

inadvertence

or

or

judgments

mistake.”

which

American

have

been

Trucking

Transp. Co., 358 U.S. 133, 146 (1958).

issued

Ass’ns

v.

to

Frisco

Such action may be taken

based “on motion or on its own, with or without notice.”
Civ. P. 60(a).

due

Fed. R.

However, although a court may correct clerical

errors “to reflect what was intended at the time of the ruling,

14

‘[e]rrors that affect substantial rights of the parties . . . are
beyond the scope’” of Rule 60(a).

Weeks v. Jones, 100 F.3d 124,

128 (11th Cir. 1996) (quoting Mullins v. Nickel Plate Mining Co.,
691 F.2d 971, 973 (11th Cir. 1982); see also Truskoski v. ESPN,
Inc., 60 F.3d 74, 77 (2d Cir. 1995) (per curiam) (“[Rule 60(a)]
permits only a correction for the purpose of reflecting accurately
a decision that the court actually made.”); United States v.
Whittington, 918 F.2d 149, 150 n.1 (11th Cir. 1990) (“for Rule
60(a) purposes, a mistake of law is not a ‘clerical mistake,’
‘oversight,’ or ‘omission.’” (quoting Warner v. City of Bay St.
Louis, 526 F.2d 1211, 1212 (5th Cir. 1976)).

Thus, a “district

court is not permitted . . . to clarify a judgment pursuant to Rule
60(a) to reflect a new and subsequent intent because it perceives
its original judgment to be incorrect.”

Burton v. Johnson, 975

F.2d 690, 694 (10th Cir. 1992).
B.

Motion for Summary Judgment under Rule 56
Under Rule 56(c) of the Federal Rules of Civil Procedure,
A party asserting that a fact cannot be or is genuinely
disputed must support the assertion by:
(A) citing to particular parts of materials in
the record, including depositions, documents,
electronically stored information, affidavits
or
declarations,
stipulations
.
.
.
admissions, interrogatory answers, or other
materials; or
(B) showing that the materials cited do not
establish the absence or presence of a genuine
dispute, or that an adverse party cannot
produce admissible evidence to support the
fact.

15

Fed. R. Civ. P. 56(c).

The party seeking summary judgment bears

the initial burden of showing the absence of any genuine issues of
material fact.
(1986).

See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23

“The burden then shifts to the nonmoving party to come

forward with facts sufficient to create a triable issue of fact.”
Temkin v. Frederick County Comm’rs, 945 F.2d 716, 718 (4th Cir.
1991), cert. denied, 502 U.S. 1095 (1992) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). However, as the
United States Supreme Court noted in Anderson, “Rule 56(e) itself
provides that a party opposing a properly supported motion for
summary judgment may not rest upon the mere allegations or denials
of his pleading, but . . . must set forth specific facts showing
that there is a genuine issue for trial.”

Id. at 256.

“The

inquiry performed is the threshold inquiry of determining whether
there is the need for a trial—whether, in other words, there are
any genuine factual issues that properly can be resolved only by a
finder of fact because they may reasonably be resolved in favor of
either party.”

Id. at 250; see also Charbonnages de France v.

Smith, 597 F.2d 406, 414 (4th Cir. 1979) (Summary judgment “should
be granted only in those cases where it is perfectly clear that no
issue of fact is involved and inquiry into the facts is not
desirable to clarify the application of the law.” (citing Stevens
v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950))).

16

In Celotex, the Supreme Court stated that “the plain language
of Rule 56(c) mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party who
fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party
will bear the burden of proof at trial.”

Celotex, 477 U.S. at 322.

In reviewing the supported underlying facts, all inferences must be
viewed in the light most favorable to the party opposing the
motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986).
IV.

Discussion

As mentioned earlier, the parties each filed the following
motions that are the subject of this memorandum opinion and order:
(1) the defendant filed a combined motion to correct and motion for
summary judgment; (2) the plaintiff filed a motion for partial
summary judgment; and (3) the defendant filed supplemental motion
for summary judgment. Those motions are decided below in the order
presented.
A.

Defendant’s Combined Motion to Correct and Motion for Summary

Judgment
As indicated earlier, the defendant filed a combined motion to
correct and motion for summary judgment.
each one separately.

This Court will address

For the reasons provided, both of those

motions are denied.

17

1.

Motion to Correct Under Rule 60(a)

In her motion to correct under Rule 60(a), the defendant
requests this Court to “revisit the issue” of the validity of the
covenant not to compete.

The defendant claims this Court erred in

deciding the issue of the validity of the covenant not to compete.
Specifically, she claims that this Court (1) provided insufficient
analysis in its memorandum opinion and order finding that the
covenant not to compete is enforceable and (2) that this Court
referred to the covenant not to compete and employment contract as
one contract when in fact they are two separate contracts.

The

defendant then argues that the primary issue here is that the
employment contract and covenant not to compete were signed four
days after the plaintiff employed defendant.

To prove this, the

defendant again states that she started working for the plaintiff
on September 28, 2012.

Then, on October 1, 2012, the defendant

signed the employment agreement and the covenant not to compete.
Further, the defendant claims that the only consideration offered
for the alleged “second” contract, the covenant not to compete, was
continued employment.

Therefore, because continued employment is

not adequate consideration, no valid consideration existed for the
“second” contract.

Accordingly, the contract should be considered

invalid and thus unenforceable.

The defendant provides that this

properly describes the issue of this civil action, which is “that
the employment contract and [covenant not to compete] were signed

18

four (4) days after [the defendant] became employed with [the
plaintiff].”

Because the defendant contends that this Court did

not adequately focus or address this issue, the defendant requests
under Rule 60 for this Court to include more analysis and findings
on this issue than provided in its memorandum opinion (ECF No. 43),
and to correct the memorandum opinion to incorporate such findings
and analysis.

Further, the defendant then asserts that once this

Court includes the analysis that the defendant claims is lacking,
then no material issues of fact will exist and thus summary
judgment should be granted for the defendant.
As indicated above, Rule 60 permits correction at any time for
“clerical mistakes” that arise from “oversights or omission[s].”
Weeks, 100 F.3d at 128 (quoting Fed. R. Civ. P. 60(a)).

However,

it is abundantly clear that clerical mistakes do not include
“errors of substantive judgment.” Jones v. Anderson-Tully Co., 722
F.2d 211, 212 (5th Cir. 1984) (per curiam).

Thus, “errors that

affect substantial rights of the parties . . . are beyond the scope
of Rule 60(a).”

Mullins, F.2d at 1212.

Here, the defendant is

requesting this Court to go well beyond correcting a clerical
mistake.

In the prior memorandum opinion and order that has the

“alleged” error, this Court found that the employment contract
seemed to be valid at the time of the hearing.4

4

Further, this

In its prior memorandum opinion and order (ECF No. 43), this
Court determined that the contract seemed to be valid and that the
covenant not to compete also seemed to be enforceable at the time
19

Court also determined that the covenant not to compete appeared
reasonable and thus likely enforceable.

Now, the defendant is

seeking the following, as provided in their memorandum of law:
“Defendant seeks to have this Court revisit the issue of the
validity of the Covenant Not-to-Compete . . . and find it to be
void since there was no consideration to Defendant to sign the
Covenant on October 1, 2012, as she was at that time already an
employee of [the plaintiff].” ECF No. 74. The defendant is asking
this

Court

to

determination.

completely

reverse

its

position

on

a

prior

This rises far beyond the level of a clerical

mistake, and such a finding would obviously “affect substantial
rights of the parties.”

Mullins, F.2d at 1212.

permit such an action by this Court.

Rule 60 does not

Therefore, this Court denies

the defendant’s motion to correct under Rule 60.
2.

Defendant’s Motion for Summary Judgment

Notwithstanding

the

denial

of

the

defendant’s

motion

to

correct under Rule 60(a), this Court turns next to the motion for
summary judgment which the defendant combined with her motion to
correct. As provided earlier, the defendant argues that this Court
did not focus on the primary issue of this case, which is that the
employment contract and covenant not to compete were allegedly

the plaintiff sought a preliminary injunction.
This was found
under this Court’s determination of whether to grant a preliminary
injunction against the defendant.
However, this Court will
completely resolve the validity and enforceability issue with this
opinion.
20

signed four days after the plaintiff employed the defendant.
Accordingly, the defendant again argues that continued employment
is inadequate consideration and thus any resulting contract is
invalid.

The defendant believes that once this Court understands

the alleged error it made, which is finding the employment contract
valid and the covenant not to compete enforceable despite the four
day span of time, then no issues of material fact will exist.
Therefore, the defendant seems to assert that upon this Court’s
amendment to the analysis section of the prior opinion (ECF No.
43), then the remaining facts and applicable law will warrant
granting summary judgment in favor of the defendant.
This Court does not disagree with the defendant in framing the
issue of this civil action as discussed above. Further, this Court
does not disagree with the defendant in that continued employment
is inadequate consideration to uphold a covenant not to compete.
Environmental Products Co. v. Duncan, 285 S.E.2d 889, 890 (W. Va.
1981).

However,

this

Court

disagrees

with

the

defendant’s

determination that the employment contract and covenant not to
compete should be treated as two separate contracts or that the
contract is invalid.
Under West Virginia law, when a covenant not to compete is
entered into after the commencement of at-will employment, “new
consideration, apart from continued employment, must support the
covenant.”

McGough v. Nalco Co., 496 F. Supp. 2d 729, 746 (N.D. W.

21

Va. 2007) (quoting PEMCO Corp. v. Rose, 257 S.E.2d 885, 889 (W. Va.
1979)); see Syl. Pt. 1, Environmental Products Co., Inc. v. Duncan,
285 S.E.2d 889 (W. Va. 1981).

For example, in Environmental

Products Co., Inc. v. Duncan, an employee signed a contract
containing a covenant not to compete after one and a half years of
already working for the employer.

285 S.E.2d at 890.

In that

case, the Supreme Court of Appeals of West Virginia held that new
consideration needed to be furnished because the covenant not to
compete was contracted for after employment commenced, again in
that case for almost two years.

Thus, in Duncan, the covenant was

rendered void.
Although new consideration must be furnished for covenants not
to

compete

if

contracted

for

after

employment

commences,

a

distinction exists when the covenant not to compete is either
ancillary to or essentially part of the same transaction.

New

consideration is unnecessary when the covenant not to compete is
ancillary to the taking of employment and not a “later attempt to
impose

additional

restrictions

Fisher

Bioservices,

Inc.

v.

on

an

Bilcare,

unsuspecting
Inc.,

employee.”

06CV567,

2006

WL

1517382, at *10 (E.D. Pa. May 31, 2006); see McGough, 496 F. Supp.
2d at 749 (“Generally, a covenant signed prior to, contemporaneous
with, or any time during employment is ancillary to employment.”)
(internal citations omitted). Thus, when a restrictive covenant is
part of the formation of the employment relationship, it is

22

supported by adequate consideration. Nat’l Business Services, Inc.
v. Wright, 2 F. Supp. 2d 701, 707-08 (E.D. Penn. 1998).

Regarding

a more general contract law principle, “separate writings,” here
the covenant not to compete and the employment agreement, “will be
construed together and considered to constitute one transaction
when the parties are the same, the subject matter is the same and
the

relationship

between

the

documents

is

clearly

apparent.”

Ashland Oil, Inc. v. Donahue, 223 S.E.2d 433, 437 (W. Va. 1976).
In this civil action, this Court finds that the covenant not
to compete was part of the formation of the employment contract.
Thus, they are in essence one contract.

First, in an email dated

June 22, 2012, that pertained to her possible employment with the
plaintiff, the defendant received the covenant not to compete
attached to that email.

ECF No. 38 Ex. 1.

The email indicated

that the parties had discussed this covenant not to compete prior
to the defendant’s acceptance of employment.

Further, this email

that contained the covenant not to compete was received on June 22,
2012, well before the date she executed the contract and covenant
not to compete, which was October 1, 2012.

In addition, the

defendant testified to having been informed of the covenant not to
compete prior to receiving the email containing it. Therefore, the
covenant not to compete was clearly part of the contract formation
process before she began her employment. As provided under Ashland
Oil, Inc., here one transaction occurred because (1) the parties

23

were the same in both the employment contract and the covenant not
to compete; (2) the subject matter, here the defendant’s employment
with the plaintiff, was the same; and (3) the documents clearly
relate to each other.

Further, she does not appear to be an

“unsuspecting” employee, as indicated from her receipt of the
covenant not to compete in late June 2012.
Second,

the

employment

contract

clearly

states

expected starting date of employment was October 1, 2012.

that

her

ECF No.

38 Ex. 2. Whether she technically started on Friday, September 28,
2012 versus Monday, October 1, 2012, is immaterial because the
employment contract and covenant not to compete were executed on
October 1, 2012. However, the defendant believes this two to three
day gap between her commencement of work and her actual execution
of the contract means that new consideration must be furnished.
The defendant relies heavily upon Environmental Products Co., Inc.
v. Duncan, and similar cases, asserting that this gap of time
created two separate agreements: one for her employment, which the
defendant claims began on September 28, 2012, and one for the
covenant not to compete, which the defendant claims began on
October 1, 2012.

However, Duncan is readily distinguishable.

In

Duncan, the employer contracted for the covenant not to compete
approximately one and a half years after the employee began working
for the employer, and offered essentially very few changes in the
employee’s salary in exchange for the covenant not to compete.

24

As

the court stated, “[the employee’s] contract, therefore, did not
alter any benefits, conditions or terms of employment; it only
imposed limitations.

Those are void for lack of consideration.”

Here, the defendant’s employment contract clearly provides that she
was to begin working on October 1, 2012, and both the contract and
the covenant not to compete were executed on that date.

Even if

she allegedly began working on September 28, 2012, the covenant not
to compete was clearly part of the same transaction, as it was
discussed and received on or about June 22, 2012. Because of this,
no additional consideration was necessary.
Upon finding that no additional consideration is necessary,
this Court finds that the contract is valid.
provides,

the

“elements

of

a

contract

acceptance supported by consideration.”

As West Virginia law

are

an

offer

and

an

Syl. Pt. 1, First Nat’l

Bank of Gallipolis v. Marietta Mfg. Co., 153 S.E.2d 172 (W. Va.
1967). None of the essential elements are missing in this contract
at issue.
the

As consideration for accepting the offer of employment,

defendant

received

a

$65,000.00

salary,

a

bonus,

commission provision for the equipment that she sold.
contract is valid.

and

a

Thus, the

Further, after finding that this contract is

valid, this Court can now determine whether the covenant not to
compete is enforceable, pursuant to Reddy v. Community Health
Foundation of Man, 298 S.E.2d 906, 915 (W. Va. 1982).

Under West

Virginia law, a covenant not to compete is enforceable so long as

25

it is reasonable pursuant to the “rule of reason standard.”

Id.

A covenant not to compete is “reasonable only if it (1) is no
greater than is required for the protection of the employer, (2)
does not impose undue hardship on the employee, and (3) is not
injurious to the public.”

Id. at 911.

This Court must determine whether the covenant is reasonable
on its face “if judicial scrutiny of it is to continue.”
915.

Id. at

If this Court determines it is unreasonable on its face, the

covenant is deemed “void and unenforceable.”

Id.

As the court in

Reddy stated:
A covenant is unreasonable on its face when the
restriction is excessively broad with respect to time or
area, or if in the circumstances the true purpose of the
covenant appears to be merely to repress the employee,
and prevent him from leaving, rather than to protect the
employer’s business. Good faith, on the other hand, is
evidence of reasonableness.
Id. at 915-916.
If this Court determines that the covenant is reasonable on
its face, this Court must then determine whether the employer has
shown that it has interests that require protection.

Gant v.

Hygeia Facilities Found, 384 S.E.2d 842, 845 (W. Va. 1989).

To

determine whether an employer has interests that need protection,
a court must examine “the extent to which the employee may unjustly
enrich himself by appropriating an asset of the employer for which
the employee has not paid and using it against that very employer.”
Reddy, 298 S.E.2d at 916.

Examples of situations where this may

26

occur “are those where the employer stands to lose his investment
in employee training, have his trade secrets or customer lists
converted by the employee, or have his market share threatened by
the employee’s risk-free entry into the employer’s market.”

Id.

Protectable interests do not include a former employee’s acquired
skills and information that “are of a general managerial nature,
such as supervisory, merchandising, purchasing and advertising
skills and information.”

Syl., Helms Boys, Inc. v. Brady, 297

S.E.2d 840 (W. Va. 1982). If the employer does have interests that
require protection, the restrictive covenant is presumptively
enforceable in its entirety.

Syl. Pt. 3, Reddy.

In this case, the covenant is reasonable. The covenant not to
compete is of limited duration and geographic scope, lasting only
one year and applying to only a ten mile radius.

Further, this

restriction imposes no undue hardship on the defendant, and no
indication exists that it is injuring the public.

This covenant

not to compete fails to greatly limit the defendant to pursue her
profession.

Because

this

Court

finds

that

the

covenant

is

reasonable on its face, the second issue is whether the plaintiff’s
interests require protection.

Based on the evidence presented by

the parties, it is clear that the plaintiff’s market share may be
threatened by the employee’s entry into the defendant’s market.
The defendant testified that within the short period between
November 7, 2013 and November 18, 2013, she saw 21 different

27

patients at her business, 20 of these patients being prior patients
of the plaintiff.

Because of this, the plaintiff’s interest

clearly needed protection at that time.

Therefore, this Court

finds that the contract was valid and that the covenant not to
compete was enforceable.

Therefore, the defendant’s motion for

summary judgment is denied.
B.

Plaintiff’s Motion for Partial Summary Judgment
As discussed earlier, the plaintiff filed a motion for partial

summary judgment, seeking judgment for (1) its claim of breach of
contract

against

the

defendant,

and

(2)

for

counterclaims of economic duress and IIED.

the

defendant’s

ECF No. 80.

The

plaintiff first argues that adequate consideration existed to make
the contract valid and enforceable.

Specifically, the plaintiff

states the defendant knew about the covenant not to compete for
more than four months before starting her employment. In addition,
her

initial

constituted
compete.

employment,
sufficient

salary,

benefits,

consideration

for

the

and

bonuses

covenant

not

all
to

Further, because the clause is valid, the plaintiff

asserts that the clause is enforceable due to its reasonable scope.
Accordingly, the plaintiff requests this Court to find that the
defendant

breached

the

covenant

not

to

compete.

Next,

the

plaintiff argues that it is entitled to summary judgment regarding
the defendant’s counterclaims of economic duress and IIED.

First,

the plaintiff asserts that the covenant not to compete is not only
28

valid and reasonable, but also is the product of the parties’
freedom to contract.

Second, the plaintiff claims that having the

defendant sign the covenant not to compete fails to show any form
of extreme or outrageous conduct. For those reasons, the plaintiff
seeks summary judgment in its favor.

As set forth below, the

plaintiff’s motion for partial summary judgment is granted.
1.

Breach of Contract Claim

As provided earlier, this Court determined that the contract
is valid and that the covenant not to compete is enforceable.
Accordingly,

this

Court

agrees

with

the

plaintiff

defendant breached the covenant not to compete.

that

the

Specifically, the

defendant opened her own practice within three miles of the
plaintiff’s office.

This is irrefutably proven by the documents

establishing her limited liability company, which included her
articles of organization, loan documentation, and lease agreement.
ECF No. 38 Exs. 5, 6, and 7.

Further, the defendant established

her own practice after she ended her employment with the plaintiff
within the one year limitation period.

Most importantly, the

defendant then began to work with 20 of the plaintiff’s clients.
In addition to the geographical and time limitations, the covenant
not to compete clearly provides that the defendant was prohibited
from “contact[ing] the customers, clients and prospective customers
and clients of [the plaintiff].”

ECF No. 38 Ex. 3.

This clearly

violates the covenant not to compete, which again this Court

29

determines is enforceable.
contract at issue.

Therefore, the defendant breached the

Because this Court finds that the defendant

breached the contract, the only issue regarding this claim to be
resolved at trial will be determining damages.
2.

Defendant’s Counterclaims of Economic Duress and IIED

As provided above, the plaintiff argues that it is entitled to
summary

judgment

regarding

economic duress and IIED.

the

defendant’s

counterclaims

of

These remaining counterclaims are

presented below.
a.

Economic Duress

Under West Virginia law, economic duress is defined as

the

following: “Where the plaintiff is forced into a transaction as a
result

of

unlawful

threats

or

wrongful,

oppressive,

or

unconscionable conduct on the part of the defendant which leaves
the plaintiff no reasonable alternative but to acquiesce, the
plaintiff may void the transaction and recover any economic loss.”
Mach. Hauling, Inc. v. Steel of West Virginia, 384 S.E.2d 139, 142
(W. Va. 1989) (holding that customer’s threat to stop doing
business with shipper if shipper did not pay for goods that buyer
rejected was not actionable business or economic duress). Further,
in determining if duress is present, the “test is not so much the
means by which the party was compelled to execute the contract as
it is the state of mind induced by the means employed—the fear of
which made it impossible for him to exercise his own free will.”

30

Id. at 143-44 (internal citations omitted).

Even more pointedly,

“(1) the party who asserts business compulsion ‘must show that he
has been the victim of a wrongful or unlawful act or threat,’ and
(2) ‘such act or threat must be one which deprives the victim of
his unfettered will.’”

Swiger v. Jones, No. 12-1109, 2013 WL

2157693, at *3 (W. Va. May 17, 2013).

However, duress does not

exist when “one party to the contract has driven a hard bargain,”
or if the “market or other conditions now make the contract more
difficult to perform by one of the parties or that financial
circumstances may have caused one party to make concessions.”

Id.

at 145.
The plaintiff claims that the defendant asserts that economic
duress occurred when the plaintiff conditioned the defendant’s
employment upon the execution of the covenant not to compete.

In

response, the defendant claims that she was given an ultimatum and
even threatened with termination of employment if she failed to
agree to the covenant not to compete.
defendant

cites

the

deposition

In support of this, the

transcript

of

Whitman.

The

defendant cites to the following exchange:
Q: So what if an employee for your company hadn’t signed
these documents? What would their situation be?
A [Mr. Whitman]: Well, if they refused to sign them,
then we would have to terminate them. Well, we couldn’t
hire them. Sorry.
The defendant relies upon only the first sentence of Mr.
Whitman’s answer, and claims this demonstrates the threat or
31

ultimatum faced by the defendant.

However, as provided above, Mr.

Whitman actually first misstated his response and then corrected
himself.

The defendant requests this Court to frame the analysis

of economic duress as the whether she “had a ‘hard choice’ to make,
i.e., keep her job and sign the Covenant, or not sign and get
fired.”

ECF No. 85.

That is not the analysis required under the law governing
economic duress. As provided above, the defendant must demonstrate
that she was a victim of a “ wrongful or unlawful act or threat”
and that the “act or threat” was one that deprived her of her
unfettered will. Swiger, No. 12-1109, 2013 WL 2157693, at *3. The
facts do not indicate any such wrongful or unlawful threat by the
plaintiff.

The “threat” of termination of employment that the

defendant attempts to proffer is misstated when one fully reads the
deposition and analyzes the record presented.

Further, no facts

exist that demonstrate that the defendant agreed to the employment
contract and the covenant not to compete due to some deprivation of
her unfettered will.
burden.

The defendant has failed to satisfy her

Accordingly, the plaintiff’s motion for partial summary

judgment regarding the defendant’s counterclaim of economic duress
must be granted.
b.
In

Intentional Infliction of Emotional Distress

support

of

its

motion

for

partial

summary

judgment

regarding the defendant’s counterclaim for IIED, the plaintiff

32

argues that the defendant offers no evidence to support the
required elements of an IIED claim. Further, the plaintiff asserts
that having an employee sign a covenant not to compete fails to
amount to “outrageous” or “extreme” behavior on the part of the
employer.
In order to prevail on a claim for IIED, sometimes referred to
as the “tort of outrage,” the West Virginia Supreme Court has held
that a claimant must prove:
(1) that the [counterclaim] defendant’s conduct was
atrocious, intolerable, and so extreme and outrageous as
to exceed the bounds of decency; (2) that the
[counterclaim] defendant acted with the intent to inflict
emotional distress, or acted recklessly when it was
certain or substantially certain emotional distress would
result from [its] conduct; (3) that the actions of the
[counterclaim] defendant caused the [counterclaim]
plaintiff to suffer emotional distress; and (4) that the
emotional distress suffered by the [counterclaim]
plaintiff was so severe that no reasonable person could
be expected to endure it.
Travis v. Alcon Laboratories, Inc., 504 S.E.2d 419 (W. Va. 1998).
In her response, the defendant only claims that by providing the
alleged

ultimatum

to

sign

the

covenant

not

to

compete,

the

plaintiff did so with the intent to intimidate, coerce, or force
the defendant to execute the agreement.

Further, the defendant

seems to argue that the plaintiff’s offer was a “take it or leave
it” styled-offer, and that allegedly proposing the offer in such a
manner amounts to IIED. Finally, the defendant appears to indicate
that the covenant not to compete implies that if a violation of it
occurred, then the plaintiff would not pursue damages. Because the
33

plaintiff decided to enforce the clause and seek damages against
the defendant, this is further adding to her emotional distress.
The reason IIED is sometimes referred to as the tort of
outrage is that it requires outrageous conduct on the part of the
tortfeasor.

As provided in Travis, it arises in a case “in which

the recitation of the facts to an average member of the community
would arouse his resentment against the actor, and lead him to
exclaim,

‘Outrageous!’”

Travis,

504

S.E.2d

at

426.

The

tortfeasor’s conduct must be more than “unreasonable, unkind or
unfair.”

Grandchamp v. United Air Lines, Inc., 854 F.2d 381, 383

(10th Cir. 1988).

In the facts of this case, the defendant

proffers no conduct that even remotely arises to such an outrageous
level.

The fact that the covenant not to compete was a condition

of the defendant’s employment fails to satisfy the requirements of
IIED. Further, the defendant is mistaken regarding the text of the
covenant

not

to

compete.

Upon

this

Court’s

reading

of

the

covenant, no such limitation of the plaintiff’s ability to seek
damages exist.

The only provision that discusses damages is the

following: “It is impossible to measure the monetary damages” to
the plaintiff “by reason of breach of any provisions contained
[within the covenant not to compete], and in that event of a breach
by Employee, [the plaintiff] shall be entitled to equitable relief,
including the right to enjoin any party in violation of this
agreement.”

ECF 38 Ex. 3.

That language does not limit the method

34

of recovery by the plaintiff when a breach occurs.
simply

provides

no

predetermined

amount

of

damages

Rather, it
that

defendant must pay when any breach, large or small, occurs.

the

Thus,

the plaintiff is not pursuing “unlawful” means as this Court
interprets the defendant is implying.

The defendant has failed to

satisfy her burden and thus, the plaintiff’s motion for partial
summary judgment regarding the defendant’s IIED counterclaim must
be granted.
C.

Defendant’s Supplemental Motion for Summary Judgement
As mentioned earlier, the defendant also filed a supplemental

motion for summary judgment.

ECF No. 76.

In her supplemental

motion for summary judgment, the defendant argues that she is
entitled to summary judgment regarding the plaintiff’s breach of
contract claim.

Specifically, the defendant asserts that the

plaintiff’s corporate policies in its employee handbook render the
contract at issue unenforceable.

The defendant points to language

in the handbook that it claims requires the CEO, COO, or CFO of the
plaintiff to sign all agreements pertaining to an employee’s
employment contract.

Further, the defendant also claims that the

plaintiff’s acknowledgment form provides a similar requirement.
According to the defendant, the contract was signed by none of
these allegedly necessary parties.

Therefore, the contract is

invalid and the covenant not to compete is unenforceable.

Thus,

because of a lack of mutual assent, the defendant argues that this

35

Court should grant her supplemental motion for summary judgment.
The three arguments, regarding the handbook, the acknowledgment
form, and a lack of mutual assent, are separated and discussed
below.

For the reasons set forth, the defendant’s supplemental

motion for summary judgment is denied.
1.

The Employee Handbook

Notwithstanding this Court’s determination that the contract
is valid and the covenant not to compete is enforceable, this Court
will still address the defendant’s additional arguments to the
contrary.
The

defendant

points

to

the

following

language

in

the

plaintiff’s employee handbook:
No employee of [the plaintiff] other than the President,
CEO,
COO
or
CFO5
is
authorized
to
make
any
representations, promises or agreements concerning an
employee’s (i) terms of employment; (ii) compensation; or
(iii) benefits which will differ from the terms of this
Handbook. Any such representation, promise or agreement
shall only be enforceable if it is in writing and signed
by the President, CEO, COO or CFO.
ECF No. 76-4. In light of this language, the defendant argues that
only the executives listed above could bind the company on matters
of employment or represent its terms.

Thus, because only the

defendant executed the contract, and because none of the listed

5

It should be noted that “CEO” means Chief Executive Officer,
“COO” means Chief Operations Officer, and “CFO” means Chief
Financial Officer.
36

high-level executives signed the contract, the contract is invalid
and thus the covenant not to compete must be unenforceable.
The

plaintiff

inadmissible.

first

responds

that

the

handbook

is

Second, the plaintiff asserts that the defendant

failed to cite to the language preceding the statement that she
relies on.

Specifically, the handbook also provides the following

in a paragraph that precedes the portion the defendant relies on:
The contents of this handbook are presented as a matter
of information only and this handbook does not create a
contract. None of the benefits or policies contained in
this handbook are intended by reason of their publication
to confer any rights or privileges upon you, or entitle
you to be, or remain, employed by [the plaintiff].
Id.

Therefore, under the same language provided in the handbook,

the plaintiff claims that the handbook carries no weight regarding
the validity and enforceability of the contract at issue. In the
alternative, the plaintiff also argues that the handbook language
relied

on

by

the

defendant

only

applies

when

the

terms

of

employment differ from the terms in the handbook. In particular,
the handbook provides that “terms of employment . . . which will
differ from the terms of” the handbook require the signature of a
named

top

executive.

However,

the

plaintiff

claims

that

the

defendant has failed to demonstrate how the covenant not to compete
differs from the terms of the handbook. Because no difference
exists, no signature by a named top executive would be necessary.
For those reasons, the plaintiff argues that the defendant’s motion
should be denied.
37

Under West Virginia law, employee handbooks have been found to
form the basis for a unilateral contract “if there is a definite
promise therein by the employer not to discharge covered employees
except for specified reasons.”
342 S.E.2d 453 (W. Va. 1986).

Syl. Pt. 6, Cook v. Heck’s, Inc.,
However, “[a]n employer may protect

itself from being bound by any and all statements in an employee
handbook by placing a clear and prominent disclaimer to that effect
in the handbook itself.”

Syl. Pt. 5, Suter v. Harsco Corp., 403

S.E.2d 751 (W. Va. 1991).
This Court agrees with the plaintiff’s latter arguments.
Regarding the admissibility of the handbook, this Court notes that
the handbook is admissible pursuant to Federal Rules of Evidence
801 and 803.

Concerning the text of the handbook, it is clear that

the text the defendant relies on does not make the covenant not to
compete unenforceable.

The handbook explicitly provides that it

does not “confer any rights or privileges upon you,” and that the
contents of it are “presented as a matter of information only and
. . . does not create a contract.”

The handbook does not appear to

actually require the named top executives of the company to
negotiate every contract and sign every contract for every single
employee in the company.

Further, the phrase in the handbook that

requires

“benefits which will differ from the terms of this

Handbook”

to

be

signed

by

a

top

executive

in

order

to

be

enforceable also fails to attack the validity of the employment

38

contract.

Based on the portion of the handbook that the parties

cite to and have provided this Court to analyze, the defendant
presents

no

evidence

that

the

covenant

not

to

compete

and

employment contract differ from the contracts provided to the
plaintiff’s other employees. In the email dated June 22, 2012, the
covenant

not

to

compete

was

referred

to

as

“standard.”

In

addition, Whitman stated in his testimony at the hearing on the
preliminary injunction that the covenant not to compete and the
employment contract at issue were both used in the regular and
“normal course of business.”

ECF No. 38-9 *11-14.

Aside from the terms of employment for other employees, the
defendant also fails to demonstrate how the covenant not to compete
at issue differs from the terms of the handbook.

Even if the terms

of the handbook were binding, the covenant not to compete does not
differ from the portion of the handbook provided to this Court by
the parties.
difference.

The defendant provided no indication of such a
Because the handbook policy allegedly contains no

covenant not to compete, the defendant claims a difference exists
between her terms of employment and the handbook.
signature of a top executive would be necessary.
defendant’s argument is without merit.

Thus, the
However, the

The handbook requires the

signature of a top named executive when a difference between an
employee’s terms of employment and the handbook exist.
handbook

contained

a

covenant

not

39

to

compete,

and

If the
then

the

plaintiff required the defendant to sign a covenant not to compete
with different terms or limitations, that would be a difference
under the handbook.

Or, the same could be said if the handbook

prohibited the use of covenants not to compete and then the
plaintiff required the defendant to execute such a covenant.
this case, that does not exist.

In

The handbook neither contains the

terms of a covenant not to compete nor prohibits the use of such
covenants. The covenant not to compete that the defendant executed
does not differ with any terms of the handbook.

Further, the

handbook also contains an underlined clause that states that
“[m]anagement, at all times, reserves the right to act apart from
the procedures set out in this Handbook.”

Thus, even if the terms

of the handbook were binding, the signature of a top executive
would be unnecessary.
Further, pursuant to West Virginia law provided above, the
handbook contains a large and obvious disclaimer, quoted above.
The disclaimer is in bold letters.

The portion of the disclaimer

that disclaims the handbook from creating any contract is in all
capital letters.

The disclaimer in this civil action is very

similar to that described in Suter v. Harsco Corp. The handbook is
clearly nonbinding based on its own text and provisions, and its
disclaimer satisfies the requirements under West Virginia law.

40

2.

The Acknowledgment Form

The defendant also claims that the plaintiff’s acknowledgment
form provides that only certain named high ranking corporate
officials have authority to enter into any employment agreements.
According to the defendant, the contract was signed by none of
these allegedly necessary parties.

Therefore, the covenant is

unenforceable.
As described above, although a unilateral contract can form by
promises made in an employee handbook, West Virginia law provides
that “[a]n employer may protect itself from being bound by any and
all statements in an employee handbook by placing a clear and
prominent disclaimer to that effect in the handbook itself.”
Suter, 403 S.E.2d at Syl. Pt. 5.
The acknowledgment formed, which is signed by the defendant,
pertains to the contents of the employee handbook.
nearly identical disclaimer at the top of the form.

It provides a
However, it

does provide a provision that reads: “No [representative of the
plaintiff], other than the President, CEO, CFO or COO, has any
authority

to

specified

period

contrary.”
“no

enter
of

into

any

time,

or

agreement
to

make

for

employment

any

agreement

for
to

a

the

Again, this form provides a disclaimer that provides

employment

rights

are

conferred

upon

employees

by

this

handbook,” and that the statements and policies of the handbook “do
not constitute a promise that they will be applied in their

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entirety in all cases.”

The disclaimer essentially provides that

the handbook policies are just that, policies, and do not confer
contractual rights to the employee. Pursuant to West Virginia law,
the plaintiff again provides the disclaimer that prevents it from
being bound by the terms contained within the handbook, which
includes the acknowledgment form.

Like the handbook discussed

earlier, the acknowledgment form contains nonbinding provisions.
3.

Lack of Mutual Assent

Finally, the defendant argues that because the covenant not to
compete at issue fails to have the signatures of the executives
listed in the handbook and acknowledgment form, a lack of mutual
assent exists.

Therefore, the defendant claims that the contract

should be found invalid and thus the covenant not to compete would
be unenforceable.
Notwithstanding

that

this

Court

has

determined

that

the

language of the handbook and acknowledgment form fail to affect the
validity of the contract, West Virginia law clearly requires mutual
assent to form a valid contract.

Ways v. Imation Enterprises

Corp., 589 S.E.2d 36, 44 (W. Va. 2003); Wheeling Downs Racing Ass’n
v. West Virginia Sportservice, Inc., 216 S.E.2d 234 (W. Va. 1975).
As further provided,
In order for this mutuality to exist, it is necessary
that there be a proposal or offer on the part of one
party and an acceptance on the part of the other. Both
the offer and acceptance may be by word, act or conduct
that evince the intention of the parties to contract.
That their minds have met may be shown by direct evidence
42

of an actual agreement or by indirect evidence through
facts from which an agreement may be implied.
589

Ways,

S.E.2d

at

44

(internal

citations

omitted).

More

importantly, mutual assent does not require all parties to sign the
agreement.

Rather, “one party may waive such execution by all

other parties by accepting performance or by otherwise indicating
that the signature of all parties is not a prerequisite to a valid
contract.”
2571287,

Kemboi v. Ocwen Loan Servicing, LLC, 3:11CV37, 2012 WL

at

*7

(N.D.

W.

Va.

July

2,

2012).

Further,

the

requirements provided under the statute of frauds are satisfied
with only the signature of the party to be charged.

Hamrick v.

Nutter, 116 S.E. 75 (W. Va. 1923).
Under the facts of this case, mutual assent clearly exists.
This Court has already confirmed that the offer and acceptance have
been satisfied.

However, the defendant argues that the handbook

and acknowledgment form provisions require a signature by the
executives and the defendant in order to be valid and satisfy
mutual assent.

Although this Court already determined that those

requirements do not apply to the contract and covenant not to
compete at issue, even if they did, the party to be charged, the
defendant,

signed

the

contract.

The

defendant

“waived

such

requirements,” as provided under Ways v. Imation Enterprises Corp.,
by accepting the employment with the plaintiff, which she engaged
in for over a year after acceptance.

Further, she signed the

employment contract and the covenant not to compete, as well as the
43

acknowledgment form, indicating that she is clearly the party to be
charged.

Accordingly, mutual assent existed.

Thus, this Court

again finds the contract valid and the covenant not to compete
enforceable.
V.

Conclusion

For the reasons provided above, the defendant’s combined
motion to correct and motion for summary judgment (ECF No. 73) is
DENIED.

The plaintiff’s motion for partial summary judgment (ECF

No. 80) is GRANTED.

The defendant’s supplemental motion for

summary judgment (ECF No. 76) is DENIED.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein. Pursuant to Federal
Rule of Civil Procedure 58, the Clerk is DIRECTED to enter judgment
on the defendant’s counterclaims of economic duress and intentional
infliction of emotional distress.

Because this Court has granted

the plaintiff’s motion for partial summary judgment, the issue of
damages remains to be resolved at trial.
DATED:

December 2, 2014

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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