As you know, I am hooked on this show. Forgive me. I know that it is trash television. Well, I caught the last episode and it contained a plenty of legal drama that I could discuss here on the blog. If nothing else, this trash television gives me plenty of ideas for you to read about.
The first “legal” issue that came up was the new suit that was filed by Paul Sr. against Paul Jr. According to what I could glean from the show, Paul Sr. is suing Paul Jr., Paul Jr. Designs and and employee of Paul Jr. Designs for misappropriating trade secrets and violating a non-compete clause. Paul Sr. came to the conclusion that Paul Jr. and the employee are using Paul Sr.’s trade secrets in the operation of Paul Jr. Designs because Paul Jr. built a motorcycle for a former client of Paul Sr.’s company… Orange County Choppers.
In California, you cannot be found liable for misappropriating trade secrets your former employers trade secrets unless you actually use your former employer’s trade secrets… assuming that the former employer actually possessed a “trade secret”. Thus, if the lawsuit was venued in California. Paul Sr. would have to prove that he owned a trade secret, that Paul Jr. took that trade secret, and used Paul Jr. used that trade secret for his advantage. In watching the show, I gathered that Paul Sr. found out that Paul Jr. was building a motorcycle for a former client, so he assumed that Paul Jr. used his knowledge of OCC’s clients to make the connection and ultimately build the motorcycle for a profit. Paul Sr. will need more evidence if he is going to prevail at trial… at least if he were in California.
Also, I found a nugget buried in the lawsuit issue pretty interesting. The PJD employee is a former employee of OCC. He is being sued for violating a non-competition provision. Obviously, I do not have a copy of the contract in front of me. However, non-competition provisions generally prevent persons from engaging in the same line of business as the employer for a certain period of time and in a certain area. In California, non-competition provisions are commonly held unenforceable between and employer and an employee. The only way to support a non-competition provision in California is through the sale of good will. In other words selling a business. That being said, if Paul Sr. were trying to enforce the non-competition provision here, it would likely be deemed unenforceable.
The second issue that came out of the show was that it was disclosed that the bank is foreclosing the OCC headquarters. As you can imagine, Paul Jr. found this pretty entertaining… Paul Sr. can afford to fund a lawsuit, but he cannot pay the mortgage on his corporate headquarters. I did a little research into this and found that Paul Sr. stopped paying on the mortgage, so that he could leverage the bank into giving him a better mortgage payment. Apparently, it didn’t work as the bank is now foreclosing. Even more interesting… Paul Sr. got the land to build the OCC headquarters through a redevelopment project that included various tax breaks. I am sure that the people of State of New York will be happy to hear about this foreclosure. You can read a local article HERE .