It’s been about six months since Microsoft launched Vista and complaints over what doesn’t work with the program are beginning to outweigh the positive buzz that once included statements of improved desktop search, security and graphics.
Upgrade to XP
Vista now ships with most new computers, therefore it will become the world’s most dominant PC operating system at some point. However, many users for now are ditching Vista and upgrading to XP.
Many of these early complaints from a variety of users may threaten Microsoft’s supremacy in operating systems. Research shows that the various different types of Windows operate 93 percent of PC computers worldwide. Additionally, last fiscal year, Windows sales topped $44.3 billion, roughly one third of Microsoft’s overall revenue.
As Expected
Vista, however seems to be moving along as expected based on sales as many business and consumers switch over when replacing old hardware. Al Gillen, an IDC analyst states that Vista will be on the vast majority of PC’s in approximately five years, which is the same time it took XP to be on 84% of computers.
At this point, it’s too early to know how many people are using the operating system, Vista. It’s also hard to gauge its success against XP because the PC market has grown exponentially in the last six years.
Battle Ahead
A tremendous battle lies ahead with Windows Vista because Vista interacts differently with peripherals and programs than previous versions of Windows. Additionally, many companies have opted not to spend money and time updating older products.
Consumers are disappointed and continue to rant about a wide variety of issues with the OS. The most common problem concerns Microsoft’s user account control feature. This feature is designed to protect unknowing Web surfers from viruses and spyware that would install themselves on the hard drive. Users get frequent pop up windows warning of potential internet threats and often switch the control feature off. After it is switched off, they get pop ups warning the user that turning off the feature is dangerous. Annoyingly irritating!
In Summary
There’s no demanding reason to buy Vista especially considering the complaints. Therefore those of you with Vista, stop the frustration and upgrade to XP in order to enjoy your PC again!
The iPhone’s solid start can be attributed to a number of things from technology to marketing to Jobs, however savvy investors must sell their Apple stock now and invest in Google and this is why:
Google Benefits Most
Everyone believes that the iPhone will revolutionize the mobile internet, however Google stands to benefit as much, if not more from the mobile Web opportunities than Apple. Arnie Berman, the chief technology analyst at investment bank Cowan first commented on this reality prior to the iPhone’s launch.
Berman stated that, “At this stage we would rather commit fresh capital to stocks that have not already been bid up in paroxysms of excitement over the ‘mobile Internet. Berman went on to say, “Apple shares have already benefited from a powerful hype cycle. In the months to come, Google is the much stronger candidate to benefit from a hype cycle whose DNA is similar to the one that has propelled Apple’s share price to dizzying heights.”
Monetization of Search Traffic
The statements made by Berman and now echoed throughout the technology community indicate that if an increasing number of people use their mobile phones to access the Internet, Google becomes the ultimate winner because Google will be able to significantly monetize the increased mobile search traffic. Even sweeter for Google is that Google does not have to invest in hardware or partner with carriers. Google will win as people use their phone whether it is a Motorla, Palm, Nokia or Blackberry.
Berman went on to state that “google’s ability to capitalize on the emergence of a pervasive high bandwidth mobile Internet is much more assured than Apple’s ability to do so,” Berman also pointed out that “the hardware business is inherently more unpredictable than the atomistic revenue streams associated with search. In our view, Apple remains a hits company. In fact, Apple is just one product cycle miss away from being treated with all the love and tenderness institutional investors reserve for Motorola.”
Google More Profitable
Examining the financial trading also shows a greater potential for Google considering Google and Apple are currently trading at the same price to earnings ratio. This ratio is approximately 33 times earnings estimates for the upcoming four quarters. Berman, says that this fact defies logic because Google is a much more profitable company and is growing much faster than Apple.
Google and Apple should not be trading at the same valuations. As Berman points out, Risk, Growth and Return are of paramount importance for corporate financial performance. Google destroys Apple in two categories including enormously exceptional growth and a much less risky overall business model. Regarding the third category, Return (measured using both ROE and ROA), Google defeats Apple again, by a slightly smaller degree.
The iPhone Effect
Another key point made by Berman is that the iPhone hype has had a ridiculous positive affect on Apple’s stock. In fact the majority of Apple’s appreciation during the past two months was directly because of the iPhone. This hype resulted in Apple’s stock price increase and added roughly $24 billion to Apple’s business enterprise value. The enterprise value is equal to a corporation’s market value minus its liquid cash but including preferred stock and debt.
Taking Berman’s statements and applying them to practice indicates that the market believes that the iPhone is worth $24 billion in overall value to Apple’s stock and therefore the iPhone is worth approximately two thirds as much as Motorola and a third as much as Nokia. Therefore, even if Apple reaches its goal of placing 10 million iPhones in the market by the end of 2008, which could happen, this still would not justify the stock’s increase.
The iPhone will hardly have a significant impact even in the most optimistic situation for Apple because Motorola and Nokia have a global relationship with consumers. Motorola and Nokia have reported that they will ship a combined total of over 650 million phones in 2008. Therefore no matter how successful the iPhone is, in order to have a similar valuation of Nokia or Motorola, Apple would need to sell at least 600 million iPhones over the next five years. This will not happen.
In Summary
Personally, I do like the iPhone, but as most believe it is over hyped. As usual, Apple has done a great job marketing and promoting the product. I don’t believe that the iPhone will revolutionize the mobile market place, but I do believe there will be some improvements overall. Additionally, as pointed out there are much better places to place your money and invest for success like Google.
In 2006, Apple CEO, Steve Jobs whose official executive salary form Apple was $1, earned approximately $646 million dollars in compensation from Apple. Whereas, Forbes 2nd richest man in the world, Warren Buffet, with an estimated net worth of over 40 billion dollars, earned $100,000 as an executive salary. How are these figures determined and what does executive compensation consist of is a common question. Generally speaking, executive compensation is the keyword for how top executives of business corporations are paid.
Compensation System
Generally speaking, the compensation and salaries of every executive employee are decided by the company owners through the board of directors and the management team.
Means of Compensation
In executive compensation, there are five basic tools used to compensate and reward executives in various United States Organizations. These five basic tools include: (1) base salary, (2) short-term incentives, (3) long-term incentives (generally referred as (LTIP)), (4) employee benefits and (5) perquisites (perks). In most typical modern United States corporations, the CEO and other high level executives are paid a considerable salary plus short-term bonuses and incentives. Total Cash Compensation (TCC) is the term generally used to refer to the total compensation package.
The combination of the different options is referred to as Total Cash Compensation (TCC). Short-term incentives are generally formula-driven and have some sort of performance criteria attached to them depending upon the role of the executive. For example, within the corporate environment, the Sales Director's performance related bonus may be somewhat based on incremental revenue growth turnover; however, a CEO's salary could be based on revenue growth and incremental profitability.
Bonuses paid to employees are after-the-fact (not formula driven) and most often discretionary. Executives can also be compensated with a mixture of shares in the company and cash which are almost always subject to some type of vesting restrictions (a long-term incentive). For a bonus to be considered a long-term incentive the measurement period of that payment must be in excess of one year however, 3-5 years is common. The vesting term of that payment refers to the period of time before the recipient of the bonus has the right to transfer shares and realize any type of value. Vesting can be based on performance, time, or both. For example a well paid CEO could get 1 million in cash, and 1 million in company preferred shares (and / or share buy options).
Perquisites ("perks")
Other common components of a true executive compensation package can include such perks as health insurance, generous retirement plans, a chauffered limousine, interest free loans for the purchase of a housing, an executive jet, etc.
Fortune 500 compensation
Most common, about half of Fortune 500 CEO compensation is in bonuses and cash pay, and the other half of the compensation package is in restricted stock, and gains from exercised stock options. This information comes according to Forbes magazine. Forbes magazine recounted the 500 CEOs compensation to be roughly $3.3 billion during 2003 (which makes $6.6 million a piece). However this figure includes gains from many stock call options used; these options may have been rewarded many years before the option to buy is actually used.
2006 CEO Compensation (millions)
The Top 10 CEO compensation packages of 2006 follow:
1. Steven P. Jobs, Apple - 646.60
2. Ray R Irani, Occidental Petroleum - 321.64
3. Barry Diller, IAC/InterActiveCorp - 295.14
4. William P Foley II, Fidelity National Finl - 179.56
5. Terry S Semel, Yahoo - 174.20
7. Angelo R Mozilo, Countrywide Financial - 141.98
8. Michael S Jeffries, Abercrombie & Fitch - 114.64
9. Kenneth D Lewis, Bank of America - 99.80
10. Henry C Duques, First Data - 98.21
Criticism
There are many criticisms and controversies regarding executive compensation:
Critics charge that many CEO's are highly overpaid for the services that they provide, however others believe that a quality CEO can have an enormously positive effect on the company's talent and performance. Therefore, a high compensation is necessary to attract and hire the best talent. Opponents and critics point out that because the CEO's pay is set by the board of directors and the CEO determines the board's tenure, selection and committee assignments, and compensation consultants, an inherent conflict of interest occurs and effectively prevents effective price competition.
Determining which CEO's are overpaid is an extremely complex issue. Many articles with an emphasis on high CEO pay only survey the CEO's who received the most overall money compensation in a particular year even though the majority of the compensation might be obtained from exercising options or selling stock that was obtained over many years and was not sold before. Also, many indirect corporate perks are generally not included in these figures.
Defenders of significantly high executive pay consistently state that the international war for talent and the rise and success of private equity firms is often attributed to much of the increase in executive pay.
In the past few years Drupal has become increasingly popular among the various content management systems. And this is not by accident, Drupal really packs a number of great features that allows virtually any type of site to do the things it wants to do. Whether your site be a blog, brochure company site, full blown social community, ecommerce shopping site, or an informational site for an organization Drupal has you covered.
The Drupal system is composed of a number of "modules" which allows you to quickly go through and turn on and off different options that you want your site to have. Drupal starts off as just a simple little web site that you can quickly add more and more features to by enabling modules of your choice.
The goal of this article is to cover some of the more popular and useful reasons why somebody would want to use Drupal for their website. Having developed many Drupal sites myself I have come across a number of things in Drupal that really accomplish the things that I'm wanting to do, and every once in a while I will find another new thing that I didn't know about and it just sweet.
Takes care of all the boring and repetitive tasks
Being a long time developer myself, I know how annoying simple things such as form validation, input filtering, spam prevention and things like this can be. I think a lot of the time people really underestimate the power of Drupal. This system is the result of over 5 years worth of web sites being re-worked over and over by very talented and capable developers. Through this process of re-creating and optimizing bits and pieces of code the end result begins to become very dialed in with lots of features and options. Drupal is able to built up a solid foundation for these repetitive and boring tasks and make them integrate very quickly due to the solid core system of libraries and modules that are created.
The Administration Panel
The administration in Drupal is extremely powerful and feature rich. From this section you can control virtually all aspects of your Drupal site easily and efficiently. There are a number of logging reporting features that display information such as the number of visitors, what sites your visitors are coming from and a list of all the errors, should any occur.
Forms
Creating forms in Drupal is really amazing. Whether you're a developer or an administrator, it is super easy to create a form with the type of functionality that you need.
For developers Drupal has a very well constructed and documented forms API. This allows you to quickly create a form that is able to be validated and processed without any hassle.
For site admins there is a fantastic module called the Webform module that allows you to create virtually any type of form with any options you want. All this data will be collected and then written and stored on the database and emailed wherever you would like. This is an extremely useful module.
Oh, and need I mention that these forms are all very secure and prevent a lot of spam and security holes.
Input Filtering
By default Drupal filters all the content that is submitted to your site from forms. By disallowing and stripping out certain HTML code Drupal keeps your site secure from various attacks that are commonly used to exploit and damage sites as well as keep out some spam.
Search
Granted your sites search feature will probably never be as good and effective as Google, the Drupal search feature that is built in is just about as solid and functional as a web site search feature gets. The Drupal search will go through and crawl every node on the site and index the words in a table on the database. The admin then has the option to choose how to weight certain aspects such as keyword density, number of comments, creation date and things like this. By tweaking these parameters you are able to make your search feature more accurate for your users.
Caching
Drupal has a great cache feature that allows for very large and high traffic sites to cut down the number of database queries. On some sites it can become common to have up to 1,000 or so queries for each page view. This high number of queries can quickly start slowing a website to a crawl, especially a site with a substantial amount of traffic. With Drupal, there is a built in caching feature that will essentially store all the data from the "rendered" page into the database. This will change the number of queries from 1,000 to 1 which will improve performance considerably. You can then choose to refresh the cache data whenever you want to such as every 5 minutes, 20 minutes or every hour.
Security
Because of the tight and clean coding done on the core system, Drupal is naturally very secure. Should there be a new security vulnerability that is found, Drupal will immediately be updated with a new version to fix this problem and be open for you to update your installation with these fixes.
Usability & Accessibility
Due to the nature of how Drupal operates, sites are almost somewhat forced to be more usable and accessible. Usability is usually the result of a well thought out web site and Drupal sites are well thought out by default. Drupal sites are also very accessible as they mark links, images and other pieces of HTML with the proper title and alternative attributes that allow people with disabilities and different types of browsers to still access your site.
Web 2.0 and Social Features
Drupal includes many new social and community oriented features that are becoming more and more popular for web sites these days. It is now much more common to have a participating community that contributes and helps out with the web site.
Users
Drupal allows for users right out of the box. People are able to register and become a part of your site. There are many benefits to having users on a site. Users can now contribute new content just as an administrator would. Users can receive emails and updates about new features and events. Users can talk with other members on the site and learn from them and share ideas. By having a user base you allow your site to become a network of people that all share a common interest in a given topic. It allows for your site to have much more to offer for visitors.
Permissions
With Drupal you can create different "roles" which are basically groups that you want to assign users to. For example, you can have a role for things like administrators, moderators, editors and things like this. You are then able to go through and assign permissions for each role. You could make it so many moderators can administer the forums while editors can only administer the articles. You can then assign any user to any number of roles. They can be just one role, or they can be multiple roles.
Forums
Drupal has a built in system that allows users to create forums and have discussions with members from the community. Drupal's forum system builds off of some core Drupal features such as taxonomy and nodes. A lot of people usually say the Drupal forums are kind of weak and need a lot of work to make them look like popular forums such as vBulletin or PHPBB. While this is true to an extent, at the same time the typical vBulletin forum look isn't really as popular as it used to be. A lot of the more popular sites these days have much more simple looks and a lot less clutter. Look at forums on some of the more popular sites. Forums aren't really supposed to be the purpose of a site - they should simply be an extension of a solid web site that has many other features and options. The problem with systems like vBulletin is that they ARE solely a forum and nothing else.
Comments
Drupal sports a built in commenting system that allows visitors to comment on any node created within Drupal. Comments have a number of administrative options such as allowing only registered users to comment, how many comments to show per page, how to order comments, whether or not to have threaded comments and things like this.
RSS Feeds
As I'm sure everybody knows by know, RSS Feeds and subscription based content is becoming increasingly common and popular on the Internet. It is now very common for people to aggregate data from a number of web sites into one central location for reading and staying up to date. Drupal has many built in options for creating various feeds of content.
For instance, every piece of content that is promoted to the homepage may be accessed from the main site feed. You can take the feed system even further and have feeds for only certain categories of content that are created through taxonomy. This way if somebody only wants to subscribe to posts of a certain category, they have that option as well.
Javascript Widgets
Drupal ships with quite a few useful and cool javascript widgets which can increase the user experience. Drupal includes the complete jQuery javascript library which allows for easy integration of javascript through your site. It also comes out of the box with some more popular javascript features such as AJAX, which allows for data to be sent to and from the server without actually having to reload the complete page.
SEO
Drupal is very SEO friendly out of the box. It includes a number of things that really make it SEO friendly and I will hit on a few of the more important of these features.
Titles
Every node has a title that pretty much says what this article will be about. Everybody who has done a little bit of research on SEO knows that the title tag is one of the most important aspects of SEO. By default, every node you create on Drupal will have the node title as the title that appears in both the title tag and in the main heading tag of your theme. This small piece can have a huge effect on search engine rankings, especially with a well-researched title.
Clean URLs
Drupal has the ability to allow for clean URLs right out of the box via the path module. This option enables any node to have a custom keyword rich title that is easy for both users and search engines to follow. By adding on another popular module called the pathauto module, you can have Drupal automatically create URLs of your choice based off a number of parameters such as the user who submitted it, the date it was submitted, the title of the article and things like this.
Internal Link Structure
The internal link structure of Drupal is very friendly. All of the pages on Drupal are very well constructed as there are usually categories which contain small pieces from the main articles. On these category pages you can then click through and view the permanent page for the content.
The hierarchy of this structure is built out so that all your content is structured like a tree. New pages will link up to more important sections which themselves link up to even more important sections. By following a structure like this it allows for link equity and PageRank to flow through your web site correctly.
Lightweight, optimized HTML with heavy use of CSS
Drupal relies heavily on CSS for theming as most sites do these days. By handling all the theming aspects via CSS it allows the HTML to have little if any theming in it itself which takes out all the unnecessary clutter and allows for a much better indexing of content. The content stands out much more now because there are less things like images and common code appearing on every page that may confuse the search engines.
Robots.txt
Drupal also comes out of the box with a robots.txt file that disallows search engine robots from certain files that should not be indexed such as submission pages, search pages, forms and things of this nature. By using a robots.txt file it allows for your link equity to stay on the more focused and important pages and not be wasted on extraneous pages that have little value.
Categorization
The categorization on Drupal is very open ended and scalable. Drupal's categorization system is known as taxonomy. Taxonomy is basically a more advanced way to say categories, it means the same thing pretty much. With Drupal you are able to assign different categories to each node that you have. In these categories, you can then add different terms that describe what the content is about.
For instance, say you have a Blog. In this blog you would most likely split up your content into different categories such as political, Internet, music and whatever else you want. As you created more and more content, Drupal would then automatically create a page that shows all the political articles or all the Internet articles.
With Drupal you are able to go through and create unlimited categories for each type of content. It is totally possible to have 10 different categories for each piece of content.
Theming
The Drupal theming system is very well constructed and thought out. It consists mainly of 3 main components, your page, nodes and blocks.
Page
The main page template file handles the core theming of your user interface. The basic look and feel of your site can all be easily modified here.
Node
The node template handles all of the content of the site. Pretty much every piece of content that is contained within your interface can be themed here.
Block
The block template handles all of the side widgets, navigation and bits of information. Things like new forum topics, recent comments, recently added pictures and things like this can be added to blocks and arranged in different places in your theme.
Theme over-riding
Drupal also has some more advanced theming features such as the ability to over-ride themes created by the core Drupal system. For example, by default Drupal themes the user page a certain way. This user page is created in a core user module. With most content management systems, the way this core file operates would be how it is and there wouldn't be much you could do about it. But that is definitely not the case with Drupal! With Drupal you can easily take any themed part of Drupal and theme it the way you want to and your custom theme will over-ride the main Drupal one. When Drupal goes to theme a certain part of the site it will first check to see if anything is over-riding the theme and if so, it will use that one instead of the default theme. It's extremely powerful.
Scalability
I think Drupal really does a phenomenal job at handling scalability. When trying to extend on to a lot of other systems you will often find yourself getting stuck and hacking up code to find ways to get something to work. The system usually has a lot of pre-set operations that make it very hard to customize. With Drupal this is never the case. The core code of Drupal does a great job at only handling aspects of the site that are needed for customization. Everything that the end user sees is fully customizable, all the way down to the HTML.
Great community
The Drupal community is always moving forward and never just sitting around stagnating not knowing what to do. In fact, sometimes I think they move too fast, but this is a great thing. There are always so many people just driven to really constantly improve Drupal to be better and better. And as a result of this your web site will continue to follow with the constant innovations and advancements with Drupal for many years to come.
Conclusion
Overall, Drupal does a great job of providing solutions for whatever type of web site you are looking to create. Drupal has a great selection of contributed modules to choose from and allows for complete customization of everything that it does. Whether you are an Internet novice or an advanced developer, Drupal does a great job at offering something for everyone.
So the next time you're thinking about creating or updating an existing web site you should consider Drupal as I'm sure you will be completely pleased with everything it has to offer.
In the last few months Google has been constantly re-vamping and modifying their Video Search. With the increase in popularity of video on the Internet it is no surprise why.
About 6 months back Google used to display results that only would list video which had been uploaded with Google. This is a bit of an interesting stance to take on video and can be somewhat limiting as you'll soon find out. Fortunately, Google is usually pretty wise about these types of things and later decided to make the $1.65 billion acquisition of YouTube.
About a month after this purchase Google made the move of including both Google and YouTube videos in the Google Video search results. This made Google Video search the best video search as it now had about 2/3 of the total online video market showing up in their search results.
However, Google video still had the fundamental flaw of the Internet which is not maintaining their independence of everything. They were still too tied into only showing their side of the Internet and not the WHOLE Internet as their regular web search does.
As you can see, this is a very important aspect of Google maintaining on top and as of about a month ago Google finally made the move of including videos besides just that of Google and YouTube. Google is now one of the best search engines for video as you will find that it includes video from sites outside of just its network. It is common to find videos from MetaCafe, LiveVideo and other popular video sharing sites.
This is a very smart move for Google as it continues to make the user experience much better as they are now able to get connected to information easier and faster than ever. I would suspect Google to have many more tricks up their sleeves with video search in the very near future as this is an extremely large market for them.
National tragedies often come as a surprise and eradicate or destroy all types of businesses. Hurricane Katrina and September 11, not only had enormous emotional impacts on the lives of many, the tragedies destroyed established businesses and entrepeneurs dreams alike. We certainly cannot predict the next national or international tragedy, therefore how do we protect our business interests if we should fall victim to a devastating event. Most business owners that I researched whose primary business was ruined by these events, had other business activities to fall back on and many were able to build a new, thriving business because of the support, their other business opportunities provided.
Remember it does not take a catastrophic event or a national tragedy for one devastating event to have a major impact on a company, your company. In my vast research, I have seen many businesses and entrepeneurial opportunities devastated or terminated because the business lost one key supplier or customer.
The former CEO of Intel, Andrew Grove once said, "Only the paranoid survive." Though I do not necessarily believe that quote, I do believe that a business must be aware of its overall viability and must assess what the loss of any one customer would do to their businesses overall financial well being. Perhaps this is paranoia. I think this isn't paranoia, however it is prudence, planning and preparation.
We are serial entrepreneurs and it is inherent in entrepeneurship to take risks. However your risks should be prudent, planned and prepared for and strategically diversifying yourself along the way, will enable you to mitigate some of those inherent risks.
Reducing your overall exposure to one catastrophic business nightmare or even an overseen business mistake is best achieved by the following:
1. One primary rule in business is to never get too dependent on one customer or supplier.
I know that if you have a very large and profitable customer, it can be easy for that one customer to become your entire business. However, what happens when this customer switches to another supplier, suffers a setback in business or simply chooses to work with another company.
That big customer was a blessing at the time, however now the departure of that customer may lead to bankruptcy. Therefore, while garnering a great income from that customer, you must grow your business and diversify or broaden your customer base. Additionally try to save money in case that beneficial customer leaves you.
2. Don't ever get too dependent on one sole supplier.
Being involved with one supplier can effectively crush a business overnight. I was reading a story of a man who imported highly desirable dental equipment from overseas. One day, a shipment was late and he attempted to contact his supplier who informed him that it had become too costly to export overseas. His customers simply moved their orders to his competitor and he lost everything.
There are situations where businesses depend on one supplier, however it is now time to start diversifying your supply chain. There are other suppliers of your product. Do the necessary research in order to ensure that you are not the mercy of a supplier who decides to not serve you anymore.
3. Never become dependent on one income stream.
This is perhaps the most beneficial piece of advice and the one that most companies and people must solve fast. Ask yourself if more than 80% of your revenue comes from one service or product. If the answer is yes, you must now take the opportunity to start developing additional services or products.
In a perfect world and even in this one, your additional income stream will be a complement to what you are doing now. For example if you are making vegetarian horse food, you should look into vegetarian dog and cat food as well as other horse related products.
4. Do not get overly dependent on one distribution channel.
There are numerous examples of distribution companies being acquired by another company and these ceasing all distribution channels with former suppliers. Again, take the time now to look into other distribution channels.
Prudent, Planned and Prepared diversification is an ideal strategy for business survival and success. Warren Buffet has stated that "You must put all your eggs in one basket and watch it closely." Buffet's statement is akin to building one business at a time and staying focused, however how big that basket is and what that basket entails is open to interpretation. As Buffet is highly diversified, his business practices clearly indicate that in order to survive and truly flourish in business you must not put all your eggs in one basket and diversify to grow and avoid potential tragedy.
After facing the daunting task of litigating the enforceability of a non-competition agreement signed by a partner of MarvQuin, we wrote an extremely informative letter / article on Non Competition Agreement Laws in Arizona. In order to share our information and research with as many people as possible we have decided to write an article on invalidating non-competition Agreements in California Law. When delivered a letter expressing a former employers attempt to enforce a non-compete agreement or even further being served with a lawsuit for breach of a non-compete agreement do not panic. Understand that the law is always in your favor when it comes to non-compete agreements and that with a simple understanding you can get out of your non-competition agreement. This article specifically pertains to California law which is one of the least flexible states in terms of enforceability of the Covenant Not To Compete.
California Business and Professions Code section 16600 explicitly states: "Except as provided in this chapter, every contract by which anyone is restrained from engaging in lawful profession, trade or business of any kind is to that extent void."
By the explicit language of the California Business and Profession Code, it would seem that all non-competition and covenant not to compete agreements would be void as a matter of law. However chances are if you are reading this blog, you are an employer seeking to have an employee sign an agreement or seeking to enforce an agreement against a former employer. On the other hand, you may be an employee seeking information on how to get out of your non-competition agreement or covenant not to compete. Companies spend nearly billions in California alone to enforce non-compete agreements because despite what the explicit law states, businesses, employers, employees, and entrepeneurs have opposed interests and rights in this area of labor law.
Budding entrepeneurs and employees in California often argue that Business & Professions Code Section 16600 is quite simple and straightforward and explicitly voids in California any contract term that prevents the employee from working for a competitor or him or herself. Specifically, restrictions in any way on the employee's right to work as an entrepeneur or for a competitor are illegal as a matter of law and cannot be enforced.
The explicit language of the California Business & Profession Code Section 16600 would suggest this approach, however the issue becomes unclear if the employee had access to confidential or proprietary information. Section 16600 of the California code does not give a fired or resigning employee an unrestricted right to do whatever he or she wants such as using misappropriated information to compete against the former employer or giving that misappropriated information to your ex-employer so that he / she can benefit from the information.
Employers and companies argue that while California's Business and Profession Code appears extremely restrictive as a "Right to Work" statute, it clearly permits reasonable contracts or agreements to protect an employer's proprietary or confidential information. Examing the law from the surface, this is a true statement of law.
The companies concerns are valid because since the beginning of time, there have been dishonest former employees stealing a company's ideas, techniques, methods and precesses in order to use them to establish their own business. However despite each company's concerns, most companies in all states act dishonestly and employ methods to squash lawful competition by attempting to enforce these agreements.
Typically, a company is often willing to invest huge sums of money for the preliminary battles over a non-compete agreement regardless of the merits of a dispute, because typically, the employee or new start up does not hav ethe means to fully finance a protracted legal battle over the enforceability of a non-compete agreement. However an employee must not fear a potential legal battle, many battles can be averted with a simple letter explaining the sides and terms of the non-compete situation. Additionally, courts are generally quick to toss out frivolous claims and assess penalties against Plaintiff's pursuing frivolous claims.
With that background, let's examine the current case law precedent and its application to facts.
The status of California non-competition law in the labor law sector is constantly changing. Many California courts have interpreted the Business and Professions Code statute to prohibit and thus as a matter of law invalidate non-compete agreements. An employer however will quickly state that there is confidential or proprietary information being used and the courts must evaluate. One of the biggest flaws in Section 16600 is that the Business statute does not provide for the mandatory recovering of attorney's fees and costs expended to fight and protect against a company's illegal use of non-compete agreements. Whereas states like Arizona provide for mandatory attorneys' fees to be paid by the employer.
I. Non Competition Agreements Are Generally Invalid
California Business and Professions Code section 16600 (“Section 16600”) provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” California courts typically interpret the statute broadly and refuse to enforce Non Competition Agreements. Except in narrowly drawn, statutorily defined circumstances, discussed below, California courts deem them to violate California’s public policy that promotes freedom of competition and an employee’s right to move between jobs. Consequently, California courts typically invalidate Non Competition Agreements. Hill Medical Corp. v. Wycoff, 86 Cal. App. 4th 895 (2001).
II. Courts Will Not Rewrite Non-Competition Agreements To Make Them Enforceable
Even if an employment agreement contains a clause evidencing the parties’ desire to rewrite a covenant not to compete should it be deemed unenforceable, California law prohibits such revision. A clause that is invalid under Section 16600 is illegal and California courts have deemed the rewriting of illegal covenants unacceptable. Hill Medical Corp. v. Wycoff, 86 Cal. App. 4th 895 (2001); Kolani v. Gluska, 64 Cal. App. 4th 402 (1998).
III. If Enforcement of a Covenant Not To Compete Is Sought in a California Court, California Law Will Be Applied
California courts will apply California law in order to enforce its public policy favoring competition even if a contract designates the law of another state or country as the applicable law. Thus, when a contract designates law other than California law to govern a Non Competition Agreement, a California court will apply California law and render the covenant void unless the agreement falls within an exception or the other state’s interest is more significant than California’s. For example, where an employment agreement designating Maryland law as governing was drafted and entered into by an employer and employee in Maryland, the California court declined to enforce the Non Competition Agreement when the employee left the employer and moved to California to work for a competitor in violation of the agreement. Although Maryland law would have upheld the Non Competition Agreement, the California court ruled that enforcing it would violate California’s public policy of promoting and protecting open competition. The court ruled that enforcing the covenant would more substantially impair California’s interest in enforcing its public policy than Maryland’s interests in upholding the non-compete agreement. As a result, the court applied California law and voided the clause. Application Group, Inc. v. Hunter Group, Inc., 61 Cal. App. 4th 881 (1998). Even though they have refused to enforce Non Competition Agreements governed by the laws of other states, California courts have not gone so far as to enjoin the courts of another state from enforcing Non Competition Agreements. In one case, an employee left his Minnesota employer to work for a California competitor. The employee tried to use California law to prevent the application of a Non Competition Agreement. Rather than waiting to challenge the covenant’s enforcement, the employee sued in a California court to enjoin the Minnesota employer from starting proceedings to enforce the covenant in a Minnesota court. The Supreme Court of California bowed to principles of comity and judicial restraint in not upholding the injunction even though its application would promote California public policy. The court reasoned that it would have been disrespectful to deem the law of California so much more worthy than that of another state and that doing so was an indirect challenge to the dignity and authority of the tribunal of the other state. Advanced Bionics Corp. v. Medtronic, Inc., Cal. 4th 697 (2002).
IV. Employers May Not Force an Employee To Sign a Non Competition Agreement
Generally, California employers may not force their California employees to sign non-compete agreements. Making the signing of an unlawful agreement a condition of employment warrants a claim for wrongful termination. Even asking an employee to sign a Non Competition Agreement or using a signed covenant against an employee or subsequent employer may lead to suits for unfair competition.
V. The Permissible Scope Of The Statutory Exceptions
A. Territory
California’s Business and Professions Code allows a buyer of a company’s goodwill, a partner, or member of a limited liability company to restrict sellers of business interests or departing partners or members from carrying on similar business “within a specified geographic area” in which the business, partnership, or limited liability company has transacted business. Under this rule, California courts have upheld Non Competition Agreements encompassing the entire United States and beyond. So long as a party can show that some business was conducted in those areas, the court may uphold the covenant. Because the exceptions serve to protect goodwill, they cover the area in which goodwill is in need of protection. This has been construed to be the area in which a business’ goodwill has been established, evidenced by where sales, production and phases of the business have been conducted, as well as the area where the business reasonably established its goodwill based on particular business activities being carried on there, such as promotional and marketing activities. Allowing the scope of the covenant to span the breadth of the practice or business comports with the reasonableness requirement of a Non Competition Agreement’s geographic scope. Monogram Indus., Inc. v. Sar Indus., Inc., 64 Cal. App. 3d 692 (1976) (upholding a covenant against a challenge that its geographic scope was overly broad by showing that the company’s goodwill extended or could reasonably be expected to extend to the areas restricted by the agreement); Roberts v. Pfefer, 13 Cal. App. 3d 93 (1970) (allowing a covenant falling within Section 16602 to span beyond the city or town in which the partnership was physically located). Although a Non Competition Agreement must have a limit to its geographic scope, it is not clear whether a Non Competition Agreement must actually designate a specific area of application or whether it is sufficient for the covenant merely to specify that it applies in all areas where a company has transacted business. The statute’s language, January 2004 Enforceability Of Non Competition Agreements In California “specific geographic area,” would appear to require explicitness but courts have not answered this question. Because of the uncertainty in this area, it may be best for someone seeking to enforce a Non Competition Agreement to be specific when designating the geographic scope of the covenant. Fleming v. Ray-Suzuki, Inc., 225 Cal. App. 3d 574 (1990).
B. Time
Sections 16601, 16602, and 16602.5 specify that Non Competition Agreements can prohibit competition for as long as the buyer of the interest, or anyone gaining title to the interest, other partners, or other members of the limited liability company carry on a like business. Thus, covenants under these sections potentially may last for numerous years. In one case, two brothers engaged in business together agreed that the brother leaving the business would not participate in a competing business in the San Diego area. The final written contract mistakenly omitted the clause. The court found there was sufficient evidence that the covenant was part of the agreement and narrowed the duration so that the brother leaving the business was only prevented from competing with his former business for as long as it carried on a like business in the area. Martinez v. Martinez, 41 Cal. 2d 704 (1953); see also Loral Corp. v. Moyes, 174 Cal. App. 3d 268 (1985) (“We also observe the Legislature has allowed business sellers to promise non-competition to their buyers without time limitation other than for the period ‘so long as the buyer, or any person deriving title to the goodwill or shares from him, carries on a like business therein.’”).
C. Activity
Sections 16601 through 16602.5 provide that covenants may prohibit sellers of business interests, former partners or former members from engaging in any competing business activity in a specified geographic area. Monogram Indus., Inc. v. SAR Indus., Inc., 64 Cal. App. 3d 692 (1976). Thus, although courts may adhere to the concept that a covenant must be reasonable in terms of the activity that it limits, courts have interpreted these sections to reasonably exclude all competing activity from appropriate geographic regions. Isolated instances of competition, however, are not permissibly restricted under the statutory exceptions. The purpose of the exceptions is to allow businesses, partnerships, and limited liability companies to protect themselves from substantial detriment to their competitive position. Because occasional transactions do not typically threaten such an impact, the statute meant to target the solicitation of significant business from the business, partnership, or limited liability company. Swenson v. File, 3 Cal. 3d 389 (1970).
VI. Practical Tips and Suggestions For Creating a Non-Compete Agreement
Despite the difficulty in enforcing covenants not to compete in employment agreements, employers have several methods of protecting their interests. These include the following:
Confidentiality Agreements – Employers should include a confidentiality provision in the employment agreement that defines trade secrets to include, if applicable, customer lists, customer contacts, vendor lists, vendor contacts, pricing lists, product information and testing results, and strategic business and other similar information. Although the employee may take employment with a company competitive with the employer, the employee may not use the protected information against the employer. If practical, the employer should restrict access to trade secrets and maintain a log of all trade secrets provided to the employee.
Covenant Not to Solicit Customers – Employers should include in the employment agreement, or as part of the confidentiality provision, a covenant not to use trade secrets to solicit the employer’s customers. Such covenants are only enforceable when necessary to protect trade secrets and, therefore, should provide that the employee agrees not to use the employer’s trade secrets to solicit the employer’s customers.
Covenant Not to Solicit Employees – Employers should include in the employment agreement a covenant not to solicit the employer’s employees, providing that “during the term of this agreement and for a period of year after leaving the company, the employee will not solicit the company’s employees.”
Non Competition Agreement During Employment – Employers should include in the employment agreement covenants restricting employees from competing during the term of their employment.
Return of Property – Employers should include in the employment agreement a provision requiring employees to return all company property upon leaving the company.
Choice of Law Provision – If the employer desires to include a non-compete agreement in the employment agreement and the company is not exclusively operated in California, or if the employee works and resides in a state other than California, the employer should include in the employment agreement a choice of law provision designating law from a jurisdiction other than California as the controlling law. If suit is brought in another jurisdiction, although not determinative in California, the choice of law provision may control. The employer should be sure, however, that the jurisdiction designated in the employment contract protects trade secrets to the same extent as California.
File First – If an employee is violating a Non Competition Agreement contained in his or her employment agreement or if it appears that the employee may challenge the validity of a non-compete agreement, the employer seeking to enforce a Non Competition Agreement that does not fall within an exception should, if possible, file suit outside of California or, at the very least, in January 2004 Enforceability Of Non Competition Agreements In California federal court. If the employee sues first in California, it is likely that the California court will assume jurisdiction over the employer and invalidate the
Non Competition Agreement—even with a contrary choice of law provision in the employment contract.
Conclusion
California courts consistently disallow covenants restraining employees from competing against their former employers. As discussed, however, there are limited exceptions to this rule. A buyer of a business interest, partners in a partnership and members of a limited liability company may enforce Non Competition Agreements against sellers of business interests, departing partners or departing members, respectively. These exceptions allow covenants to restrain such individuals from competing in the same business within the same geographic area as the buyer, partners or members, as long as the buyer, partners or members continue to operate the same business. Moreover, courts may uphold restrictive covenants to protect trade secrets and prevent unfair competition. Thus, buyers, partners, members, and employers may in certain circumstances utilize covenants to protect their business from the potential competitive harm caused by sellers, departing partners, members or employees. Individuals seeking to protect their businesses with restrictive covenants, however, must take care to properly construct the covenants in order to avoid the numerous pitfalls faced when attempting to overcome California’s general disfavor of such agreements.
Links may currently be the single most important aspect that all search engines use to rank all websites. Incoming links, which are links that are directed to your page from another website, are extremely valuable to the search engines because fundamentally they are much more difficult for a Webmaster to manipulate and control the placement, quantity and results. These incoming links are considered considered by the search engines to be genuine indicators as to the true nature of the quality of the content on your website. There are Generally three key aspects that most search engines use to determmine the value of your incoming links:
1. Popularity
First and foremost, how popular is your website? Does your website have numerous people with links on your site? There are several services that you can use to check your link popularity including:
The relevancy of the link is extremely important as well and a search engine will examine how relevant the website is that is linked to your website? Is the content on the site relevant to your website's content? Is the website that is linking to you in a similar subject area, however slightly different? Does the website have targeted keywords that are similar and is the website about similar subjects?
3. Link Text
The text used within the link that is positioned on the website that is linking to you is also extremely important. Google's search engine takes a particularly close look at the "Anchor Text". Always attempt to include your website's keywords or phrases into the Anchor Text that is linking to your website. Additionally, always think about the text that is surrounding the area that is linked to on your website.
Search engines place an enormous amount of emphasis on high numbers of quality websites linking to your website. However the true efficacy of these links is much greater if all of the links are considered to be relevant to what your website is all about.
If search engine optimization is any part of your website, then it is always well worth the time and energy to attempt to increase the number of quality links directed to your website. The best way to attract links is to create quality content that people want to link to. In an upcoming blog we will discuss, the Top 10 ways to get links to your website.
If search engine optimisation is a crucial part of your website promotion then it is well worth spending time and effort on increasing the number of links to your website. The best way to do this is to set up a great website that attracts the interest of other website operators.
The Internet possesses a wealth of information and opportunity and even as the amount of websites continues to grow exponentially, there continues to be numerous lucrative business outlets to be taken advantage of by the discerning individual. Many are familiar with EBay and building an EBay business and some individuals perform considerably well, but with a little more time, effort, energy and money its possible to create your own internet marketplace, community, forum or blog. There will be many factors that ultimately dictate the success of your website, however the three that I will mention in this blog are mandatory for the ultimate success of your website.
1. Research
You can never undervalue performing a significant amount of research before diving into your web project. First, research the topic that you would like to pursue. Our suggestion is to pursue something that you are passionate about and that is not very popular thus low web competition. Ideally, your topic will have as low competition as possible, however the web is effectively inundated with nearly everything. Once you have thoroughly researched your topic and have a sufficient amount of background, next research your hosting costs and companies that you may use to store your website. Once you have your research complete, begin your project.
2. Hard Work
Hard work is a necessity that with time will lead to a profitable or successful web opportunity. Many people think that these website success stories happen overnight, however they always involve hard work on the part of the founders and the support team. With your website try to provide innovative technology and unique quality content. The quality content will lead to links which are of paramount importance when growing your website.
3. Persistence and Time
As stated above, with anything in business, progress takes time. Remember you are creating an asset that will grow in value with time. You must continue to contribute to your asset as often as possible with quality and unique content. You must stay persistent and not give up. Your vision may change somewhat with time but you must remain resilient in order to achieve your goals.
We wish you the best of luck with your pursuits in the web and please visit our sites and provide your feedback.
Being served with a lawsuit can be a very frustrating, time-consuming and expensive matter, especially when the lawsuit is frivolous. MarvQuin advise you to always consult an attorney prior to engaging in any steps along the process, however the following letter is a highly recommended first step to dealing with a frivolous lawsuit. The claims covered extensively in the letter are Breach of Non-Compete Agreement, Breach of Fiduciary Duty and Tortious Interference or Intentional Interference with a Business Relationship. Each cause of action is discussed as it pertains to Arizona Law.
When a lawsuit is frivolous, states have many protections in place to deal with and eventually punish those who have instituted the legal proceeding. It is important to confront the situation agressively and think long and hard about how you are going to respond. Once you have collected your thoughts, draft a letter similar to the one below and assess the situation from there. The following letter was written by Marvin Jones of MarvQuin, an experienced corporate attorney in the fields of Corporate and Entertainment Law and Litigation. Please comment below:
RE: STATUTORY OFFER
Having a frivolous lawsuit filed against you can be a fearful, expensive and time-consuming task. There are ways to combat a frivolous lawsuit with good research, time, and a solid response letter. This video explains how to defend a frivolous law suit by responding with a statutory offer letter. Additionally, an actual statutory response letter is in the article below.
The letter maps out the steps to take on how to defend a frivolous lawsuit as well as what claims to refute in the causes of action. The first step is a response to the attorney bringing the claim and it reads as follows:
Via Fax and Email
July 2, 2007
Glenn Manning
33 Central Avenue, Suite 50
Phoenix, Arizona 85012
RE: STATUTORY OFFER
Dear Glenn,
This letter will serve as an official statutory offer and will be introduced to the court at the outset of future legal proceedings, if necessary. After consulting with several attorneys eager to take this case, we have decided to write this statutory offer re-explaining the facts, the law, our future and the counter claims and actions with which we will take should this frivolous lawsuit proceed. We reserve the right to bring any and all claims with any and all parties listed within.
The lawsuit entitled Company, LLC vs. Me, et. al., (the “Lawsuit”) is completely unjustified and should this proceed you and your clients are being put on notice that we will pursue mandatory punitive sanctions and attorneys fees against your clients Company LLC (“Smith”), David Smith (“Smith”), an individual and Jerry Jones (“Jones”), an individual under ARS 12-349(c), ARS 12-347(a) and 44-2083. We will additionally immediately motion the court to have Glenn Manning, Esq. (“Manning”) removed from the case as a conflicted material witness and then add Manning to the case and seek sanctions under Rule 11 as well as ARS 12-349(c), ARS 12-347(a) and 44-2083 against Manning. We will additionally seek sanctions against Manning from the Arizona bar.
Under ARS 12-349 the court must grant attorneys fees and double damages when a Plaintiff and Attorney (1) brings or defends a claim without substantial justification; (2) brings or defends a claim solely or primarily for delay or harassment. For the following reasons this lawsuit will be subject to ARS 12-349(c), ARS 12-347(a), 44-2083 and Rule 11.
BREACH OF NON-COMPETE AGREEMENT
As you are well aware, we responded to Manning’s letter dated June 1, 2007 with a phone call to Manning where we specifically outlined why the allegations of breach of contract under the non-compete agreement against Quinton James (“James”) lacked a good faith basis. First, Our company, James, and I do not compete against Smith. In fact the reason we were forced to start another entity in order to fulfill our interests was primarily because Smith had no interest in what we were doing. Multiple times we attempted to get Smith, Smith and Jones to engage in projects we were interested in pursuing. Everytime they refused. I personally pulled Jones aside and begged him on multiple occasions to help me convince Smith that we should attempt some of these projects that we are currently working on now. Jones agreed to meet with Smith, however continually put off the meeting and after six weeks had gone by I had to take matters into my own hands. I approached Smith about the projects and asked Smith if Smith could commit only two hours a day to these projects, and Smith refused. Our company has no clients, Our company does not solicit clients and Our company is not seeking any clients. We would happily direct clients Smith way, it’s not our business. Therefore there is no competition.
Secondly, as stated in the conversation with Manning, the Non-Compete executed by James is unenforceable. Under Arizona law, a restrictive covenant will be considered unreasonable and unenforceable: "1) if the restraint is greater than necessary to protect the employer's legitimate interest; or 2) if that interest is outweighed by the hardship to the employee and the likely injury to the public." Valley Med. Specialists v. Farber, 982 P.2d 1277, 1281 (Ariz. 1999). Generally, non-competition restrictive covenants are either reasonable and enforceable or unreasonable and unenforceable. Moreover, Arizona courts rigorously scrutinize geographic and temporal restrictions, as they will enforce only those agreements in which the "restraint does not exceed that reasonably necessary to protect the employer's business, is not unreasonably restrictive of the rights of the employee, does not contravene public policy, and is reasonable as to time and space." Bed Mart, Inc. v. Kelley, 45 P.3d 1219, 1221 (Ariz. App. 2002); see also, Bryceland v. Northey, 772 P.2d 36, 40 (Ariz. App. 1989) (suggesting, in dicta, that a reasonable temporal restriction should not exceed 14 weeks); Amex Distrib. Co., Inc. v. Mascari, 724 P.2d 596, 604 (Ariz. App. 1986) (asserting, in dicta, that a period of a few months is probably the maximum appropriate temporal restriction for a sales representative).
The agreement signed by James and Smith specifically states that “the Employee shall not, anywhere in the United States or any other country” work anywhere in the field of the internet. This restriction (1) does not protect a legitimate employer’s business interest, (2) is extremely restrictive of the rights of the employee, (3) contravenes public policy and (4) is completely unreasonable to time and space. As seen in the case law above, and the facts, we don’t compete with Smith, therefore there is no legitimate interest, James’s career is 100% based on the internet and therefore his rights would be severely restricted and public policy would be contravened. Additionally, courts do not enforce agreements longer than 14 weeks in Arizona and deny restrictive covenants that have an entire state restriction let alone an entire world restriction. Therefore the breach of contract claim against James is without a good faith basis, frivolous and brought with an attempt to delay and harass.
BREACH OF FIDUCIARY DUTY
The Breach of Fiduciary Duty Claim brought against Marvin Jones (“Jones”) is also completely frivolous, without a good faith basis, and brought with an attempt to delay and harass. I am not a licensed Arizona attorney. I was not completely uprooted from my home in Los Angeles California to perform legal services in Arizona for Smith. I can’t be Smith’ attorney and never had any intention of taking the bar in Arizona. As stated above, we attempted on numerous occasions to get Smith, Smith and Jones to engage in the projects that we are engaging in now and that is what I came to Arizona to do. Smith, Smith and Jones refused. I was never paid from any of my work at Smith, which will be explained in detail below. After a year of work in which I was never paid a dollar from Smith, despite promises of being paid by Smith, Smith and Jones, I found myself facing an eviction from my condo.
I turned to my “friends” and “partners” Smith and Jones seeking some form of payment for my services and instead of finally paying me for my services, Smith and Jones offered to buy my interest out of Smith while I was under extreme duress in the amount equal to what was owed to prevent me from being evicted from my condo. This of course is a separate action in itself and the amount is precisely identical to what was owed to stop the eviction process. I had no choice but to accept the offer or become homeless. Shortly, after the buyout, James and I founded Our company to engage in the work that Smith, Jones and Smith had refused to do. To prove a claim for breach of fiduciary duty, the plaintiff must prove that: (1) the defendant had a fiduciary duty to the plaintiff; (2) the defendant breached the duty and (3) the breach of duty caused injury to the plaintiff. There was no duty to the Plaintiff that never paid me, refused to engage in the business endeavors I wanted to pursue and who was forced out under extreme duress. Additionally, there is no injury to Plaintiff because we don’t compete and attempted to get Plaintiff to engage in this activity however Plaintiff refused. Additionally, there is no injury to Plaintiff because Our company does not have clients and does not seek clients. Again, this claim is frivolous, without good faith basis, and brought with an attempt to delay and harass.
TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS
The Intentional Interference with Business Relationships claim is also frivolous, lacks a good faith basis and brought with an attempt to delay and harass. To establish a prima facie claim for tortious interference with contract, a plaintiff must show "the existence of a valid contractual relationship or business expectancy; the interferer's knowledge of the relationship or expectancy; intentional interference inducing or causing a breach or termination of the relationship or expectancy; and resultant damage to the party whose relationship or expectancy has been disrupted." Wallace v. Casa Grande Union High Sch. Dist. No. 82 Bd. of Governors, 184 Ariz. 419, 427, 909 P.2d 486, 494 (App. 1995). The interference must be "improper" before liability will attach. Bar J Bar Cattle Co. v. Pace, 158 Ariz. 481, 483, 763 P.2d 545, 547 (App. 1988). And, "a competitor does not act improperly if his purpose at least in part is to advance his own economic interests." Id. at 485, 763 P.2d at 549; see also Restatement (Second) of Torts § 768 (1979). "The need for caution [in finding liability] is doubly required where the effect of the actor's interference is only to cause the cancellation of a terminable contract." Bar J Bar Cattle Co., 158 Ariz. at 483, 763 P.2d at 547.
As stated above, we don’t seek clients nor do we have any clients. We don’t speak with Smith clients and would have no interest in them. We don’t interfere with Smith business however we are focused on our own business which is unique and separate from Smith. Therefore, this claim is without a good faith basis, frivolous and brought with an attempt to delay or harass. Additionally, as seen in the case law above if we did interfere with Smith, Smith must show damage, Smith must show an improper means, Smith must show more than advancing our economic interest and Smith must show more than just the mere cancellation of a contract. Smith can do none of the above, because Our company has no clients, does not seek clients and in fact will turn down clients to pursue our own interests.
REMOVAL OF GLENN MANNING AND SANCTIONS
We will immediately remove Manning from this case and add Manning as a Defendant in the cross complaint. Manning is a material witness in this case. Manning is well aware of my relationship with the Plaintiff, Smith, Jones, and Claire Jones. I have worked with Manning in various business and legal interests concerning all of the parties. Additionally, Manning is aware and has been made aware of the laws concerning the causes of action brought without a good faith basis and Manning has continued to pursue them regardless of Manning’s ethical obligations.
COUNTERCLAIMS AGAINST PLAINTIFF, SMITH, JONES, MANNING
I will bring the following claims against Company LLC, all of the real estate companies, David Smith, Claire Jones and Jerry Jones Jr. for (1) Unpaid Wages under ARS 23-355 where I will seek treble damages, (2) Promissory Estoppel, (3) Unjust Enrichment, (4) Fraud, (5) Breach of Contract; (6) Intentional Interference with Business Relationships; (7) Breach of the Covenant of Good Faith and Fair Dealing; (8) Fraudulent Transactions Against a Merchant Account; and (9) Malicious Prosecution. Additionally, I have had discussions with the Scottsdale Police Department regarding the fraudulent transactions against a merchant account and I will pursue these criminal charges.
The unpaid wages claim under ARS 23-355, also supported by promissory estoppel, unjust enrichment and breach of contract will be made on the basis that when I moved out here and completely uprooted myself with the promise made by Smith and Smith that I would receive five thousand dollars per month from Smith and an additional five thousand dollars per month from Greg Jacobs. I worked for an entire year extremely long hours only to hear that there was no money to be paid at the time. I never agreed to forgo any of those payments. This claim is further supported by Promissory Estoppel and Unjust Enrichment in that I worked 50 hours a week for Search Toppers, David Smith as an individual and Jerry Jones Jr., as an individual. Additionally, at the direction of Smith, I performed services for Claire Jones, Company LLC and others as well as at the direction of Jones, I performed services for Lynne Jackson, Kahkuyan Kent, Josh Beck and others. For all this hard work, I was never paid from Smith, Smith or Jones. Promissory Estoppel is a strong claim supported by the fact that I was induced to completely leave everything behind in Los Angeles and come to Arizona by Plaintiff, Smith and Jones. I detrimentally relied on the inducement and moved to Arizona working extremely hard for Plaintiff, Smith and Jones and the court must now correct this injustice.
The fraud claim will be made based on the fact that I was never paid anything from the companies and two individuals that I dedicated my life to because I was told that the companies were never making any money however after I leave all of a sudden Smith is losing money because of interference with relationships. The Fraudulent Transactions Against a Merchant Account claim will be made against David Smith personally for his nearly $10,000 worth of charges against my new company’s merchant account to purchase merchandise from a company that is owned collectively by David’s wife, Claire Jones, David’s brother in law, Jerry Jones, Andrew McAdams and myself. The malicious prosecution charge will be brought against Smith, David Smith, Jerry Jones, and Glenn Manning for bringing this unjustified lawsuit.
In addition to my causes of action, several of the individuals listed below will serve as material witnesses and will additionally join the lawsuit as parties against Smith, Jones and Smith and other entities for unpaid wages, breach of contract, promissory estoppel, unjust enrichment, and fraud.
WITNESSESS AND DEPOSITIONS
The following people will be deposed and presented with interrogatories as material witnesses and I am sure several could testify with information unaware to me of the fraudulent transactions by the Plaintiffs. The witnesses will include but are not limited to: David Smith, Jerry Jones, Claire Jones, Glenn Manning, Andrew, Jeanette, Sarah, Gary Simmonds, Mike West, Sonny Lee, Eric Wnuck, Josh Campos, Kahkuyan Brewer, Alex Kandah, Ken, Michelle, Steve, Vannessa (deed and note drafted for her) and several others. I am also sure some of the individuals listed above may have some outstanding claims, which I will assist with, against the Plaintiff, Smith and Jones as well as some of their other entities as well as Smith.
When James and I first departed from Smith, Smith contacted us with an attempt to become involved with what we were doing after seeing the quality products that we created. Products, that he had no interest in when we first described them to him. Once he realized that we were not interested in allowing him to control or obscure our business vision in any way, however we did not close the idea of potentially working together in the future, Smith, Jones and Plaintiff have elected to bring this lawsuit. I have seen this mentality when dealing with Smith throughout the past year, but I have exercised and maintained strong legal ethics in advising him not to bring lawsuits with an attempt to harass. We don’t fault Smith as it is in his personality and fabric to engage in this behavior. We are surprised that Jones has joined in this lawsuit, however we do not blame him as well because he only knows what he hears from Smith. We actually would still entertain working with Jones and Smith should the right deal come about.
The statutory offer is in the amount of twenty $20.00 for the full dismissal of all claims with prejudice against all Defendants. Simple, review of case law from Arizona or any state and / or a discussion with any attorney will explain in crystal clear clarity that there is no good faith basis for these claims and this lawsuit is frivolous. There are several cases directly on point for each claim, in which Plaintiff has denied the Defendant, is considerably more financed than Defendant and brings the same causes of action with analogous facts. The disposition of these cases is full dismissal with prejudice as well as double damages, attorney’s fees, sanctions and the continuation of the Defendants’ counter claims. Should this lawsuit proceed we will be forced to bring the above listed counter claims which we will pursue even after the frivolous claims have been dismissed. All we want to do is pursue the business interests that Smith, Smith and Jones had no interest in pursuing.
Please be advised that if this offer is not accepted with seven days, we will be forced to retain one of the law firms who have assisted with this letter and file our answer and counterclaim and pursue our claims to the fullest extent of the law. I look forward to your response by 5pm, July 10, 2007. We reserve the right to assess our position upon being contacted regarding this offer. Additionally, as a professional courtesy and in order to give you sufficient time to think about the interests of this letter we respectfully ask for a 60 day extension to file the answer, should that be necessary.
Best Regards,
Marvin Jones
MarvQuin sent the official letter above to a former partner who has attempted to distract MarvQuin with a frivolous lawsuit. MarvQuin decided to post the letter to inform others how to appropriately deal with the situation and keep you informed as to the progress of the situation. The letter contains a very accurate and detailed account of the transgressions as well as Arizona Law on Non-Compete, Fiduciary Duty and Tortious Interference.
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