One of your top executives puts in his notice that he is leaving to join your fiercest competitor. Fortunately, he signed a noncompete that restricts him from doing just that. Your lawyer sends him a letter reminding him of his contractual obligations to your company, of course, but also recommends that you put the new employer on notice of the noncompete and threaten a tortious interference action against the company should it proceed to hire your employee. After all, he advises, the company has deeper pockets than the executive, and if the competitor hires him with knowledge of his contractual obligations to his existing employer, they are automatically on the hook for tortious interference. Right? Wrong, says the Fourth Circuit.
Similar facts were presented in Discovery Communications, LLC v. Computer Sciences Corporation. Discovery had an employment agreement with its chief accounting officer, Thomas Colan, which required Colan to remain with Discovery for a specific term. Discovery alleged that Colan breached his agreement by quitting his job prior to the expiration of the term to go work for CSC. Discovery alleged that it put CSC on notice of the employment agreement after CSC offered Colan employment but before the effective date of Colan’s resignation. Discovery argued that CSC tortiously interfered with the contract by hiring Colan after being put on notice of the employment agreement. The district court held that was not enough, and the Fourth Circuit agreed, affirming the dismissal of the case.
As in Virginia, to state a claim for tortious interference with contract in Maryland, a plaintiff must allege (1) the existence of a contract between plaintiff and a third party; (2) defendant’s knowledge of that contract; (3) defendant’s intentional interference with that contract; (4) breach of that contract by the third party; and (5) resulting damages to the plaintiff. What was missing from Discovery’s allegations was Element #3: intentional interference.
Specifically, Discovery failed to allege that CSC intentionally interfered with the contract after being put on notice of its existence and before the time Colan allegedly breached it. The act of employing Colan was insufficient to constitute tortious interference because it occurred after Colan’s resignation. This lapse was held to be fatal to Discovery’s claim.
The lesson to be learned from this is that a cause of action for tortious interference requires more than just a breach of contract or knowledge of somebody else’s breach of contract. The essence of the tort is successful interference, not just the breach. The latter is merely evidence of the former.