Question : David Kline was the station manager and
David Kline was the station manager and sales manager for Reading Radio, Inc., a/k/a WAGO Radio. As manager, Kline was in charge of supervising the station’s sales representatives. Molly Fink and Isaac Ulrich, two of WAGO’s top sales representatives, had both signed non-compete agreements with WAGO that prohibited them from taking a radio or television broadcasting job, within fifty miles of Reading, Pennsylvania, for six months after leaving WAGO. Kline did not have a covenant not to compete. Reading Eagle Company approached WAGO about possibly buying the station. The sale fell through but Eagle offered Kline a job as manager of its station, WEEU. Kline accepted the position and resigned from his job at WAGO. Kline agreed to stay at WAGO for 30 days to smooth the transition, but the transition was not smooth. Kline cancelled programming without notice, transferred to Eagle a significant advertising account that also gave him personal benefits, and offered jobs at Eagle to Fink and Ulrich despite their non-competition agreements with WAGO. After Fink and Ulrich left, sales revenue at WAGO fell by $1.6 million dollars. WAGO sued both Kline and Eagle. The jury returned a verdict for WAGO in the amount of $1,105,000. The defendants appealed. Issue: Did Kline violate his duty of loyalty to his employer, WAGO? Holding: Judgment for WAGO affirmed. While still employed by WAGO, Kline actively encouraged Fink and Ulrich to leave WAGO and go to work at WEEU. He also refused to enforce their covenants-not-to-compete. These acts were clear violations of his duty of loyalty. Required: a. Kline showed how not to move from one job to another. What did he do wrong? b. What should he have done? c. Kline knew that Fink and Ulrich were good at their jobs. Why couldn’t he hire them to work at his new station? d. Why does that make it worse?