Sarah works as a financial advisor for American Express Financial Advisors (AEFA) in Des Moines, Iow

Sarah works as a financial advisor for American Express Financial Advisors (AEFA) in Des Moines, Iowa, and she signed a non-compete agreement that states that she will not work for a competitor of AEFA for two years after she leaves AEFA. The agreement also provides that she will not contact any of her AEFA customers for two years after she leaves AEFA. One of AEFA’s competitors, Jones Financial Advisors(JFA), recruited Sarah to come work for it. During discussions between Sarah and Dan Jones of JFA, Dan told Sarah she shouldn’t worry about the non-compete agreement and that he could “handle” AEFA. However, he told Sarah it was “her call.” Sarah quit her job at AEFA and started working at JFA. (She also contacted many of her old AEFA customers to tell them of her move to JFA.) Within a week, AEFA sent both Sarah and JFA a letter threatening to sue unless Sarah honored her non-compete agreement. AEFA is threatening to sue JFA for the tort of intentional interference with a contractual relationship. The elements of intentional interference with a contractual relationship are: 1) valid, enforceable contract exists between party A (Sarah) and B (AEFA); 2) Party C (JFA) Knows of the contract; and 3) Party C intentionally causes A to breach the contract with B.

Ethical issues here? Explain.

What are AEFA’s arguments (include elements of wrongful interference claim)?

How should JFA respond? Any defenses?

On what basis would AEFA sue Sarah?

 

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