Should H&R Block be able to obtain an injunction against June? Against Robert?

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Should H&R Block be able to obtain an injunction against June? Against Robert?

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Robert McCart owned and operated an H&R Block tax preparation franchise. When Robert became a district manager for H&R Block, he was not allowed to continue operating a franchise. So in accordance with company policy, he signed over his franchise to his wife June. June signed the new franchise agreement, which included a covenant not to compete for a two-year period within a fifty-mile radius of the franchise territory should the H&R Block franchise be terminated, transferred, or otherwise disposed of. June and Robert were both aware of the terms of this agreement, but June chose to terminate her franchise agreement anyway. Shortly thereafter, June sent out letters to H&R Block customers, criticizing H&R Block’s fees and informing them that she and Robert would establish their own tax preparation services at the same address as the former franchise location. Each letter included a separate letter from Robert detailing the tax services to be offered by the McCarts’ new business. Should H&R Block be able to obtain an injunction against June? Against Robert?

Explanation & AnswerSolution by a verified expert

Explanation

The contract to restrict the individuals from conducting a competitive business for a specific time period and in a specific location. The contract is reasonable and the individuals should abide by such restrictions.
Individual R and Individual J deviated from the contract and conducted competitive business. So, both individuals are liable toward the company.

Verified Answer

Both Individual R and Individual J should be held liable toward the company since the contract restricts both the individuals to undertake any competitive business for a specific time period and in a specific location.
But both Individual R and Individual J intentionally breached the contract and are going to be held liable toward the company.

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