Kyle Connaughton was actively pursuing potential buyers for a ramen restaurant concept that he had created. Eventually,

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Kyle Connaughton was actively pursuing potential buyers for a ramen restaurant concept that he had created. Eventually, Chipotle’s CEO, Steven Ells displayed interest in Connaughton’s plan. Connaughton then tried to cater the design to fit Chipotle’s needs. Ells initially offered to purchase the ramen restaurant concept, but eventually formed an agreement with Connaughton whereby Connaughton would continue to develop and implement the concept as a Culinary Director employed by Chipotle. Connaughton was on track to launch a restaurant in New York towards the end of his second year of employment. However, he learned from Chipotle’s chief marketing officer (CMO) that Ells had a nondisclosure agreement (NDA) with another chef who had previously worked on the ramen restaurant concept with Chipotle. The previous arrangement ended after the two parties could not find mutually acceptable terms and the CMO informed Connaughton that the other chef would sue if the restaurant was launched. Connaughton brought up the NDA to Ells, who told Connaughton to continue working on the restaurant. Connaughton refused and was fired shortly thereafter. Following his dismissal, Connaughton sued Chipotle and Ells for fraudulent inducement, asserting that if it were not for his reasonable reliance on Ell’s omissions about the previously contracted work on the ramen restaurant concept, he would not have agreed to work with Chipotle. Furthermore, Connaughton claimed he was damaged for lost business opportunities in connection to the ramen restaurant concept and that working for Chipotle had opened him up for liability to the chef that had signed an NDA. The trial court sided with Chipotle and the plaintiff appealed. How do you think the appeals court ruled? Why?

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Dynamic Business Law The Essentials

ISBN: 9781260253382

5th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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