By my count, this is the 26th edition of this Newsletter. I thought about subtitling it the “Judge Davis edition” because all of the Orders of Significance of September 2026 were delivered by Judge Davis.

I have expressed my annoyance at the length of some of the Judge Davis’ recent Opinions, but I have little complaint about the length of these September Orders, especially since one of them is only one page long (and should have been a bit longer, in my opinion) That one is Present v. State of North Carolina, 2026 NCBC Order 73 (Davis, J.), dealing with the constitutionality of a provision of the North Carolina business Corporation Act, discussed immediately below

Is it Constitutional to Require a Shareholder to be a Shareholder for an Entire Year Before She is able to file a Derivative Action?

You are not going to get an answer to the question above in this post, all you will learn is whether this case needed to be referred to a three-judge panel for resolution.

In 2014, the North Carolina Legislature added a new category of cases which must be heard by a panel of three Superior Court Judges in Wake County.

Before G.S. §1-267.1 was amended in 1994, a three Judge panel was required only for cases involving legislative or congressional redistricting. Now, with the 1994 amendment to Section 1-267.1(a), the need for a triumvirate extends to:

Any action that is a facial challenge to the validity of an act of the General Assembly shall be, unless filed in the Superior Court of Wake County, transferred pursuant to G.S. 1A-1, Rule 42(b)(4), to the Superior Court of Wake County. All actions referenced in this subsection shall be heard and determined by a three-Judge panel of the Superior Court of Wake County organized as provided by subsection (b2) of this section.

N.C. Gen. Stat. sec. 1-267.1(a)(emphasis added).

In Present v. State of North Carolina, 2026 NCBC Order 73 (Davis, J.), the Plaintiff was challenging the constitutionality of G.S. §55-7-48(1). That statute requires that before a shareholder of a public corporation may file a derivative action against the directors of that corporation, he must have been “a shareholder or holder of a beneficial interest in shares of the corporation for at least one year.”

The corporation involved was cbdMD, which is a publicly traded company which describes its business in its 10-K as “a consumer wellness company focused on the development, manufacturing, marketing, and sale of supplement brands powered by natural compounds. The majority of our products are anchored by hemp-derived cannabinoids, including broad-spectrum and full-spectrum CBD formulations, hemp-derived Delta-9 THC products.”

Plaintiff Preston, proceeding pro se, does not want to wait an entire year before filing his derivative action. But he is stymied by the terms of G. S. §55-7-48(1).

His complaint alleges that the statute is both facially unconstitutional and unconstitutional as applied. The difference between the two types of unconstitutionality? The usually reliable Internet source of Wikipedia says that:

a facial challenge is a challenge to a statute in which the plaintiff alleges that the legislation is always unconstitutional, and therefore void. It is contrasted with an as-applied challenge, which alleges that a particular application of a statute is unconstitutional.

Judge Davis rejected the request that this constitutional challenge be assigned to a three-Judge panel, stating:

Our Supreme Court has made clear that “[a]s-applied constitutional challenges . . . may be resolved in the first instance by a single judge.” Hoke Cnty. Bd. of Educ. v. State, 389 N.C. 198, 259 (2026).

Op. ¶4.

What Might Happen Next?

Judge Davis will retain jurisdiction over this case and will go on to hear North Carolina's Motion to Dismiss the as-applied challenge.

I don't think that I have ever gotten out in front of the Business Court on what it might rule in a particular case, but I feel like I am on steady ground here in making a prediction.

Does Mr. Present stand a chance on his claim of facial unconstitutionality"? The essence of his claim is that the statute “arbitrarily and capriciously” carves out “a 1 year period of amnesty for breaches of fiduciary duties, waste, gross mismanagement and other egregious misconduct by directors of North Carolina corporations .” Complaint ¶1

I haven't ever spent a minute thinking about the constitutionality of North Carolina's Business Corporations Act, but I don't think that Mr. Present stand a chance, particularly under the North Carolina Constitution, since Article VIII, Section 1 of the state Constitution says that ”the General Assembly shall provide by general laws for the chartering, organization, and powers of all corporations.” His claim under the federal Constitution is further hampered by the Tenth Amendment, which says that “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

I will be looking out for Judge Davis's Opinion on this issue.

Denial of Class Action Certification for Antitrust Lawsuit over Healthcare Premiums

Judge Davis begins his order in Davis v. HCA Healthcare, Inc., 2026 NCBC Order 71 (Davis, J.) with a tutorial on “basic principles regarding healthcare pricing and the role of commercial health insurance.” Order ¶16. That was helpful to me and is helpful to understanding the antitrust issues at play in the case.

Order ¶¶19-22.

Antitrust Overview

The Defendants are the owners and operators of Mission Health. Mission Health provides inpatient and outpatient services throughout Western North Carolina as a not- for-profit healthcare system. Order ¶10. As a part of those services, it operates Mission Hospital in Asheville, North Carolina.

Up until 2016, the owners of Mission Health were protected from federal and state antitrust action in exchange for Mission Health subjecting itself to regulatory oversight. Order ¶ 25. That protection was afforded pursuant to a Certificate of Public Advantage issued by the state of North Carolina. The statute that authorized the issuance of the COPA was repealed in 2016.

As judge Davis a succinctly summarized the nature of Plaintiffs’ contentions, after the loss of the COPA:

the ANC Defendants—left with an unregulated monopoly for the provision of in-patient general acute care services in Western North Carolina—began improperly using their market power in negotiations with BCBS and United to demand the inclusion of anticompetitive provisions in their managed care contracts.

Order ¶27. Plaintiffs allege that this improper use of monopoly power continued when Mission Health and its related assets were sold in 2019 (to those the Judge terms the ANC Defendants.

The Plaintiffs, all purchasers of health insurance through a variety of insurers (including Aetna, Blue Cross and United Healthcare) claim that those insurers have paid supra-competitive prices to the hospitals for in-patient acute general care services. Order ¶30. Plaintiffs allege that those costs were passed on to them through the premiums they had paid to their insurers.

If you remember the rudiments of antitrust law, you will recognize this as an indirect antitrust claim. As Judge Davis put it:

Certain types of antitrust lawsuits can be divided into two categories: (1) those brought on behalf of direct purchasers; and (2) those brought on behalf of indirect purchasers.

Order ¶61. If it were the insurers suing the healthcare providers this would be a direct action. Since the Plaintiffs are saying that they had to swallow the excessive rates being paid by the insurers by paying higher premiums, this is an indirect action.

Class Action Issues

This is a complicated case, so let's leave antitrust law behind for a while and focus on the class action issues.

First and foremost before Judge Davis was whether the predomination factor for class certification had been met. He said that:

‘As a threshold matter, the party seeking class certification bears the burden to show that a proper class exists, meaning the named and unnamed members each have an interest in either the same issue of law or of fact, and that issue predominates over issues affecting only individual class members.’

Order ¶45 (emphasis added )(quoting Armistead v. Cnty. of Carteret, 389 N.C. 21, 24 (2026)).

Had the Plaintiffs satisfied their burden of showing class-wide predomination under Rule 23 of the North Carolina Rules of Civil Procedure? After much analysis, Judge Davis determined that they had not.

He rejected the Plaintiffs argument that since they had scaled back their claims to be limited to injunctive relief, that they were excused from showing predomination. That would be true if the case had been brought in federal court because of the difference between the federal version of rule 23 and North Carolina's version.

As judge Davis described the federal rule, it:

contains a separate and distinct provision—Rule 23(b)(2)—that applies to the certification of class actions seeking purely injunctive relief and omits the requirement that “questions of law or fact common to class members predominate over any questions affecting only individual members”

Order ¶73.

North Carolina's version of the rule contains no similar provision. The North Carolina Supreme Court has expressly dealt with this issue and has held that “class actions certified under Rule 23 of the North Carolina Rules of Civil Procedure — including those seeking purely injunctive relief— must satisfy the predominance requirement.” Order ¶74 (citing Dewalt v. Hooks, 382 N.C. 340, 350-51 (2022)).

Well, doesn't it stand to reason that if the insurers are required to pay excessively high rates to the hospital providers that they would pass those costs on to their insureds through higher insurance premiums and that predominance was established? That is exactly what the Plaintiffs argued, and exactly the “commonsense” argument that Judge Davis rejected.

He said:

Plaintiffs’ present burden is not merely to demonstrate that higher health care costs can potentially play a role in an insurance company’s decision to increase premiums on a pass-through basis. Instead, their obligation is to present admissible class-wide evidence—whether through competent expert testimony or otherwise—that all (or all but a de minimis number) of the putative class members in this case paid higher insurance premiums to BCBS and/or United as a direct result of Defendants’ conduct.

Order ¶80 (emphasis added).

Plaintiffs’ Effort to Present Expert Testimony to Establish Predominance was Insufficient

Plaintiffs had presented the expert report of Prof. Robert J. Town in support of their Motion for Class Certification. The Defendants had made a Motion to Exclude the report,

Judge Davis spent multiple pages shredding the admissibility of the report. If you are involved in a putative antitrust class action involving indirect purchasers, you'll want to peruse paragraphs 81 through 119 of this Order carefully.

I will boil it down to this: Prof. Town’s opinion that the supracompetitive rates paid by the insurers to the hospital providers “were based solely on general economic principles contained in various articles and selected portions from the deposition testimony of [the insurers’] respective corporate representatives in this case.” Order ¶94. Judge Davis further said that “those articles are not a valid substitute for an actual analysis of the real-world effects on the premium amounts paid by the putative class members in this case as a result of Defendants’ alleged anticompetitive conduct.” Order ¶95

The Court also criticized “Dr. Town’s failure to utilize a reliable econometric or statistical model— or, for that matter, any model at all—with regard to his opinions on the pass-through issue is of particular concern given the inherent complexities of a pass-through impact theory.” Order ¶98.

This case was filed as a Class Action Complaint in 2021 and has generated over 300 filings with the Court. What a shame for it to end with the denial of the motion for Class Certification

Road Map for Approval of a Class Action Settlement

if you are representing a Plaintiff in a class action lawsuit in the North Carolina Business Court and are hoping to have your eventual settlement and Petition for Attorneys’ Fees approved by the Court, Judge Davis’ Order in In re Asheville Eye Assocs. Data Incident Litig., 2026 NCBC Order 74 (Davis, J.) Is essential reading.

The Plaintiffs had sued a Western North Carolina optometry practice (Defendant Asheville Eye Associates) over a data breach that occurred in late 2024. The Plaintiff's requested approval of the settlement agreement from the Business Court in April 2026,

In his Order, Judge Davis ruled that the case qualified for class certification (it included approximately 327,756 individuals). He conducted an exhaustive review of the amount of attorneys’ fees and expenses sought by Plaintiffs’ counsel and other assorted fees sought by the class.

Approval of Attorneys’ Fees, Costs, and Services Awards

The benchmark for the reasonableness of the attorneys fees sought was governed by rule 1.5 of the Revised Rules of Professional Conduct of the North Carolina State Bar

That rule dictates that the following factors be considered:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent.

Order ¶47 (quoting N.C. R. of Prof. Conduct 1.5(a)).Judge Davis then paces through those factors in arriving ahis eventual approval of $500,000 in fees and expenses.

Reasonable hourly fees. Judge Davis first took judicial notice of the rates customarily charged by local attorneys for the same tasks. He found that partner hourly rates of between 600 and $750 and associate level work of between $350 and $650 charged by Plaintiffs’ counsel to be reasonable for attorneys practicing before the Court. Order ¶ 50-51.

Then, without much explanation, Judge Davis cut the approved hourly rates for six attorneys by up between $200 and $50. he stated he was doing this “upon the Court’s review of the education, experience, and qualifications of those attorneys.”

Fees for non-attorney support staff. Plaintiffs’ counsel had proposed that work performed by non-attorney support staff should be awarded at the rate of $258 per hour.Judge Davis rejected this proposed hourly rate, stating that it was in excess of the rates that the Business Court had approved in the past for non-attorney support staff. Those rates had been approved at an hourly rate of $239 per hour. Order ¶ 55. he also noted that this rate was higher than the actual rate that had been billed by that staff. In his discretion, he concluded that a reasonable hourly rate for the non-attorney support staff was either their normal billing rate or $225 per hour.

Time and labor required. Plaintiff's’ counsel had submitted itemized invoices for the work they had performed and for which they sought compensation. Judge Davis fly- specked those invoices and concluded “that some of the requested attorneys fees are noncompensable.” These included fees for work performed in connection with obtaining the admission of out-of-state counsel pro hac vice. Order ¶62.this was based upon decisions from North Carolina’s courts refusing to award fees and expenses relating to pro hac vice admission on the grounds that they were “nontaxable costs” or that they were “clearly prohibited” Order ¶63.

Clerical and administrative tasks. Judge Davis observed that:

‘any clerical tasks should be subsumed in a law firm’s overhead, rather than billed even at a firm’s rate for paralegal work, because the most basic of clerical tasks—filing, transcription, and document organization—are part of the cost of doing business.’

Order ¶ 66.

Well, what is a ”legal task” and what is a “clerical” one and how you tell the difference? Judge Davis said that“[t]he precise boundary between legal tasks and clerical ones may be debated, but there is indeed a line between such tasks.” Order ¶67.he scrutinized invoices and excluded the charges “that reflect purely clerical or administrative tasks, such as filing documents, organizing case files, and routine client communications.” Order ¶68.

Unrelated, vague, and block billed time entries. Judge Davis excluded multiple time entries of this type from the fee award. Order ¶70.

Lodestar Multiplier. Plaintiffs’ counsel had requested that the court apply a lodestar multiplier of 2.5 to the total sum of their reasonable hourly rates and time spent in connection with the case. I have written about a lodestar fee application in the Business Court before. The standard to be applied here, said Judge Davis, was “(1) the novelty of the claims and issues in this case; (2) whether the representation of Plaintiffs precluded Plaintiffs’ counsel from accepting other work; (3) the fixed or contingent nature of the fee agreement between Plaintiffs and their counsel; and (4) the quality of the representation provided by Plaintiffs’ counsel and results that were achieved.” Order ¶73

Plaintiffs did not fare well on their application for a 2.5 multiplier. Judge Davis ultimately awarded a meager1.3 multiplier. Factoring into that diminished lodestar were Judge Davis’s conclusions that the case did not present any “unusually novel or difficult questions of fact or law.” Order ¶ 75 He noted that the facts and claims asserted in the case before him were “typical of the facts and claims at issue in other data breach class action lawsuit in North Carolina courts.” Order ¶ 76 He also noted several data breach cases that have been handled in the Business Court. Order ¶78. [I apologize for saying back in July that Dougherty v. Bojangles Rests., Inc., 2026 NCBC 60 (Earp., J. )was the first data breach case in the Business Court. It wasn’t]

He said that this existing body of case law allowed litigants and lawyers to more accurately predict the potential risk and rewards of the case.

The benefits received by the class members. In a restrained comment, Judge Davis said that “the actual benefits to be received by the individual members of the Class are somewhat modest.” Order ¶ 81. What were those benefits? A $10 voucher that can be used as some of the Defendant’s locations when purchasing eyeglasses, and the potential for reimbursement of out-of-pocket expenses up to a ceiling amount. Judge Davis said that although these benefits were “reasonable, fair, and adequate to the Class” they were “by no means extraordinary. Order ¶84

Expenses. Judge Davis allowed a “service award” of 1$1250 to each of the class representatives. He said that this amount was “reasonable and consistent with service awards that have been granted to other class representatives and similar actions.” Order ¶90.

Judge Davis Appoints a Receiver in Two Cases

in two cases, Judge Davis appointed a Receiver to become involved in the affairs of two troubled corporations. One was in WP Church, LLC v. Whalen, 2026 NCBC Order 75 (Davis, J.) to deal with the violation of the terms of the previously entered Preliminary Injunction and In another — NC4 Canterbury, LLC v. Meridian Senior Living, LLC, 2026 NCBC Order 72.(Davis, J.) to address an event of default under the leases of multiple adult care homes.

As for the WP Church case, Defendant Whalen had been enjoined from “(i) “[t]ransferring, selling, or otherwise disposing of 5Church’s funds or assets outside the ordinary course of business” and (ii) “[t]ransferring 5Church’s funds or assets to any business or organization [Defendant] owns or controls” Order ¶11.

Plaintiff was suing derivatively on behalf of 5Church Charleston, an LLC operating a restaurant in Charleston, South Carolina of which it was a minority member and of which Defendant Whalen was the company’s sole manager. Per the LLCs Operating Agreement, Defendant Whalen had “broad discretion to control the company’s affairs, including the power to unilaterally dispose of less than ‘all or substantially all’ of its assets. Order ¶6.

Notwithstanding the restrictions of the Preliminary Injunction, Defendant Whalen made numerous transfers totaling more than $140,000 from 5Church’s funds to the several restaurants affiliated with 5Church. Each of these transfers was quickly repaid. Mr. Whalen characterized these as “a series of accidental and corrective transfers.” Order ¶16.

Further transfers were made by5Church LLC in repayment of loans made to the LLC by Mr. Whalen and his family. The Defendant claimed that these transfers were made in the ordinary course of business, Other transfers were made for lease payments due on a BMW and Audi which Plaintiff contended were not solely for the use of 5Church.

There were also payments made on water bills for which the invoices reflected the name of Defendant’s wife, and questionable use of 5Church’s credit card by some of the Affiliate Restaurants and for Mr. Whelan’s personal expenses.

NC’s Commercial Receivership Act

North Carolina’s Commercial Receivership Act provides for the appointment of a receiver:

[b]efore judgment, on the application of either party, when [(1)] the party establishes an apparent right to property that is the subject of the action and [(2)] in the possession of an adverse party, and [(3)] the property or its rents and profits are in danger of being lost or materially injured or impaired[.]

Order ¶37 (citing G.S. §1 – 502(1).a court may also appoint a receiver pursuant to its inherent authority.Id.

Judge Davis found that a receivership was appropriate for 5Church after stressing that “[t]he appointment of a receiver is an extraordinary remedy[,]”and that a court should appoint a receiver only where only where there is no other “safe or expedient remedy.” Order ¶38.he held that Plaintiff had an apparent right to 5Church’s assets because it was a member of that entity. He paused a bit on whether five Church’s assets were in the possession of an adverse party. He rejected Whalen’s argument that the pleadings did not show whether he is being sued in his personal capacity in which he had no power over the LLC’s assets or in his capacity as the manager of the LLC.

the judge also ruled that 5Church’s assets were in danger of being lost or materially injured or impaired as evidenced by the transfers to the Affiliate Restaurants and the repeated use of the LLC’scredit card to benefit those restaurants. Order ¶48.

The Receivership Order

Judge Davis entered a very detailed, seven-page Order within the principal Order setting out the terms of the receivership. As a part of that order, he stripped Defendant Whalen from “any management, officer, director, signatory, or decision-making role” with respect to the finances of 5Church. Any authority for him to approve or disapprove any expenditures or transfers of 5Church’s funds or assets was also taken away. those powers were given to the Receiver (BDO Consulting Group, LLC).

The NC4 Canterbury Receivership: What Is A Limited Receiver?

In NC4 Canterbury, LLC v. Meridian Senior Living, LLC, 2026 NCBC Order 72.(Davis, J.),

Judge Davis appointed a “ Limited Receiver” over the properties operated by the defendants and the Tenants of those properties. But what is a limited receiver and how is a limited receiver’s powers different from those of a general receiver?

The distinction is in G. S. §1 – 507.23, which says that:

A receivership may be either a limited receivership or a general receivership. Any receivership which is based upon the foreclosure or enforcement of a security agreement, judgment lien, mechanic's lien, or other lien pursuant to which the debtor or any holder of a lien would have a statutory right of redemption, shall be a limited receivership. If the order appointing the receiver does not specify whether the receivership is a limited receivership or a general receivership, the receivership shall be a limited receivership unless and until the court by later order designates the receivership as a general receivership, notwithstanding that pursuant to G.S. 1-507.24(i), a receiver may otherwise have control over all the property of the debtor. At any time, the court may order a general receivership to be converted to a limited receivership and a limited receivership to be converted to a general receivership. (2020-75, s. 1.)

The powers of a limited receiver and of a general receiver are enumerated in G. S. §1 – 507.28: Both types of receivers have these powers:

Except as otherwise provided in subsection (d) of this section, a receiver, whether general or limited, shall have the following powers in addition to those specifically conferred by this Article or otherwise by statute, rule, or order of the court:

(1) The power to take possession of, collect, control, manage, conserve, and protect receivership property, including any books and records related thereto with or without the assistance of the sheriff of the county in which the receivership property is located as reasonably necessary.

(2) The power to incur and pay expenses incidental to the receiver's exercise of the powers or otherwise in the performance of the receiver's duties.

(3) The power to assert rights, claims, causes of action, or defenses that relate to receivership property.

(4) The power to seek and obtain instruction from the court with respect to any matter relating to the receivership property, the exercise of the receiver's powers, or the performance of the receiver's duties.

(5) In the case of any item of receivership property that because of an applicable exemption is not totally receivership property, the power to take possession of, use, control, manage, or transfer such property pursuant to G.S. 1-507.46.

a General Receiver has these additional powers:

(1) The power to assert any rights, claims, causes of action, or defenses of the debtor to the extent any rights, claims, causes of action, or defenses are receivership property, including the right to sue for and collect all debts, demands, and rents constituting receivership property.

(2) The power to maintain in the receiver's name or in the name of the debtor any action to enforce any right, claim, cause of action, or defense.

(3) The power to intervene in actions in which the debtor is a party for the purpose of exercising the powers under this clause or requesting transfer of venue of the action to the receivership.

(4) The power to pursue any claim or remedy that may be asserted by a creditor of the debtor under Article 3A of Chapter 39 of the General Statutes.

(5) The power to compel any person, including the debtor and any party in interest, by subpoena pursuant to Rule 45 of the North Carolina Rules of Civil Procedure, to give testimony or to produce and permit inspection and copying of designated books, documents, electronically stored information, electronic data, passwords, access codes, or tangible or intangible things with respect to any receivership property or any other matter that may affect the administration of the receivership.

(6) The power to manage and operate any business constituting receivership property in the ordinary course of business, including the use, sale, lease, license, exchange, collection, and disposition of property of the business or otherwise constituting receivership property, and the incurring and payment of expenses of the business or other receivership property.

(7) The power to, if authorized by an order of the court following notice and a hearing, compromise or settle claims involving receivership property.

(8) The power to enter into such contracts as are necessary for the management, security, insuring, or liquidation of receivership property, and to employ, discharge and fix the compensation and conditions for such agents, contractors, and employees as are necessary to assist the receiver in managing, securing, and liquidating receivership property.

(9) In the case of a general receiver for an entity, the power to file a bankruptcy case under the United States Code, Title 11, and to take all other action in the name of the entity without the necessity of any approval or consent of the members, managers, directors, officers, partners, trustees, or other persons that pursuant to the governance documents of the entity or applicable law would be legally required in the absence of the receiver's appointment to approve or consent to such action.

(10) The power to exercise all of the powers and authority provided by this section.

Put in a nutshell, a Limited Receiver has power only over the specific property referenced in the security agreement or other documents establishing the secured property. A General Receiver, on the other hand, has broad authority to administer all or substantially all of a debtor's non-exempt assets and business operations.

The NC4 Canterbury Order established a limited receivership since the Plaintiff was seeking appointment of a receiver because of an Event of Default under a Master Lease authorizing it to “install a manager and/or management consultant and/or a receiver of the choice.” Order ¶10.

Shame on you if you are Still Drafting Covenants not to Compete with the words “Directly or Indirectly” or you are Attempting to Enforce a Covenant not to Compete with those words

I am writing about Judge Davis’ Order in Higher Tech Realty NC, LLC v. Navigate Realty, LLC, 2026 NCBC Order 70 in order to finish writing about the five Orders of Significance in September 2026, but also to step on my soapbox once again about the danger in using the words directly or indirectly in a covenant not to compete.

In this case, the covenant not to compete which the Plaintiff was attempted to enforce contain those cursed words. Judge Davis said that:

The Court has concerns about the enforceability of Plaintiff’s noncompetition agreement for at least two reasons. First, the non-competition provision contains the words “directly or indirectly”—a phrase that our courts have often found to render a restrictive covenant unenforceable. See, e.g., Prometheus Grp. Enters., LLC v. Gibson, 2023 NCBC LEXIS 42, at 13 (N.C. Super. Ct. Mar. 21, 2023) (“North Carolina courts have repeatedly warned the drafters of restrictive covenants about the dangers of using the phrase ‘directly or indirectly’ when defining the scope of a non-compete.” (cleaned up)); Power Home Solar, LLC v. Sigora Solar, LLC, 2021 NCBC LEXIS 55, at 25 (N.C. Super. Ct. June 18, 2021) (“North Carolina courts have routinely refused to enforce noncompete provisions that prohibit former employe[e]s from ‘indirectly’ working for a competitor or similar business.” (cleaned up)).

Order ¶57.

I have been writing about the danger of using those two words in a covenant not to compete for years, starting back in 2023 and as recently as last year.

Please listen to that warning! And please become a paid subscriber below! Thank you.

Mack