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Wellness company alleges breach of contract against MGM Resorts

A lawsuit can be costly for a business no matter which side of the issue the company is on. Business owners in Nevada should know what to do when facing issues such as breach of contract litigation. Putting the right measures in place could prevent a long and expensive legal battle. As a recent incident illustrates, even claims that may appear baseless could cause trouble for a company.

In 2010, MGM Resorts contracted with a company called Wellness Coaches USA to help its employees lose weight. In June of this year, MGM let the company know that it wanted to end its contract. According to an attorney for MGM, the company could save $500,000 a year by going with another vendor. At the time, 22 coaches were working in Las Vegas casino-hotels and at other MGM locations.

According to a lawsuit that Wellness Coaches USA filed, MGM and its new vendor violated contract clauses by working together to hire coaches away from Wellness Coaches USA. Some coaches allegedly downloaded trade secret information and sent the data to their email accounts with MGM. The lawsuit also asserts that MGM did not give the appropriate 60-day notice for 11 agreements the company had.

Both MGM and its new wellness vendor deny any wrongdoing. As a result of the litigation, MGM’s attorney noted that more than 20 people have lost their jobs because the new vendor did not hire any of the coaches from the old vendor. A Nevada federal judge has filed an injunction against the new vendor. Any business owner with questions regarding contract issues should consult with an attorney.

Source: Daily Journal, “MGM Resorts sued by ex-wellness coach company for breach of contract, stealing trade secrets,” Sept. 25, 2014


John P. Aldrich
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