Homer Simpson ran a comedy club known as the Comedy Cottage in Springfield. The

Question

Homer Simpson ran a comedy club known as the Comedy Cottage in Springfield. The business was incorporated, with Homer and his wife Marge as the corporation’s sole shareholders. The corporation leased the premises in which the club was located. Homer hired Nelson Muntz as general manager of the club. Two years later, Nelson was made vice president of the corporation and given 10 percent of its stock. Homer  experienced health problems and moved to Key West, leaving Nelson to manage the daily affairs of the business. Four years later, the ownership of the building where the Comedy Cottage was located changed hands. Shortly thereafter, the club’s lease on the premises expired. Homer instructed Nelson to negotiate a new lease. Nelson arranged a month-to-month lease but had the lease agreement drawn up in his name instead of that of the corporation. When Homer learned of Nelson’s move, he fired him. Nelson continued to lease the building in his own name and opened his own club, the Comedy Company, Inc., there. Homer sued Nelson for an injunction to prevent Nelson from leasing the building.

Who wins? Explain.

Explanation / Answer

Homer will win the case. In this situation, Nelson was employed with Homer's and under the employment contract terms, he acted against the interests of the firm by negotiating a lease in his name. In case he was not employed at Homer's he could have done the same and compete in the same space.

Injunctions are generally granted against an incomplete act or to stop parties from completing an act. In this case, Nelson had already leased the building. The court will have no choice but to ask Nelson to dissolve the leasing contract.

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