Court Grants American Furniture Manufacturing Preliminary Injunction Against Gerald Washington

Furniture World Magazine

Judge Sharion Aycock has granted American Furniture Manufacturing a preliminary injunction against Gerald Washington, ordering him to honor the non-compete agreement he signed with American Furniture Manufacturing. Pontotoc based American Furniture filed a lawsuit against Washington and others in The Circuit Court of Lee County, Mississippi, to prevent them from doing business in the upholstered furniture industry. According to the filing, American Furniture contended that Washington, along with several former American Furniture executives, was involved in the formation of Affordable Furniture Manufacturing Co., Inc., a direct market competitor. In addition to Gerald Washington, American Furniture also sought to enjoin Affordable and its owners, Jim Sneed and Terry Austin. Judge Aycock ruled that Washington had indirectly violated his non-compete agreement through involvement with Affordable. The order also says that “Austin, Sneed and Affordable cannot assist, conspire and/or act in concert with Gerald Washington to accomplish any actions that Gerald Washington is prohibited from taking or doing under his non-compete agreement.” Affordable is allowed to continue operations, as long as they “cut the strings” with Washington. In the order, Judge Aycock has restricted Affordable from accepting any assistance from Gerald Washington or others acting in participation with him, and prohibits Washington from appearing in Affordable's Highpoint showroom. “We are extremely pleased with the judge's ruling,” said Matt Harrison, chairman of American Furniture Manufacturing's holding company. “The judge's ruling validates our contention that Gerald Washington had been indirectly violating his non-compete agreement. With this ruling in place, it will be extremely difficult for Washington to assist Affordable.” American Furniture continues to seek $50 million in damages and a permanent injunction against the defendants. Attorneys are planning to conduct additional depositions and gather more evidence for a possible trial. The preliminary injunction will remain in effect until the lawsuit is completed. In late July, an investor group led by Hampshire Equity Partners of New York and Hunt Private Equity Group in Dallas, as well as other investors, including American's new management team, purchased American Furniture. The new ownership team plans to expand on American Furniture's successful business model of efficiency and value in the promotional-priced upholstered furniture industry. American Furniture is the nation's largest company devoted totally to upholstered promotional furniture, and produces stationary furniture, motion furniture, recliners and occasional chairs for wholesale and retail customers across the United States and Canada.