Osage Glass, Inc. v. Donovan
| Decision Date | 25 June 1985 |
| Docket Number | No. 66559,66559 |
| Citation | 693 S.W.2d 71 |
| Parties | OSAGE GLASS, INC. d/b/a Mobile Auto Glass Installation Centers a/k/a Magic Auto Glass, Appellant, v. Daniel J. DONOVAN, Jr., Respondent. |
| Court | Missouri Supreme Court |
Jack L. Campbell, W. Terrence Kilroy, Kansas City, for appellant.
Eugene F. DeShazo, Kansas City, for respondent.
The plaintiff's business consists of the installation of automobile glass. Its headquarters is in Cameron, Missouri, with installation operations in five Missouri cities, including Kansas City. It is in competition with several other glass installing operations in Kansas City, Missouri and in the rest of its territory.
The defendant, Daniel J. Donovan, was trained as an automobile mechanic and glass installer in military service and was separated with a high specialist rating. On separation he sought and obtained employment with plaintiff in Cameron as a glass installation trainee. At the time he was employed he signed an employment contract reading as follows:
I, Daniel J. Donovan, being a prospective employee of Glass Speciality Company, 1 a Corporation, authorized to do business in the State of Missouri, in consideration of my employment with the said Glass Specialty Company and the special training and technical education to be furnished me, at no cost to myself, by the Glass Specialty Company, do hereby acknowledge and agree, if accepted for employment by the Glass Specialty Company, to diligently apply myself to any and all special training and educational programs provided by the Glass Specialty Company; and do further acknowledge and agree that the Glass Specialty Company will be furnishing me special training and experience in sales and promotion and business development of Glass Specialty Company and that I will have access to confidential customer lists of Glass Specialty Company that that said Glass Specialty Company's auto glass installation business covers the entire State of Missouri; and that I promise and covenant that I will not, during the period of three years from and after termination of my employment, for any reason, with Glass Specialty Company, associate myself with or engage in, directly or indirectly, any business which is in competition with that of Glass Specialty Company in the automotive glass installation business, or any of Glass Specialty Company's affiliated companies, within the State of Missouri; nor will I solicit or in any other manner work for or assist any competitive automotive glass installation business within the State of Missouri for a period of three years from and after the termination of my employment, for any reason with Glass Specialty Company.
WITNESS MY HAND, that I have read the within and foregoing agreement and understand its contents and that if accepted for employment will abide by the terms hereof, this 7 day of April, 1980.
He was promoted to installer after two to four weeks and in November, 1980 became operations manager in Kansas City, where plaintiff was the first company to engage in the mobile installation of automobile glass. For description of his duties in Kansas City we borrow from the opinion of the Court of Appeals, which states the facts from a point of view most favorable to the defendant, and consistent with the defendant's testimony, as follows:
Magic serviced both insurance companies and agencies, fleet operators, independent body shops, automobile dealerships and specialty vehicle manufacturers. Donovan had contact with these customers through his employment as operations manager for Magic. With respect to insurance agencies or companies, Magic was contacted by either the agent or a customer of the agent advising Magic that an automobile windshield needed repair. If an insurance company made the initial contact, Magic would contact the agent or claims department of the company to verify coverage, and if verified Donovan would send installers to the location to have the glass repaired. The agent or the company was then billed directly and the insurance company's customer was billed for any deductible. Magic would service automobile body shops and car dealerships in the same manner, but Donovan's contact with dealerships was either with the service manager or the body shop manager and the evidence shows that the initial contact was made with Donovan by those managers rather than being initiated by him. The calls to Magic were either taken by the secretary and referred to Donovan, or in some instances were taken by him when Magic's three telephone lines were tied up with incoming calls which the secretary could not therefore handle.
According to Kratofil, Donovan did bring in some new customers as new accounts: Greg's Custom Vans; M & M Body Shop, Inventory Reduction Sales; Melton Trucks,; and Vee Village. Donovan testified that he did have calling cards with "Glass Specialty System" imprinted with his name as operations manager. He left these on windshields when he made a call to show he had been there when a customer was absent. The record shows that Donovan hired a glass installer, Baskin, and terminated a secretary, Robyn Witson. He handled personnel problems, recorded and monitored product breakage and damage, and was responsible for the day-to-day operations of Magic's Kansas City facility. He was also involved in establishing Magic's labor relations.
Donovan was the person in charge of the Kansas City operation. The salesman, Kratofil, was not technically trained. The chief operating operator, Chamberlain, was in Cameron.
Donovan continued as operations manager until October of 1982, at which time he gave two weeks notice of his intention to resign. Chamberlain relieved him of his duties immediately, and he accepted employment with a competition, W.M. Kryger, d/b/a Installers Unlimited, in Kansas City, Missouri. Plaintiff brought suit seeking temporary and permanent injunction.
Evidence was heard on December 27, 1982, apparently on the issuance of a temporary injunction. On January 5, 1983, the trial court entered judgment as follows:
* * *
* * *
Further, the Court specifically finds that plaintiff did not possess a trade secret, and that plaintiff's customer list was nothing more than could have been compiled from directories or other generally available sources. Therefore, the covenant not to compete at issue served only to prevent defendant's economic mobility and reduce his bargaining power and did not protect any legitimate business interest of plaintiff.
* * *
* * *
Both parties then stipulated that the Court had heard all required evidence and that final judgment could be entered. The plaintiff appealed and the Court of Appeals, Western District, affirmed the denial of relief pointing out that there was no showing that Donovan used his customer contacts to plaintiff's detriment, or made up a customer list, or tried to use the plaintiff's alleged "trade secret" of bidding methods on GSA contracts on behalf of his new employer. The Court of Appeals then discussed equitable considerations, holding that the harm to the plaintiff was outweighed by the detriment to Donovan in the use of his artisan skills. We granted transfer to probe the possible conflict between the opinion of the Court of Appeals and other cases in the important area of covenants not to compete.
We of course take the case as on original appeal. The trial court found in favor of the defendant, and review is under the standard of Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976); Rule 73.01. We examine the reasons given in the trial court's judgment entry, and in the Court of Appeals opinion, as probative of the contentions advanced by Donovan and the courts' response to those contentions. We are convinced that, based on the uncontradicted evidence in the record, there was legal error in the denial of relief. We therefore reverse and remand with directions to grant an injunction as prayed.
Much has been written about an employee's covenant against working for his employer's competitors. Agreements of this kind restrain commerce and limit the employee's freedom to pursue his or her trade. Enforcement of such agreements therefore, is carefully restricted. Orchard Container Corp. v. Orchard, 601 S.W.2d 299, 303 (Mo.App.1980), Gunn, J. Covenants against competition must serve a proper interest of the employer in protecting the...
To continue reading
Request your trial
-
Bayly, Martin & Fay, Inc. v. Pickard
... ... American Prosthetics, Inc., 379 N.W.2d 909-10 (Iowa 1986); Osage Glass, Inc. v. Donovan, 693 S.W.2d 71, 74 (Mo.1985); Follmer, Rudzewicz & Co., P.C. v. Kosco, 420 ... ...
-
Cambridge Engineering, v. Mercury Partners
... 879 N.E.2d 512 ... CAMBRIDGE ENGINEERING, INC., Plaintiff-Appellant, ... MERCURY PARTNERS 90 BI, INC., d/b/a Brucker ... 879 N.E.2d 523 ... Osage Glass, Inc. v. Donovan, 693 S.W.2d 71, 74 (Mo.1985) ("Covenants against ... ...
-
DelVecchio Reporting Services, LLC v. Edwards
... ... Caring Hearts Personal Home Services, Inc. v ... Hobley , 35 Kan.App.2d 345, 130 P.3d 1215 (CT of App., ... Several cases are cited ... In Osage v. Glass, Inc. v. Donovan , 693 ... S.W.2d 71 (MO, 1985), the ... ...
-
Superior Gearbox Co. v. Edwards
... ... Edwards (Edwards), John Carter, Robert Bell, and SCG Inc., 1 alleging eight contractual and commercial trade violations. 2 ... Childers, 254 S.W.2d 275 (Mo.App.1953); and Kreger Glass Co. v. Kreger, 49 S.W.2d 260 (Mo.App.1932) ... Based on ... See, e.g., Osage Glass, Inc. v. Donovan, 693 S.W.2d 71 (Mo. banc 1985); Ashland Oil, Inc ... ...
-
Missouri. Practice Text
...not to compete). 28. See, e.g. , Healthcare Servs. of the Ozarks , 198 S.W.3d at 610. 29. See id. ; Osage Glass, Inc. v. Donovan, 693 S.W.2d 71, 73-74 (Mo. banc 1985) (ruling that “[c]ovenants against competition must serve a proper interest of the employer in protecting the good will of a ......
-
Missouri
...not to compete). 28. See, e.g. , Healthcare Servs. of the Ozarks , 198 S.W.3d at 610. 29. See id. ; Osage Glass, Inc. v. Donovan, 693 S.W.2d 71, 73-74 (Mo. banc 1985) (ruling that “[c]ovenants against competition must serve a proper interest of the employer in protecting the good will of a ......
-
Covenants Not to Compete a Kansas Law Overview
...898 F. Supp. 1491. [FN126]. Id. at 1502. [FN127]. Id. [FN128]. Uarco, 584 F. Supp. at 1262. [FN129]. Osage Glass, Inc. v. Donovan, 693 S.W.2d 71, 75 (Mo. 1985) (en banc). [FN130]. 11 Kan.App.2d 459, 726 P.2d 287. [FN131]. Id. at 291. [FN132]. Id. at 292. [FN133]. Id. [FN134]. E.g., Showe-Ti......