Amdar, Inc. v. Satterwhite, 7710SC694

• Decision Date: 01 August 1978
• Docket Number: No. 7710SC694,7710SC694
• Citation: 246 S.E.2d 165,37 N.C.App. 410
• Court: North Carolina Court of Appeals
• Parties: AMDAR, INC. v. Jimmy Dale SATTERWHITE.

Page 165

246 S.E.2d 165

37 N.C.App. 410

AMDAR, INC. v. Jimmy Dale SATTERWHITE.

No. 7710SC694.

Court of Appeals of North Carolina.

Aug. 1, 1978.

Boyce, Mitchell, Burns & Smith by G. Eugene Boyce and Lacy M. Presnell, III, Raleigh, for plaintiff-appellee.

Manning, Fulton & Skinner by Howard E. Manning, Jr., Raleigh, for defendant-appellant.

BRITT, Judge.

Defendant contends first that the trial court erred in finding and concluding "that the contract between plaintiff and defendant was supported by valuable consideration and reasonable as to time, terms and territory". We find no merit in this contention.

While defendant suggests in the statement of his first contention lack of valuable consideration for the contract, he does not argue that point in his brief. When defendant's counsel was questioned about this on oral argument, he admitted that evidence at the hearing showed that the agreement in question was preceded by similar annual agreements for the duration of defendant's employment with plaintiff. We therefore hold that this case differs from Wilmar, Inc. v. Liles and Wilmar, Inc. v. Polk, 13 N.C.App. 71, 185 S.E.2d 278 (1971), Cert. denied, 280 N.C. 305, 186 S.E.2d 178 (1972).

In those cases the covenants not to compete were entered into after the employees had been employed for some time and the purported consideration, a pension plan and an agreement to pay one-half of the employee's gasoline bills, were held illusory as they were both subject to amendment solely within the discretion of the employer. Here the new contract of employment binds the employer for an additional year. This detriment to him is sufficient consideration to support the covenant not to compete.

Both parties concede that for restrictive covenants not to engage in competitive employment to be enforceable they must be (1) in writing, (2) supported by valid consideration, and (3) reasonable as to terms, time and territory. Greene Co. v. Kelley, 261 N.C. 166, 134 S.E.2d 166 (1964); Henley Paper Co. v. McAllister, 253 N.C. 529, 117 S.E.2d 431 (1960); Mastrom, Inc. v. Warren, 18 N.C.App. 199, 196 S.E.2d 528 (1973).

In his brief defendant states that he does not argue that the provisions of Paragraph 7A of the agreement are unreasonable as to duration or territory, but he insists that the terms of the agreement are unreasonable " because of the restrictions placed upon defendant's right to employment upon termination of his employment with the plaintiff". He argues that this case is controlled by Henley Paper Co. v. McAllister, supra. We disagree.

In Henley Paper Co., the employee, a salesman in the fine paper trade, agreed that he would not "for a period of three years after the termination of this contract, regardless of the cause or manner of said termination, either directly or indirectly engage in the manufacture, sale or distribution of paper or paper products within a radius of 300 miles of any office or branch of the Henly Paper Company or its subsidiary divisions, nor will he aid, assist or have any interest in any such business within the limits of the territory or during said time as herein provided . . . ." The trial court denied plaintiff injunctive relief and it appealed. In affirming the trial court, the Supreme Court held that the agreement was without consideration since defendant signed it several months after he began working with the plaintiff. The Supreme Court further held that since defendant's employment was confined to the fine paper trade, a covenant that he would not engage, either directly or indirectly, in the manufacture, sale or distribution of paper or paper products in a...