Asheville Associates, Inc. v. Miller
| Citation | 255 N.C. 400,121 S.E.2d 593 |
| Decision Date | 27 September 1961 |
| Docket Number | No. 106,106 |
| Parties | ASHEVILLE ASSOCIATES, INC., a Corporation, v. John William MILLER. ASHEVILLE ASSOCIATES, INC., a Corporation, v. Frank L. BERMAN. |
| Court | North Carolina Supreme Court |
Van Winkle, Walton, Buck & Wall, by O. E. Starnes, Jr., Asheville, Smith, Moore, Smith, Schell & Hunter, by Bynum M. Hunter, Greensboro, for defendants-appellants.
Ward & Bennett, Asheville, for plaintiff-appellee.
Courts generally refuse to enforce restrictive covenants in employment contracts unless they are (1) in writing, (2) entered into at the time and as a part of the contract of employment, (3) based on valuable considerations, (4) reasonable both as to time and territory embraced in the restrictions, (5) fair to the parties, and (6) not against public policy.
The contracts here involved are in writing. They were found to have been entered into as a part of the contracts of employment. The mutual agreements in these contracts were sufficient considerations to support the obligations undertaken. The time--one year, the territory--14 counties in which Miller had previously worked and 10 counties in which Berman previously worked, are not unreasonable. Welcome Wagon Intern., Inc. v. Pender, 255 N.C. 244, 120 S.E.2d 739, and the many authorities cited therein.
The defendants assert the restrictive covenants were not based on valuable considerations and were not a part of the contracts of employment with the corporation. However, each of the defendants signed an original contract with the partnership. It contained the restrictive covenants. The partners incorporated. The corporation succeeded to the partnership in the insurance field. For some time after incorporation the defendants operated according to the terms of their contracts with the partnership. However, new contracts between the corporation and the defendants were executed and these contracts likewise contained the restrictions. Judge Campbell held, and properly so, that the restrictive covenants in the contracts with the corporation were based on valuable consideration.
The time and the territory in which the covenants were to be enforced were reasonable. Thompson v. Turner, 1960, 245 N.C. 478, 96 S.E.2d 263, 83 N.C.L.R. 396; Delmar Studios of the Carolinas, Inc. v. Goldston, 249 N.C. 117, 105 S.E.2d 277; Sonotone Corporation v. Baldwin, 227 N.C. 387, 42 S.E.2d 352.
The defendants rely on the case of Kadis v. Britt, 224 N.C. 154, 29 S.E.2d 543, 152 A.L.R. 405. In that case Britt was employed as a clothing salesman in a retail store in Goldsboro at $27.50 per week. The restrictive covenant covered any business that Kadis might be engaged in if and when Britt left his employment. The restriction applied not only to Britt, but to his wife and other members of his immediate family. After two years Kadis discharged Britt on the ground his services were no longer needed. Britt had a family to support. After his discharge he accepted employment as a salesman in another clothing store in...
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...court is only requiring the defendants to do what they agreed to do." Asheville Associates v. Miller and Asheville Associates v. Berman, 255 N.C. 400, 404, 121 S.E.2d 593, 595 (1961). "While the law frowns upon unreasonable restrictions, it favors the enforcement of contracts intended to pr......
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