Ashland Oil, Inc. v. Tucker, 54557
| Decision Date | 14 March 1989 |
| Docket Number | No. 54557,54557 |
| Citation | 768 S.W.2d 595 |
| Parties | ASHLAND OIL, INC., Plaintiff-Respondent, v. Robert T. TUCKER, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
Mary C. Kickham, John Henry Quinn III, Armstrong, Teasdale, Kramer, Vaughan & Schlafly, St. Louis, for plaintiff-respondent.
Summers, Compton, Wells & Hamburg, Catherine S. Gidlow, Jill S. Newman, Clayton, for defendant-appellant.
Robert T. Tucker, appellant, appeals from a judgment in favor of Ashland Oil, Inc., respondent, enforcing a non-competition service agreement. The trial court found the service agreement to be a valid and enforceable contract and permanently restrained and enjoined Tucker, for the period of one year from his termination with Ashland from, in pertinent part, (a) directly or indirectly obtaining or continuing in the employment of any competitor of Ashland; (b) directly or indirectly soliciting business from any client or customer of Ashland; and (c) directly or indirectly assisting or participating in the employment, solicitation or recruiting of any other employee of Ashland who had worked for Ashland during the period and in the capacity set forth in the agreement. The order limited the restraint to the geographical area of eastern Missouri and southern Illinois. Additionally, the court ordered Ashland to pay Tucker the sum of $5,400 less ordinary payroll tax deductions for accrued vacation and severance pay. The trial court made extensive findings of facts and conclusions of law.
On appeal, Tucker contends that the trial court erred in: (1) enforcing the non-competition service agreement pursuant to Missouri law because Louisiana law applies and prohibits enforcement of the non-competition service agreement; (2) finding that payment of salary and continued employment were sufficient consideration for the non-competition service agreement; and (3) granting injunctive relief enjoining Tucker where Ashland had no legitimate business interest to protect. We affirm.
Our review shall be in accordance with the well established standard set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976), i.e., the judgment will be affirmed if it is supported by substantial evidence and is not against the weight of the evidence, and the trial court did not erroneously declare or apply the law. We defer to the trial court on matters of credibility. Rule 73.01(c)(2). Further, we view the evidence in a light favorable to the judgment.
Tucker had been working in Texas for KCL Fluids, Inc. (KCL) until 1984 when Ashland acquired KCL. KCL was a supplier of oil field chemicals primarily in the southern United States. KCL became a part of Ashland's Industrial Chemicals and Solvents division (IC & S). Ashland is incorporated in Kentucky, headquartered in Ohio, and is in the business of manufacturing and selling oil related products and chemicals on a nationwide basis. Tucker entered into an employment agreement with Ashland on July 31, 1984, to continue employment with Ashland for three years, working in substantially the same capacity as he had with KCL. Tucker continued to work and reside in Texas.
This employment agreement provided for an annual base salary of $42,800 plus an annual "supplemental compensation" of $10,000. Although the agreement does not say Tucker was subject to reassignment by Ashland, Tucker testified that his understanding was that Ashland could move him anywhere. The employment agreement also provided, in pertinent part:
3. During the term of this Agreement and for a period of one (1) year thereafter, Employee shall not engage in any activity which shall be in direct or indirect conflict with the potassium chloride, custom blending of potassium chloride, and wholesale distribution of other oil field chemicals business of Ashland without prior written consent of Ashland. Further, the one (1) year restriction shall be limited to the geographic area of the states of Texas, New Mexico, Arizona, Louisiana, Kansas, Mississippi, and Oklahoma. If the scope of any restriction contained in this paragraph is too broad to permit enforcement of such restriction to its full extent, then such restriction shall be enforced to the maximum extent permitted by Law and Employee hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction. Employee agrees that competition by him could cause irreparable injury to Ashland.
About a year after Tucker had been working for Ashland in Texas, Tucker received a call from an Ashland superior, Patrick Jayne telling him to report to St. Louis, Missouri on July 19, 1985, to hear plans for a promotion and to meet with his potential new superior, Greg Wright. Jayne told Tucker he did not know to which district he might be transferred but further details would be revealed to him in St. Louis. Tucker met Greg Wright in St. Louis who offered him a position as District Manager in the Baton Rouge district. Tucker accepted the position and then immediately went to Ashland's headquarters in Ohio, for further negotiations and to confirm his acceptance of his promotion. He also received a pay raise of $4,200. Approximately three weeks after Tucker moved to Louisiana, the service agreement was sent to him to be signed. Testimony at trial indicated that the service agreement was a uniform agreement required to be signed by Ashland employees who were being promoted. On August 19, 1985, Tucker signed and returned the service agreement to Ashland. The service agreement in the record does not reflect Ashland's acceptance. However, it is not disputed that Ashland accepted the service agreement.
The August 19, 1985 service agreement provides in pertinent part:
In consideration and as a condition of my employment and the wages or salary to be paid for my services during the term thereof by Ashland Oil, Inc., and affiliated or subsidiary companies (hereinafter collectively referred to as "Ashland"), I do hereby covenant, recognize and agree as follows:
* * *
* * *
10. In order to protect Ashland's substantial time, money and effort invested in (i) training and development of its employees, (ii) research and development, (iii) technical data, (iv) commercial plans and strategies, (v) product manufacture, marketing, selling and servicing, (vi) the development of goodwill among its customers, and (vii) other legitimate business interests, I [Tucker] will not directly or indirectly, for a period of one (1) year following the termination of my employment for any reason whatsoever, engage in work or any other activity of the kind performed for Ashland involving products or processes similar to the products or processes with which I worked.
I understand and agree that business solicitation and employment solicitation as described herein shall also be prohibited for one (1) year following the termination of my employment.
I agree not to solicit business from any client or customer of Ashland or any person responsible for referring business to Ashland, for any competitor of Ashland or for my own interests if I should become a competitor of Ashland. This restriction pertaining only to clients, customers or persons or entities who refer clients or customers if I, during the course of my employment for Ashland, have had the responsibility of developing, facilitating, maintaining and/or servicing those clients, customers, or other persons or entities who refer clients or customers.
I agree not to take any action to assist my successor employer or any other entity in employment solicitation or recruiting any other employee who had worked for Ashland during any time period when I worked for Ashland. * * * I understand that damages under this paragraph would be difficult to define and for that reason for each person about whom it is determined I have provided information in violation of this section, liquidated damages in the amount of the salary for one year of that person at Ashland shall be payable by me to Ashland.
Where my job related to sales, the one-year restriction, except for employment solicitation, shall apply only in the territory in which my services were performed during the term of my employment, or if employed more than two years, the two (2) year period immediately prior to termination of my employment.
The service agreement did not set forth a specific place of performance. Initially, Tucker's performance under the service agreement was performed in the Baton Rouge district which is entirely within Louisiana. However, in June, 1986, Tucker was again promoted and transferred to the St. Louis district which encompasses eastern Missouri and southern Illinois. He received another pay raise and later a merit increase, but the record does not indicate the exact amounts. A new service agreement was not executed.
In 1987 Tucker's relationship with his superior and Ashland began to sour. That year the "supplemental compensation" under the July 31, 1984 employment agreement expired resulting in a pay reduction of $833 per month.
On January 9, 1988, Tucker accepted employment with Transchemical Corporation (Transchem) in St. Louis as its Marketing Manager. Transchem is a competitor of Ashland for the same customers and sources of supply in the same area, primarily eastern Missouri and southern Illinois. Transchem, a comparatively small competitor of Ashland nationwide, competes almost exclusively in St. Louis.
On January 10, 1988, Tucker informed Ashland of his resignation effective January 23, 1988, but Ashland elected to treat the resignation as effective immediately. Tucker began work with Transchem in St. Louis on January 11, 1988. On January 14, 1988, Ashland sent a letter to Transchem for the purpose of bringing to its attention the August 19, 1985 service...
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