Bennett v. Storz Broadcasting Co.

• Decision Date: 02 April 1965
• Docket Number: No. 39538,39538
• Citation: 270 Minn. 525,134 N.W.2d 892
• Parties: William BENNETT, Appellant, v. STORZ BROADCASTING CO., Respondent.
• Court: Minnesota Supreme Court

Page 892

134 N.W.2d 892

270 Minn. 525

William BENNETT, Appellant, v. STORZ BROADCASTING CO., Respondent.

No. 39538.

Supreme Court of Minnesota.

April 2, 1965.

Syllabus by the Court

1. On motion for summary judgment the moving party has the burden of proof and the nonmoving party has the benefit of that view of the evidence which is most favorable to him. In passing upon a motion for summary judgment, the sole function of the trial court is to determine whether there is an issue of fact to be tried.

2. In the protection of his own contractual rights, a person may invade another's contractual rights where the former's interest is equal or superior to that of the latter and where such invasion is made with the honest purpose of fairly bettering one's own business, trade, or employment, and not for the primary object of destroying another's employment or business.

3. Covenants in employment contracts which restrict an employee's right to work after termination of his employment are in partial restraint of trade and are looked upon with disfavor, cautiously considered, and carefully scrutinized.

4. When such restrictive covenants are entered into for a just and honest purpose, are for the protection of a legitimate interest of the party in whose favor they are imposed, are reasonable as between the parties, and are not injurious to the public, the restraint may be valid.

5. In construing restrictive covenants in an employment contract, the test employed is whether or not the restraint is necessary for the protection of the business or good will of the employer, and if so, whether the stipulation has imposed upon the employee any greater restraint than is reasonably necessary to protect the employer's business, regard being had to the nature of the character of the employment, the time for which the restriction is imposed, and the territorial extent of the locality to which the prohibition extends.

6. The validity of employment contracts containing covenants which restrict the actions of the employee after termination of the employment depends upon the circumstances in each particular case. The merits of a dispute arising from the provisions of a restrictive clause in an employment contract cannot always be determined by an examination of the contract itself. The validity of the contract in each case must be determined on its own facts and a reasonable balance must be maintained between the interests of the employer and the employee.

7. The defense of justification ordinarily presents a fact issue for the jury as to reasonable conduct under all of the circumstances of the case.

8. The burden of proving justification is upon the defendant.

Rice & Efron, and Patrick Murray, Minneapolis, for appellant.

Robins, Davis & Lyons, and Sidney Feinberg, Minneapolis, for respondent.

MURPHY, Justice.

This is an appeal from a judgment entered pursuant to an order granting summary judgment to defendant in an action brought for tortious interference with an employment agreement.

From the record it appears that on January 5, 1960, plaintiff, William Bennett, a radio announcer, entered into a contract with defendant, Storz Broadcasting Company, which operates radio station WDGY, to work as a radio announcer for a salary of $1,083.33 per month, payable semimonthly. The contract was for a period of one year with two separate options permitting the company to extend the term for one-year periods at a stated increase in monthly salary. The contract included the following restrictive agreement:

'The Artist further agrees and covenants that upon termination of his employment with the Company for any reason, he shall not directly or indirectly, for a period of 18 months from the date that Artist should cease to be employed by the Company accept employment from, or appear on, or become financially interested in, any radio or television station whose station, offices or antenna is located within a radius of 35 miles of any city in which the Company owns or operates, or has entered into an agreement to purchase or operate a broadcasting station.'

At the end of the first year plaintiff was notified that his contract would not be renewed, but that, if he wished, he could remain on as an employee at union wages which would amount to a reduction of his salary by one-half. Plaintiff resigned on January 17, 1961, and thereafter entered into contract negotiations with KSTP, another broadcasting station located within a 35-mile radius of defendant's Minneapolis station. This fact came to the attention of defendant, and on February 1, 1961, it wrote the management of KSTP as follows:

'We (attorneys for defendant) are authorized to advise you that if there is any violation of the contract referred to on the part of Mr. Bennett that we will be instructed to institute appropriate legal proceedings.'

KSTP thereupon withdrew from further negotiations with plaintiff. Plaintiff contends that by the letter defendant intentionally and wrongfully conspired with its attorneys for the purpose of inducing KSTP not to carry out its declared intention to hire him and that he was thereby deprived of prospective employment to his damage in the sum of $25,000.

Plaintiff subsequently secured employment as an announcer with radio station WLOL, which is also located within a 35-mile radius of defendant's station. About the same time this action for wrongful interference was started by plaintiff, defendant sued to enjoin plaintiff from working for WLOL. Plaintiff prevailed in that action. The findings of the court therein, which are a part of the record in this case, recite:

'That Storz Broadcasting Co., a corporation (hereinafter called plaintiff), is a corporation duly organized and existing under the laws of the State of Nebraska. That plaintiff is authorized to do business in this state and owns and operates radio station WDGY in the City of Minneapolis, Minnesota. That plaintiff also operates some five other broadcasting stations located in Kansas City, Missouri; St. Louis, Missouri; Oklahoma City, Oklahoma; New Orleans, Louisiana; and Miami, Florida.

'That William Bennett (hereinafter called defendant), a thirty-seven year old married man with a dependent mother, has been a radio announcer and disk jockey with various radio broadcasting stations throughout the United States for about eleven years. That previously to defendant's last employment with plaintiff, the subject of this lawsuit, he was employed by plaintiff at WTIX, New Orleans, La., and WDGY, Minneapolis, Minn., under a three year contract terminating in January of 1959.

'That in December of 1959 defendant's radio announcing position with KFRC, San Francisco, California, terminated. That on about January 1, 1960, plaintiff's then WDGY manager, C. B. Clarke, Jr., telephonically communicated with defendant in San Francisco offering him a job with WDGY. That shortly thereafter Mr. Todd Storz, president of plaintiff, phoned defendant welcoming him back and, among other things, informed him that he left the matter of salary to his station manager. That Mr. Clarke again phoned defendant informing the latter that he and his wife were flying out to California with the contract. That on January 5, 1960, Mr. Clarke presented to defendant in San Francisco, California, several duplicate copies of the contract agreement in question. That defendant signed each of the copies in the presence of Mr. Clarke who in turn signed as a witness to defendant's signature. That Mr. Clarke took possession of all copies for appropriate execution by plaintiff. That thereafter one such copy signed by Mr. Todd Storz as president of plaintiff was delivered to defendant, the exact time and place undisclosed by the evidence.

'That on January 18, 1960, defendant commenced work in Minneapolis for plaintiff under said contract. That on about January 1, 1961, the then new station manager of WDGY, Edward M. Morgan, informed defendant he was being removed from his day-time schedule to the all night schedule. That shortly thereafter said manager of plaintiff informed defendant his contract would not be renewed for another year but as an alternative he could remain on at union wages, thereby in effect reducing his salary under the terms of said contract by one-half. That said alternative offer being unsatisfactory to defendant, he left the plaintiff's employment on January 17, 1961. That on about February 27, 1961, defendant secured employment as a radio announcer and disk jockey with the Minneapolis, Minn., radio station WLOL whose facilities are located within a radius of 35 miles of the City of Minneapolis.

'That paragraph 3 of the contract provides employment of defendant by plaintiff for a term of one year commencing January 18, 1960, reserving to plaintiff two separate options to extend the term of defendant's employment under the same terms and conditions for succeeding like periods of one year but at an increased amount of compensation. That paragraph 7 of said contract contained a restrictive covenant providing that defendant shall not for a period of 18 months from the cessation of his employment with plaintiff accept employment from or appear on or become financially interested in any radio or television station located within 35 miles of any city in which plaintiff operates a broadcasting station.

'That defendant is considered in the radio broadcasting industry and among those dealing in services of radio advertising to be an above-average radio announcer and disk jockey, but the evidence does not reflect that his abilities are unique, unusual, extraordinary, or of great value.

'That whatever abilities and capacities defendant possessed during the period of the contract here involved were not developed during his employment with plaintiff nor did the plaintiff expend substantial sums of money to advertise or to develop or to feature defendant or his program. That on the contrary and as early as June and...