Cape Mobile Home Mart, Inc. v. Mobley

• Decision Date: 07 November 1989
• Docket Number: Nos. 55845,55906,s. 55845
• Citation: Cape Mobile Home Mart, Inc. v. Mobley, 780 S.W.2d 116 (Mo. App. 1989)
• Parties: CAPE MOBILE HOME MART, INC., Respondent, v. Lonnie D. MOBLEY, Appellant.
• Court: Missouri Court of Appeals

Page 116

780 S.W.2d 116

CAPE MOBILE HOME MART, INC., Respondent, v. Lonnie D. MOBLEY, Appellant.

Nos. 55845, 55906.

Missouri Court of Appeals,

Eastern District,

Southern Division.

Nov. 7, 1989.

Larry H. Ferrell, Nancy L. Browne, Cape Girardeau, for appellant.

Michael Andrew Price, Cape Girardeau, for respondent.

CRIST, Judge.

Lonnie D. Mobley (employee) appeals from an order enforcing a noncompete agreement between employee and Cape Mobile Home Mart, Inc. (employer). The trial court enjoined employee from competing in the retail sales of mobile homes within thirty miles of employer's places of business for two years from the date of employee's termination of employment February 22, 1988. The trial court further enjoined employee from divulging any confidential information or trade secrets gained as a result of his employment with employer. We affirm.

Employer maintains and operates more than fifteen mobile home sales lots and locations within and outside the State of Missouri. One of employer's facilities at which it does business under the name of Dexter Mobile Home Sales, is located in Dexter, Missouri, and has been maintained and operated by employer since prior to April 24, 1987.

On April 24, 1987, employee was hired as a salesman by employer and was assigned to the Dexter Mobile Home Sales location. On that date, and as a part of the consideration for employment, employee signed a document entitled "Covenant not to Compete or Divulge Employer's Secrets." Employee had a chance to review and discuss the document before signing it. All employees were required to sign the covenant.

Shortly after he was hired, employee, who had no experience in the mobile home business, participated in a three-day orientation program given by employer to each of its new employees. The program consisted largely of an explanation of employer's operations, policies and procedures. Employee was advised he and other salesmen would have access to a great deal of confidential information regarding the business and such information should not be shared with competitors or anyone else. The purpose of giving this confidential information to the salesmen was to promote in-house competition and employee goodwill. In addition to the orientation program, employer provided sales training for employee and other employees on a quarterly basis through a consulting firm.

Employee's employment with employer lasted about ten months. Employee was considered by employer as a fair to below average salesman. His salary was based on a percentage of the sales he generated, but he was guaranteed a draw of $536 per month. In only three months out of the ten did employee earn more than the guaranteed $536.

During employee's employment with employer, employee received extensive confidential information about employer's business including:

A. Monthly and year-to-date sales and profit statistics and rankings for all of plaintiff's facilities and salesmen. Copies of these reports were given monthly to all salesmen, but no one outside the company had access to the reports;

B. Quarterly business and sales reports for the Dexter Mobile Homes location which include detailed income, expense and profit figures, inventory and pricing analyses, business projections and other critical information. Copies of these reports were given quarterly to all salesmen, but no one outside the company had access to the reports;

C. Companywide operations and procedures manual listing all of employer's policies and procedures, employee salary arrangements and benefits, inventory lines and limits on each sales location. Employee had access to the manual but it was not available to anyone outside the company. To prevent disclosure of the information in the manual to non-employees, company policy was enacted that any employee who lost a copy of the manual would be fined $1,000; and

D. Customer list for the Dexter Mobile Home facility in which every customer or potential customer who had visited the location was registered. The list names approximately 1200 past and/or prospective customers. The salesmen had access to this list, but it was not available to anyone outside the company.

Employer was the sole mobile home dealer in Dexter until two or three days prior to February 22, 1988, when Ferrell Mobile Homes opened a sales lot in Dexter within a block from employer's location. Ferrell Mobile Homes is the chief competitor of employer in the southeast Missouri area, and Ferrell Mobile Homes maintains and operates mobile homes sales lots located in several of the same towns and cities as employer.

On February 22, 1988, employee's employment was terminated either by mutual consent or by employee's voluntary act of quitting. A few days prior to February 22, 1988, employee talked with Ferrell Mobile Homes personnel about the possibility of his working for Ferrell Mobile Homes in Dexter. On February 22, 1988, employee again contacted the manager at Ferrell Mobile Homes and asked to be hired. Less than ten days after employee's employment terminated with employer, employee went to work as a salesman for Ferrell Mobile Homes. Shortly after employee went to work at Ferrell Mobile Homes in Dexter, Ferrell advertised employee as a salesman for Ferrell. Since February 22, 1988, employee has worked for Ferrell Mobile Homes at its Dexter facility as well as its Cape Girardeau facility.

Thereafter, employer filed suit for breach of contract, temporary restraining order, temporary injunction and permanent injunction. Ferrell Mobile Homes agreed to pay at least part of employee's legal fees. On June 29, 1988, a hearing was held and evidence was presented. On October 27, 1988, the trial court entered extensive findings of fact, conclusions of law and ordered employee to be restrained and enjoined from competing in the retail sale of mobile homes within thirty...