Dana F. Cole & Co. v. Byerly

• Decision Date: 18 June 1982
• Docket Number: No. 82-030,82-030
• Citation: 320 N.W.2d 916,211 Neb. 903
• Parties: DANA F. COLE & COMPANY, a partnership, Appellant, v. Kenneth BYERLY, Appellee.
• Court: Nebraska Supreme Court

Page 916

320 N.W.2d 916

211 Neb. 903

DANA F. COLE & COMPANY, a partnership, Appellant, v. Kenneth BYERLY, Appellee.

No. 82-030.

Supreme Court of Nebraska.

June 18, 1982.

Syllabus by the Court

1. Equity: Appeal and Error. In an equity action we review the record de novo and reach an independent conclusion without being influenced by the findings of the trial court, except that where credible evidence is in conflict, we must give weight to the fact that the trial court saw the witnesses and observed their demeanor while testifying.

2. Restrictive Covenants. The considerations to be balanced in determining whether a contract in restraint of trade is valid are the degree of inequality in bargaining power; the risk of the covenantee losing customers; the extent of respective participation by the parties in securing and retaining customers; the good faith of the covenantee; the existence of sources or general knowledge pertaining to the identity of customers; the nature and extent of the business position held by the covenantor; the covenantor's training, health, education, and needs of his family; the current conditions of employment; the necessity of the covenantor changing his calling or residence; and the correspondence of the restraint with the need for protecting the legitimate interests of the covenantee.

Rollin R. Bailey of Bailey, Polsky, Cada & Todd, Lincoln, for appellant.

Charles R. Maser of Harold E. Connors & Charles R. Maser, P. C., Greeley, for appellee.

Heard before KRIVOSHA, C. J., and BOSLAUGH, McCOWN, CLINTON, WHITE, HASTINGS, and CAPORALE, JJ.

WHITE, Justice.

This is an action in equity brought by the plaintiff, Dana F. Cole & Company, a Lincoln-based accounting partnership, to enforce a covenant not to compete against a former employee.

The case was tried to the District Court of Holt County, Nebraska. The trial court found that the contract was valid, denied the plaintiff's request for an injunction, and awarded damages of $1,000 to the plaintiff.

Since this is an equity case, we review the record de novo and reach an independent conclusion without being influenced by the findings of the trial court, except that where credible evidence is in conflict, we must give weight to the fact that the trial court saw the witnesses and observed their demeanor while testifying. Philip G. Johnson & Co. v. Salmen, 211 Neb. 123, 317 N.W.2d 900 (1982); Sturm v. Mau, 209 Neb. 865, 312 N.W.2d 272 (1981); Schmidt v. Henderson, 148 Neb. 343, 27 N.W.2d 396 (1947).

The evidence reveals that the plaintiff has been engaged in the public accounting business since 1949, with its principal office in Lincoln and five branch offices located in Ord, Broken Bow, Grand Island, Beatrice, and Atkinson-O'Neill. Kenneth Byerly was hired by Dana F. Cole & Company in August 1974 to be office manager of the O'Neill, Nebraska, branch office. Byerly began work the last week of August 1974. During the period from August through December, Byerly worked under the assistant manager at the O'Neill office to learn the operation of the branch office. On December 26, 1974, a written employment agreement was signed by the parties. Byerly assumed the duties of manager on January 1, 1975. The employment agreement contained the following clause: "For a period of two years after the termination of this Agreement, Byerly will not, within the area hereafter described, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner, with any enterprise carrying on the business of public accounting, public bookkeeping, tax preparation, or the operation of a business advisory or consulting service, or any other business similar to the type of business conducted by the company in the State of Nebraska at the time of the termination of this Agreement. The area within which such activities are prohibited is within a radius of 75 miles in each direction from the city limits of Atkinson, Nebraska."

On August 30, 1981, defendant notified the plaintiff in writing that he was resigning effective September 30, 1981. Mr. Warren Hinze, managing partner of plaintiff, testified that after receipt of the written resignation, he made immediate contact with Byerly to learn why he was resigning. Byerly indicated to Hinze that he was disappointed in not...