Economy Grocery Stores Corp. v. McMenamy

• Citation: 195 N.E. 747,290 Mass. 549
• Parties: ECONOMY GROCERY STORES CORPORATION v. McMENAMY.
• Decision Date: 02 May 1935
• Court: United States State Supreme Judicial Court of Massachusetts

290 Mass. 549

195 N.E. 747

ECONOMY GROCERY STORES CORPORATION v. McMENAMY.

Supreme Judicial Court of Massachusetts, Suffolk.

May 2, 1935

Suit in equity by the Economy Grocery Stores Corporation against John W. McMenamy. From a final decree dismissing the bill entered by order of the judge of the superior court plaintiff appeals.

Decree affirmed.

Appeal from Superior Court, Suffolk County; T. J. Hammond, Judge.

A. H Grauman, of Boston (L. M. Ring, of Boston, on the brief), for plaintiff.

Edward Donovan, of Boston, for defendant.

RUGG Chief Justice.

This suit is brought to enjoin the defendant, a former employee of the plaintiff, from engaging in business in violation of the provisions of a written contract signed by the defendant. The trial judge made findings of facts and entered a decree dismissing the bill. The plaintiffs appeal brings the case here. The facts found must be accepted as true since the evidence is not reported. The question to be determined is whether on those facts the decree was right. Nelson v. Wentworth, 243 Mass. 377, 137 N.E. 646; Seager v. Dauphinee, 284 Mass. 96, 98, 187 N.E. 94.

The facts relevant to the grounds of this decision are these: The defendant, on May 15, 1931, entered the service of the plaintiff as manager of the meat department of its store at Squantum. On November 10, 1932, the defendant signed an employment agreement with the plaintiff after being informed by the district supervisor of the plaintiff that such ‘ agreement would have to be signed or his employment terminated.’ This contract in writing and under seal was signed by the defendant and not by the plaintiff. It provided in part that ‘ Whereas, said Employer has agreed to employ said Employee to work for it in the conduct of its retail grocery, meat and/or food supplies business. Now, Therefore, in consideration of the employment of said Employee by said Employer and the weekly compensation now or hereafter to be paid to said Employee, said Employee agrees that: 1. He will during the term of said employment devote his entire business time and energy in behalf of said Employer. 2. He will keep secret and not divulge to any person, firm or corporation, except by express order of said Employer, the names and addresses of and/or all information concerning each and every customer of the said Employer. 3. In the event that his employment by said Employer shall terminate, whether voluntarily or involuntarily, then for a period of one (1) year commencing with the time when such employment shall cease-A. He will not solicit, either directly or indirectly, the grocery, meat and/or food supplies business of any customer of said Employer. * * * B. He will not, directly or indirectly, as employee, manager, proprietor, owner, co-partner, or as a stockholder or officer of a corporation, carry on or engage in, or be employed in or solicit any business for any branch of the grocery, meat and/or food supplies business within, a radius of two (2) miles of any store or place of business operated by said Employer in which said Employee has worked during the course of his employment by said Employer.’ The defendant performed his work pursuant to the terms of his contract faithfully, and his services were in every respect satisfactory to the plaintiff. He was discharged on February 21 or February 23, 1934, without just or adequate cause and in circumstances involving some humiliation to him. Since his discharge the defendant has received employment from his brother who has opened as store in Squantum about one hundred feet from the plaintiff's store. This employment the plaintiff seeks to enjoin by virtue of the provisions of the employment agreement. In the store opened by the defendant's brother are sold meats and some other products sold by the plaintiff's Squantum store, but it does not carry groceries. This store was opened on or about March 9, 1934, and the defendant worked there from the time that it was opened.

There was no agreement on the part of the plaintiff to employ the defendant for any fixed or definite period. Nothing was said as to how long the employee should work for the employer. The trial judge found that ‘ the terms of section 3, A and B of this contract which restricts his [defendant's] employment in the event that he ceases to be an employee, and the territory in which the restriction was contemplated, were reasonable conditions.’ The trial judge ruled that ‘ the defendant having been discharged without just or adequate cause, the plaintiff is not entitled to equitable relief.’

A covenant inserted in a contract for personal service restricting trade, or competition, or freedom of employment, is not invalid and may be enforced in equity provided it is necessary for the protection of the employer, is not injurious to the public interest, and is reasonably limited in time and space. What is reasonable depends upon the facts. Sherman v. Pfefferkorn, 241 Mass. 468, 135 N.E. 568; Becker College of Business Administration v. Gross, 281 Mass. 355, 183 N.E. 765. If the defendant had left the employ of the plaintiff voluntarily, or had been discharged for cause, there would be little question that the plaintiff would be entitled to relief. The contract was not void for lack of consideration. When accepted and acted on by the plaintiff, it implied according to its reasonable construction a promise on the part of the plaintiff to employ the defendant. It was not wanting in mutuality. The amount of compensation to be paid was fixed by separate agreement. Walker Coal & Ice Co. v. Love, 273 Mass. 564, 174 N.E. 199; Sherman v. Pfefferkorn, 241 Mass. 468, 135 N.E. 568; Edgecomb v. Edmonston, 257 Mass. 12, 153 N.E. 99; Walker Coal & Ice Co. v....