Electrolux Corp. v. Lawson, 81CA0329
| Decision Date | 16 September 1982 |
| Docket Number | No. 81CA0329,81CA0329 |
| Parties | 1 IER Cases 158 ELECTROLUX CORPORATION, a Delaware Corporation, Plaintiff-Appellant, v. Allen R. LAWSON, K & L Distributing Corporation, Ray Rozycke, and Health-Mor, Inc., Defendants-Appellees. . II |
| Court | Colorado Court of Appeals |
Sherman & Howard, Edward W. Nottingham, Denver, for plaintiff-appellant.
Mosley, Wells & Spence, P.C., Philip E. Johnson, Morris B. Hoffman, Denver, McBride & Baker, G. Gale Roberson, Jr., Chicago, Ill., for defendants-appellees Ray Rozycke and Health-Mor, Inc.
Steinmark & Lawrence, Kim R. Lawrence, Greeley, for defendants-appellees Allen R. Lawson and K & L Distributing Corp.
In this action premised upon the tortious inducement of breach of contract, Electrolux Corporation appeals the summary judgment entered for the defendants, Allen R. Lawson, K & L Distributing Corp., Ray Rozycke, and Health-Mor, Inc. We affirm.
Lawson was Electrolux' branch manager. Prior to leaving Electrolux, he expressed his intention to open his own distributorship, and arranged a social gathering at his home with a number of his co-workers. At that gathering, Lawson announced a deadline by which any of those present would be required to elect to join him in his new enterprise, if they chose to do so.
Lawson discussed selling the products in his new business with defendant Health-Mor and arranged for its representative, Rozycke, to assist with the recruitment of a sales staff. A demonstration meeting was scheduled to recruit prospective sales personnel. Seven of Lawson's fellow employees from Electrolux attended the meeting, but Rozycke declined to discuss employment unless and until those employees tendered their resignations to Electrolux. They did so, and the demonstration meeting proceeded as planned. Six of those individuals later joined Lawson's firm; one withdrew his resignation and remained with Electrolux.
The trial court concluded: Lawson did not engage in any unlawful conduct so as to breach his fiduciary duty with Electrolux; the defendants did not tortiously cause a breach of the employment contracts between Electrolux and its employees because those contracts were terminable at will and the employees' resignations were not in breach of the contracts; Lawson did not convert property of Electrolux since the contract between Electrolux and Lawson required Electrolux to make demand upon Lawson for the return of any property which it admittedly had failed to do; and the defendants did not conspire to destroy Electrolux' business because nothing they did was unlawful.
Electrolux first contends that Lawson breached his fiduciary duty to it, and that all of the defendants interfered with the contractual rights between Electrolux and its employees. We do not agree.
Although an agent/employee is subject to a duty not to compete with his principal/employer, he will not be liable for a breach of that duty unless he causes his fellow employees to breach a contract. Restatement (Second) of Agency § 393 comment e (1957). And, merely preparing to compete with his employer does not violate this duty. United Aircraft Corp. v. Boreen, 413 F.2d 694 (3d Cir.1969). Here, the employment contracts with Electrolux were terminable at will. Thus, the employee resignations did not constitute a breach of their employment contracts. See Lampe v. Presbyterian Medical Center, 41 Colo.App. 465, 590 P.2d 513 (1978); Justice v. Stanley Aviation Corp., 35 Colo.App. 1, 530 P.2d 984 (1974). Lawson, not having induced any breach, did not act unlawfully.
Furthermore, one who causes a third party to terminate a contract terminable at will does not improperly interfere with that relationship unless wrongful means, such as physical violence, fraud, civil suit, or criminal prosecution, are used. Restatement (Second) of Torts § 768 (1965). There is no allegation of any wrongful means here. As noted in W. Prosser, Torts § 129 at 945-56 (4th ed. 1971):
"[T]he considerable weight of authority holds that there is a privilege of competition which extends to inducing the termination of agreements terminable at will, whether they concern equipment or other relations."
See also Annot., 24 A.L.R.3d 821 (1969); Memorial Gardens v. Olympian Sales, --- P.2d ---- (Colo.App. No. 80CA0235, announced September 9, 1982).
...
To continue reading
Request your trial
-
Jet Courier Service, Inc. v. Mulei
...that there was no breach of Mulei's duty of loyalty, the court of appeals relied on its previous decision in Electrolux Corp. v. Lawson, 654 P.2d 340 (Colo.App.1982). The court of appeals cited Electrolux for the proposition that an employee will not be liable for a breach of his duty of lo......
-
Trimble v. City and County of Denver
...City was that of employee to employer or agent to principal. See Shriver v. Carter, 651 P.2d 436 (Colo.App.1982); Electrolux Corp. v. Lawson, 654 P.2d 340 (Colo.App.1982). An employer may sue an employee for tortious interference with contractual relations between the employer and other per......
-
Loral Corp. v. Moyes
...1180-1181, and cases there cited; Maryland Metals, Inc. v. Metzner (1978) 282 Md. 31, 382 A.2d 564, 568-570; Electrolux Corp. v. Lawson (Colo.App.1982) 654 P.2d 340, 341-342; "Liability for Inducing Employee Not Engaged for Definite Term To Move To Competitor," 24 A.L.R.3d 821.) As stated i......
-
Board of Assessment Appeals v. Sampson, Case No. 03SC451 (CO 1/31/2005)
... ... See Colo. Const. art. X, § 3; cf. Resolution Trust Corp. v. Bd. of County Comm'rs , 860 P.2d 1383, 1385-86 (Colo. App. 1993) ... ...
-
Enjoining Former Employees from Taking Software
...v. Grand Enterprises, Inc., 782 F.Supp. 1476 (D.Colo. 1991). 14. Trimble v. Denver, 697 P.2d 716 (Colo. 1985); Electrolux Corp. v. Lawson, 654 P.2d 340 (Colo.App. 1982). 15. Jet Courier, supra, note 14. 16. CJI 3d 19:1 and 19:2. This update was written by Daniel Friesen, Denver, member of D......
-
Recent Employment Law Developments in Colorado
...Williston on Contracts § 4:5 at 278-80 (4th ed. 1990). 4. See Continental Air Lines, supra, note 1; Electrolux Corporation v. Lawson, 654 P.2d 340 (Colo.App. (employee has right to resign at any time). 5. Olsen v. Bondurant & Co., 759 P.2d 861 (Colo.App. 1988). 6. Pickell v. Arizona Compone......