Eureka Laundry Co. v. Long

• Decision Date: 02 May 1911
• Parties: EUREKA LAUNDRY CO. v. LONG.
• Court: Wisconsin Supreme Court

146 Wis. 205

131 N.W. 412

EUREKA LAUNDRY CO.

v.LONG.

Supreme Court of Wisconsin.

May 2, 1911.

Appeal from Circuit Court, Milwaukee County; Warren D. Tarrant, Judge.

Suit by the Eureka Laundry Company against Fred J. Long. From an order dissolving a temporary injunction, plaintiff appeals. Reversed.

Suit in equity. On the 17th of April, 1909, the plaintiff and defendant entered into a contract for an indefinite period, whereby the defendant for a consideration therein named agreed to drive a laundry wagon for the plaintiff on a specified route in the city of Milwaukee. The portion of the contract material to this case is as follows: “The said party of the second part also agrees that he will not at any time while he is in the employ of the said party of the first part, or within two years after leaving its service, for himself, or any other person, persons, or company, call for and deliver laundried and unlaundried goods to any person or persons who shall have been customers of said party of the first part, and supplied by said party of the second part during any time he may have been employed under this contract, nor will he in any way, directly or indirectly, solicit, divert, take away, or attempt to solicit, divert, or take away, any of the custom, business, or patronage of such customers within such two years, and said party of the second part further agrees that he will not at any time while he is in the employ of the said party of the first part, or within two years after leaving its service, for himself or any other person, persons, or company, engage in the laundry business, or call for and deliver any laundried or unlaundried goods, either directly or indirectly, in that portion of the city of Milwaukee, Wisconsin, known as Route B, between Lake Michigan, East and North Water streets, Wisconsin street and Keefe avenue (said portion of the city containing the laundry route or territory especially intrusted by said party of the first part to party of the second part).” On September 10, 1910, defendant voluntarily left the employ of the plaintiff, and this suit is brought to restrain him from violating the portions of the contract set out above. A court commissioner issued an injunction restraining the defendant until the further order of the court from “either for himself, or any other person, persons, or company, calling for or delivering laundried and unlaundried goods to any person or persons who shall have been customers of the plaintiff and as such supplied by the defendant during any time he was in the plaintiff's employment and from in any way, directly or indirectly, soliciting, diverting, taking away from, or attempting to solicit, divert, or take away from any of the customs, business, or patronage of the plaintiff's customers and from, for himself or any other person, persons, or company, engaging in the laundry business and calling for or delivering laundried or unlaundried goods, either directly or indirectly, in that portion of the city of Milwaukee situated and bounded by Lake Michigan on the east, Wisconsin street on the south, East and North Water streets on the west, and Keefe avenue on the north.” The trial court dissolved the injunction, and the plaintiff appealed.Olwell & Drought (Rossiter Lines, of counsel), for appellant.

John S. Kaney and Churchill, Bennett & Churchill, for respondent.

VINJE, J. (after stating the facts as above).

[1] The first question raised by the appeal is the validity of the portion of the contract set out in the foregoing statement of facts wherein the defendant agrees during the term of his employment and for two years thereafter not to solicit laundry trade from any customers of the plaintiff who have been supplied by him during his employment, and that he will not during such employment and for two years thereafter, either directly or indirectly, engage in the laundry business in that part of Milwaukee known as “Route B.” Were this a case where the defendant had sold plaintiff the laundry business and had made the covenants above referred to, no question as to the validity of the contract would arise under the decisions of our own state. Cottington v. Swan, 128 Wis. 321, 107 N. W. 336;My Laundry Co. v. Schmeling, 129 Wis. 597, and cases cited on page 606, 109 N. W. 540. It meets all the requirements of the rule laid down in Tecktonius v. Scott, 110 Wis. 441, 86 N. W. 672, to the effect that such contracts, in order to be valid, must be limited as to time, space, and extent of trade, to what is reasonable under the circumstances of the case. And it is much more limited as to time and space than the contract held valid in Cottington v. Swan, 128 Wis. 321, 107 N. W. 336.

The question arises, Does it make any substantial difference whether the thing of value bargained for is contained in a contract of sale or in a contract of hiring? If it is lawful and proper to protect a business just about to be acquired from certain acts by the seller who is familiar with such business, why is it not equally lawful and proper to protect an established business from such acts by one who has become familiar therewith? We perceive no difference in principle. The purchaser says to the seller: “You are familiar with this business. You know your customers. Your personal acquaintance with them is such that you could divert their trade from me if you saw fit. Now I will purchase your business upon the express condition that you will agree for a limited length of time not to engage in a like business in this locality. At the expiration of that time I shall know my business and my customers well enough to be able to protect myself.” So the owner of an established business says to a prospective employé: “In the employment you will become familiar with the customers of my business in a way that I cannot. You will meet them frequently, while I see them rarely, if ever. Now, I will hire you upon the express condition that you will agree for a limited length of time not to solicit trade from such of my customers as you may have supplied while in my employ, and will not engage in my business within a limited time in the territory you have occupied. At the end of that time my new employés will be sufficiently well acquainted with my customers to protect my business.” Why is not one contract as valid as the other? Both are based upon valuable considerations. If it be said that the latter contract tends unreasonably to hamper employés in their quest for employment, the answer is: Whatever is reasonably necessary for the protection of a legitimate business promotes the best interests of the employés of that business. No doubt experience has shown that owners of a business like that of plaintiff need such protection in a large city, where the customers as a rule come in contact only with the employé, and that his personality and his acquaintance with them has much to do with the...