Gill v. Guy Chipman Co.

• Decision Date: 07 November 1984
• Docket Number: No. 04-83-00027-CV,04-83-00027-CV
• Citation: 681 S.W.2d 264
• Parties: Mary C. GILL, Appellant, v. GUY CHIPMAN COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 264

681 S.W.2d 264

Mary C. GILL, Appellant, v. GUY CHIPMAN COMPANY, Appellee.

No. 04-83-00027-CV.

Court of Appeals of Texas,

San Antonio.

Nov. 7, 1984.

Rehearing Denied Dec. 12, 1984.

Henry W. Christopher, Jr., Johnson & Christopher, San Antonio, for appellant.

Calhoun Bobbitt, San Antonio, for appellee.

Before CADENA, C.J., and CANTU and REEVES, JJ.

OPINION

REEVES, Justice.

This is a suit to enforce a noncompetition clause in an employment contract. Guy Chipman Company, employer, brought suit against Mary C. Gill, employee, alleging a breach of the noncompetition clause. ¹ Trial was to the court which rendered judgment for the employer for the sum of $8,000.00 plus attorneys' fees. Findings of fact and conclusions of law were entered by the trial court.

Appellant argues that the trial court erred in entering its conclusions of law numbers one through four,

That paragraph XV ² of the employment agreement of September 20, 1979, is reasonably restricted as to time and area and is reasonably necessary to the protection of the business and goodwill of Plaintiff, is not unconscionable, and is, therefore, not void as an unreasonable restraint of trade, or otherwise, but is valid and enforceable.

That Defendant has breached paragraph XV of said employment contract by engaging in competition with Plaintiff in its existing market area of Kendall County and Northwest Bexar County, Texas, without payment to Plaintiff of Eight Thousand Dollars ($8,000.00), as specified in said agreement.

That Defendant is obligated to pay to Plaintiff the sum of Eight Thousand Dollars ($8,000.00), as specified in the employment agreement, as a consequence of Defendant's engaging in competition with Plaintiff in its existing marketing area.

That Plaintiff is entitled to recover of and from Defendant Plaintiff's reasonable attorneys' fees in connection with the trial and appeal of this suit,

because (i) there was no evidence that the defendant engaged in any acts of competition with plaintiff that could be classified as "unfair competition" and could, therefore be lawfully restrained, ³ and (ii) there was no consideration for the noncompetition agreement.

In determining whether there was any evidence of probative force to sustain the trial court's findings, this court is required to consider only that evidence favorable to the finding and the judgment rendered thereon and to disregard all evidence to the contrary. The judgment of a trial court will not be set aside if there is any evidence of a probative nature to support it, and this court cannot substitute its findings of fact for those of the trial court if there is any evidence in the record to sustain the trial court's findings. Ray v. Farmers' State Bank of Hart, 576 S.W.2d 607, 609 (Tex.1979).

The Guy Chipman Company (hereinafter referred to as "Chipman"), is a real estate brokerage firm involved in residential, farm and ranch and commercial real estate. Its marketing area includes the north side of Bexar County and Kendall County. The company has several branch offices within the marketing area, each staffed by a manager whose functions include recruiting candidates for the sales force, selection of sales agents, management, training, motivation and goal-setting of the sales force.

Appellant applied for a sales agent position with Chipman's branch office in Boerne, in April, 1979. She was not licensed at the time but attended school and was trained by Chipman. Appellant worked as a sales agent until September, 1979, when she was selected as the branch office manager. The general manager for Chipman explained the manager's employment contract with the noncompetition clause to appellant and she voluntarily signed the contract. The covenant not to compete restricted competition within the marketing area of Chipman for fifteen months or provided for a payment of $8,000.00.

An article was run in the Boerne newspaper announcing her appointment as manager and her name and picture were subsequently printed in weekly advertisements.

To train her for her position of manager, Chipman paid for an extensive management training course held by a consulting firm in Detroit, Michigan. Chipman is the exclusive real estate recipient, in this particular marketing area, of this program. Appellant also received inside training with the training director for Chipman whose sole job is one-on-one training of the managers. On-going training was received in weekly managers' meetings, conventions and seminars held by the Texas Association of Realtors, and a series of taped lectures. Chipman presented evidence at trial that the out-of-office training for appellant cost Chipman $5,271.27.

As a manager, appellant was supplied with guidebooks and manuals for the training of her sales agents. This information was developed by and for the use of Chipman. Appellant received a manual of forms, some of which were developed by attorneys for Chipman and are unique to the company. As manager, appellant reviewed all paperwork of her sales agents and was given computer print-outs of the names of all customers and prospects generated by her branch office.

Appellant was exposed to the financial operations of Chipman, including arrangements for commissions among sales agents, salaries of all personnel, and profit and loss statements of the company.

On November 18, 1981, appellant informed the company that she was resigning to take a job with Topatio Springs Development as an on-site sales agent. Because Chipman did not handle any of the real estate in this development, it did not attempt to enforce the covenant.

Evidence was presented that appellant, while still with Chipman, contacted Gene Canavan about a local real estate company in Chipman's marketing area which she had learned was for sale. Appellant arranged a meeting between Canavan and the owner of this real estate company. An offer was made and Canavan took over this company in November, 1981. Appellant was offered the job as manager for Canavan & Associates which she accepted January, 1982.

The manager for Chipman wrote a letter to appellant informing her that he felt she was now in violation of the covenant and requested that they meet to discuss the problem. Appellant did not respond.

Canavan was aware of the covenant in appellant's contract with Chipman, but appellant had told him there would be no problem. Canavan testified that he hired appellant because he felt that the training she had received from Chipman was strong and she would therefore be an asset to his company. Canavan testified appellant made copies of all Chipman's forms and had "brought her whole file" to the new agency. Canavan and appellant discussed hiring one of Chipman's secretaries.

Chipman later learned that appellant had left Canavan & Associates and had started a real estate company with her husband, Jack Gill. Jack Gill had no previous real estate experience. The office of Jack Gill Company (hereinafter referred to as "Gill"), was opened March 28, 1982, with appellant and her husband each owning one-half of the stock. The office was located 500 feet from and on the same side of the street as Chipman. Gill deals in the same type of real estate as Chipman and is in direct competition with it.

The attorney for Chipman was contacted and wrote appellant at least two letters expressing the belief that she was in violation of the covenant. Appellant's attorney responded with a letter stating that his client had no intention of complying with the covenant based on his opinion that such covenant was an illegal restraint of trade. Chipman then filed this lawsuit.

An agreement on the part of an employee not to compete with his employer after termination of the employment is in restraint of trade and will not be enforced in accordance with its terms unless the same are reasonable in view of the circumstances of the particular case. Where the public interest is not directly involved, the test for determining the validity of the covenant as written is whether it imposes upon the employee any greater restraint than is reasonably necessary to protect the business and good will of the employer. Weatherford Oil Tool Co. v. Campbell, 161 Tex. 310, 340 S.W.2d 950, 951 (1960).

This court, in Hospital Consultants, Inc. v. Potyka, 531 S.W.2d 657 (Tex.Civ.App.--San Antonio 1975, writ ref'd n.r.e.), had occasion to discuss some important purposes sought to be achieved by an employee restraint. These include the interest in retaining customers whenever the employee's relationship with customers is such that there is a substantial risk that the employee may be able to divert all or part of the employer's business: the important considerations being the frequency of the employee's contacts with customers and whether they are the employer's only contacts or relationships with such customers; the locale of the contact; and the nature of the functions...