Haysler v. Butterfield

• Decision Date: 10 January 1949
• Citation: 218 S.W.2d 129,240 Mo.App. 733
• Parties: Arthur C. Haysler, d/b/a Index Employment Company, Appellant, v. S. B. Butterfield and Charles G. James, d/b/a Globe Employment Agency, Respondent
• Court: Kansas Court of Appeals

218 S.W.2d 129

240 Mo.App. 733

Arthur C. Haysler, d/b/a Index Employment Company, Appellant, v. S. B. Butterfield and Charles G. James, d/b/a Globe Employment Agency, Respondent

Court of Appeals of Missouri, Kansas City

January 10, 1949

Delivered

Appeal from Circuit Court of Jackson County; Hon. Paul A. Buzard Judge.

Reversed and remanded with directions.

Thomas J. Wheatley and J. R. Clagett for appellant.

(1) Injunction is the proper remedy to enforce restrictive provisions in an employment contract. Section 1683, 1939; Athletic Tea Co. v. Cole, (Mo. App.) 16 S.W. 2d 735; City Ice & Fuel Co. v. Snell, (Mo. App.) 57 S.W. 2d 440; City Ice & Fuel Co. v. McKee, (Mo. App.) 57 S.W. 2d 443; Dyar Sales & Machinery Co. v. Bleiler, 175 A. 27, 106 Vt. 425. (2) The same tests are used to determine validity of reasonable covenants in employment contracts not to compete after termination of employment as are used to determine validity of similar covenants in sale contracts. Dow v. Gotch, 113 Neb. 60, 201 N.W. 655; Eureka Laundry Co. v. Long, 146 Wis. 205, 35 L. R A. (N. S.) 119, 131 N.W. 412; Williston, Treatise on Contracts, Sec. 1643, Vol. 5, p. 4606; Restatement of Law on Agency, Sec. 396, comment (a); Restatement of Law of Contracts, Sec. 516; McCall Co. v. Wright, 198 N.Y 143, 31 L. R. A. (N. S.) 249, 91 N.E. 516; Fink & Sons v. Goldberg, 101 N. J. Equity 644, 139 A. 408; Deurling v. City Bank Co., 155 Md. 280, 141 A. 542; Printing Co. v. Sampson, L. R., 19 Eq. cases 462; Northcutt v. Highfill, 225 Ky. 456, 1 S.W. 2d 209. (3) Reasonable covenants not to compete contained in contracts of sale of a business are valid and will be enforced. Gordon v. Marshfield, 84 Mo.App. 367, l. c. 372; Scott v. Asbury, 195 S.W. 1131, 197 Mo.App. 659; Clabaugh v. Heibner, 236 S.W. 396; Mills v. Cleveland, 87 Kan. 549, 121 P. 58; Ryan v. Hamilton, 205 Ill. 191, 68 N.E. 781; Cole v. Edwards, 98 Iowa 477, 61 N.W. 940; Pickett v. Green, 120 Ind. 584, 22 N.E. 737. (4) It is immaterial whether the services performed by the former employee were unique or whether the employee could be easily replaced. Eureka Laundry Co. v. Long, supra; E. Jaccard Jewelry Co. v. O'Brien, 70 Mo.App. 432; Wark v. Ervin Press Corp., 48 F.2d 152 (C. C. A. 7th); 98 A. L. R. 967; Dyar Sales & Machinery Co. v. Bleiler, supra. (5) There was a close personal relationship established between defendants and plaintiff's customers which made it possible for them to control in whole or in part the business of such customers as a personal asset and their covenants not to compete with plaintiff for two years should be enforced. May v. Young, 2 A.2d 385, 125 Conn. 1; Wark v. Ervin Press Corp., supra; 9 A. L. R. 1468; 52 A. L. R. 1363; Garlichs Agency Co. v. Anderson, 226 S.W. 978 (Mo. App.); Athletic Tea Co. v. Cole, supra; City Ice & Fuel Co. v. Snell, supra; City Ice & Fuel Co. v. McKee, supra. (6) The restrictive covenant involved is reasonable as to time, area and scope. May v. Young, supra; Williston, Treatise on Contracts, Vol. 1, p. 485, Sec. 137 A; p. 506, Sec. 141; City Ice & Fuel Co. v. Snell, supra; Dyar Sales & Machinery Co. v. Bleiler, supra; Garlichs Agency Co. v. Anderson, supra; Walker Coal & Ice Co. v. Westerman, supra; Walker Coal & Ice Co. v. Love, 273 Mass. 564, 174 N.E. 199; City Ice & Fuel Co. v. McKee, supra; Elbe File & Binder Co. v. Fine, 137 Misc. 255, 242 N.Y.S. 632; Ideal Laundry Co. v. Gugliemone, 107 N.J.Eq. 108, 151 A. 617; Gilford Motor Co. v. Horne, Ch. (Eng.) 935 (C. A.); Moskin Bros. v. Swartzberg, 199 N.C. 539, 155 S.E. 154; Federal Sanitation Co. v. Frankel, 34 Ohio App. 331, 171 N.E. 339. (7) Grand Union Tea Co. v. Walker, (Ind.) 195 N.E. 227; 9 A. L. R. 1968; 20 A. L. R. 865; 52 A. L. R. 1366; 67 A. L. R. 1006; 98 A. L. R. 971.

Robert M. Murray for respondents.

(1) The contract upon which the petition was based was void because its provisions unreasonably restricted respondents in future employment and such restrictions were not reasonably necessary for the protection of appellant's business. E. Jaccard Jewelry Co. v. O'Brien, 70 Mo.App. 432; The Samuels Stores v. Aaron H. Abrams, (Conn.) 108 A. 541, 9 A. L. R. 1450, 1456, 1460, 1461; Wm. Rogers Mfg. Co. v. Rogers, 58 Conn. 356, 7 A. L. R. 779; Eureka Laundry Co. v. Long, 35 L. R. A. (N. S.) 119 and notes; Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6; Mallinckrodt Chemical Works v. Nemnich, 169 Mo. 389, 69 S.W. 355. (2) The contract upon which the petition was based was void as against public policy. Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6; 169 Mo. 389, 69 S.W. 355. (3) Appellant's contract will be construed strictly against him and the Court will not rewrite it for him so as to make it less restrictive. Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6; 169 Mo. 389, 69 S.W. 355. (4) The contracts of employment in question were void. E. Jaccard Jewelry Co. v. O'Brien, 70 Mo.App. 432; The Samuels Stores v. Aaron H. Abrams, (Conn.) 108 A. 541, 9 A. L. R. 1450; Wm. Rogers Mfg. Co. v. Rogers, 58 Conn. 356, 7 A. L. R. 779; Eureka Laundry Co. v. Long, 35 L. R. A. (N. S.) 119 and notes; Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6; Mallinckrodt Chemical Works v. Nemnich, 169 Mo. 389, 69 S.W. 355. (5) The evidence failed to show the restriction of respondents was reasonably necessary for the protection of appellant's business. E. Jaccard Jewelry Co. v. O'Brien, 70 Mo.App. 432; Mallinckrodt Chemical Co. v. Nemnich, 83 Mo.App. 6; 169 Mo. 389, 69 S.W. 355; The Samuels Stores v. Aaron H. Abrams, (Conn.) 108 A. 541, 9 A. L. R. 1450, 1456; Wm. Rogers Laundry Co. v. Long, 35 L. R. A. (N. S.) 119 and note. (6) The evidence failed to prove that the work being performed by respondents was of a type which was extraordinary, unique in character and required a peculiar skill or ability, to perform, which a substitute could not easily be secured for. E. Jaccard Jewelry Co. v. O'Brien, 70 Mo.App. 432; Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6; 169 Mo. 389, 69 S.W. 355; The Samuels Stores v. Abrams, (Conn.) 108 A. 541, 9 A. L. R. 1450, 1456. (7) Appellant's evidence failed to show that he had any special methods, or that respondents acquired special knowledge of his business methods and even if it proved such facts, it would not be sufficient to entitle the employer to an injunction. Simms v. Burnette, 55 Fla. 702, 16 A. L. R. 389. (8) Appellant, having alleged a conspiracy must prove it before he can show a violation of the contract. Dano v. Sharpe, 152 S.W. 693 (K. C. C. App.); Lampton Realty Co. v. Hoyt, 80 S.W. 2d, 249 (Mo. App.).

Sperry, C. Boyer, C., concurs.

OPINION

SPERRY

Plaintiff operates an employment agency. Defendants are former employees who, December 8, 1947, resigned their employment and themselves engaged in the employment agency business, contrary to the terms of a contract of employment previously entered into between them and plaintiff. This is a suit in equity wherein plaintiff seeks to enjoin defendants from engaging in any phase of the employment agency business. A preliminary writ was issued. After hearing plaintiff's evidence, judgment was rendered for defendants and the writ was dismissed. Plaintiff appeals.

The pertinent portion of the employment contracts upon which this suit is based, is as follows:

"* * * in the event this agreement of employment is terminated * * * Second Party will not engage, either as owner, part owner or as an employee, actively or silently, in any phase of the employment agency business in Kansas City, Missouri; Jackson County, Missouri; Clay County, Missouri; or Wyandotte County, Kansas, for a period of at least two years from the effective date of such termination of employment with First Party."

The evidence on behalf of plaintiff was to the effect that he operates an employment agency in Kansas City, Missouri; that the business consists of inducing people, who are desirous of obtaining employment to permit plaintiff to place them in suitable places of employment for a consideration; that in order to place such customers in employment it is necessary that plaintiff have and maintain friendly contacts with employers, that he operates extensively throughout the four counties named in the contract; that such business was established in 1941; that plaintiff employs "counsellors," to whom he refers job seekers and prospective employers; that defendants were employed as counsellors and, in that capacity, had access to plaintiff's files of employer-customers in this area, as well as to the files of applicants for various positions; that the matter of "placing" applicants in suitable employment was, under plaintiff's system of operation, almost entirely in the hands of the various counsellors employed by him; that such counsellors, including defendants, necessarily develop close contacts and friendly relations with plaintiff's employer-customers and, upon leaving plaintiff's employment defendants carried with them this knowledge; that, if said information, and relationship so established, were exploited by such counsellors for the benefit of a competitor it would work great injury to the plaintiff in his business.

The evidence was also to the effect that plaintiff, at the time of the trial, employed some 24 counsellors; that if a counsellor was adapted to the work, it took him but a few days in which to learn the mechanics of his employment and be able to do a good job in placement; that defendants had the proper attributes and personality for that kind of work and were good counsellors.

The court stated that he accepted as true the evidence of plaintiff but considered defendants' employment as not much different from that required in a store or a manufacturing establishment; and that, therefore, the contract is unreasonable and...