Helms Boys, Inc. v. Brady, 15328

• Citation: 171 W.Va. 66,297 S.E.2d 840
• Decision Date: 18 November 1982
• Docket Number: No. 15328,15328
• Court: Supreme Court of West Virginia
• Parties: HELMS BOYS, INC. v. Larry J. BRADY.

Page 840

297 S.E.2d 840

171 W.Va. 66

HELMS BOYS, INC. v. Larry J. BRADY.

No. 15328.

Supreme Court of Appeals of West Virginia.

Nov. 18, 1982.

Syllabus by the Court

When the skills and information acquired by a former employee are of a general managerial nature, such as supervisory, merchandising, purchasing and advertising skills and information, a restrictive covenant in an employment contract will not be enforced because such skills and information are not protectible employer interests.

David M. Katz, Katz, Kantor, Katz, Perkins & Cameron, Bluefield, for appellee.

John R. Frazier, Frazier & Schumacher, Princeton, for appellant.

McHUGH, Justice:

This is an appeal from the final order of the Circuit Court of Mercer County enjoining the appellant, Larry J. Brady, (hereinafter "Brady"), from engaging in the retail furniture and appliance business for five years and ordering him to divest his stock interest in an existing business. The circuit court issued the injunction upon the petition of the appellee, Helms Boys, Inc., (hereinafter "Helms"), which asserted in the proceeding below that Brady had violated a covenant not to compete contained in his employment contract with Helms. Brady contends that the restrictive covenant is unreasonable and unsupported by consideration rendering it unenforceable. This Court has before it the petition for appeal, all matters of record and the briefs and argument of counsel.

Helms is a West Virginia corporation selling home furnishings and appliances. Its principal places of business are Bluefield, West Virginia, and Richlands, Virginia. Brady has been a furniture and appliance salesman for most of his adult life. He was originally employed by Helms in December, 1970, as a truck driver but in October of 1971, he was promoted to the position of salesman.

On October 8, 1974, Brady entered into a written employment agreement with Helms. This agreement contained a restrictive covenant providing that:

[I]n the event Employee either ceases his employment voluntarily or is discharged by the Employer with or without cause, Employee agrees that he (she) will not thereafter become employed, either directly or indirectly, by any other retail or wholesale furniture or appliance business, either as an Employee, stockholder, manager, owner or any other capacity, for a period of 5 years from the date Employee ceases said employment, and within a radius of 100 miles of Bluefield (Princeton).

As part of the consideration for this contract, Helms stated that it would train Brady and familiarize him with the operation of the business.

In 1975, Helms named Brady manager of its newly-opened satellite store in Richlands, Virginia. Brady retained this position until October 6, 1980, when he resigned to purchase a donut shop. In 1981, Brady began working for Bluewell Home Furnishings, Inc., a retail furniture store, in Bluewell, West Virginia, a town approximately five miles from Bluefield, West Virginia. Shortly thereafter he acquired 25% of the stock in that business.

Helms then instituted this action to enforce the restrictive covenant contained in Brady's contract of employment. The circuit court found the employment agreement to be valid, binding and supported by adequate consideration. It determined that Brady's relationship with Bluewell violated his agreement with Helms and, accordingly, granted the injunction prayed for in the complaint.

On appeal, Brady contends that the covenant not to compete is unreasonable in that the skills he acquired while employed by Helms were not protectible business interests. He further asserts that the covenant is unreasonable because it "is oppressive in curtailing his legitimate efforts to earn a livelihood" and contrary to public policy. Brady also contends that the restrictive covenant in his employment contract with Helms is not supported by adequate consideration. We agree that the restrictive covenant is unreasonable inasmuch as Helms has not demonstrated that the skills acquired by Brady were protectible business interests. ^*

As this Court stated in the syllabus in O. Hommel Co., v. Fink, 115 W.Va. 686, 177 S.E. 619 (1934):

A contractual covenant between employer and employee, restricting the employee from engaging in business similar to that of the employer within a designated time and territory after the employment should cease, will be enforced if the restriction is reasonably necessary for the protection of the employer and does not impose undue hardship on the employee.

This Court has not had occasion to define a protectible employer interest but has enforced restrictive covenants when the interest is of a unique or confidential nature, such as a trade secret or customer list.

In Fink, supra, two salesmen with access to their employer's data, formula and processes left their employment and established a business identical to that of their former employer. The employer was...