Kloville, Inc. v. Kinsler
| Decision Date | 07 September 1977 |
| Docket Number | No. 32515,32515 |
| Citation | 239 Ga. 569,238 S.E.2d 344 |
| Parties | , 1977-2 Trade Cases P 61,704 KLOVILLE, INC., et al. v. Jack H. KINSLER. |
| Court | Georgia Supreme Court |
Land & Cavalli, Fred L. Cavalli, Atlanta, for appellants.
Westmoreland, Hall, McGee & Warner, P. Joseph McGee, Atlanta, for appellee.
An employer, Kloville, Inc., engaged as a jewelry manufacturer's representative, sought injunctive relief and damages against Kinsler, a former employee, for breach of an employment and stock option contract. The employer alleged breach of section 12 of this multi-subject contract which section contains covenants against competition, customer solicitation and supplier representation, in a fourteen state area. The trial court found the restrictive covenants overbroad (and denied injunctive relief) because they included the state of Missouri, which is not a state where the employer does business.
On page one the contract, in a "whereas" clause, states that the company does business in "Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Tennessee, Kentucky, West Virginia, Louisiana, Mississippi, Arkansas, Delaware, Maryland and the District of Columbia." Section 12A of the contract purports to prohibit competitive activities of the employee in "Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Tennessee, Kentucky, West Virginia, Louisiana, Missouri and Arkansas, Delaware, Maryland and Washington, D. C." By affidavit, the employer explained that the substitution of Missouri for Mississippi was a clerical error resulting from the use of the abbreviation "Miss." in the draft contract. The employer avers that the parties intended Mississippi as both parties were aware that the company does no business in Missouri but does transact business in Mississippi. The employee asserts that the company transacts no business in Missouri but he does not contest the averments as to clerical mistake.
The employer cites Hood v. Legg, 160 Ga. 620, 628, 128 S.E. 891 (1925), and similar cases and urges that because the employee had the right under the contract to acquire the outstanding stock of the company, the restrictive covenants in this case were made in connection with a contract for the sale of a business and are entitled to less stringent treatment than restrictive covenants in the usual employment contract. Restrictive covenants entitled to such treatment are those restricting the after-sale competitive activity of the seller, not the before-sale activity of the purchaser.
The employer argues that even if the covenant not to compete is unenforceable because of the inclusion of Missouri, the covenant not to solicit customers of the employer is severable and is enforceable as to those customers in the described territory, wherever located. While it is true that covenants against disclosure of confidential information are severable from covenants against competition, Howard Schultz & Assoc. of Southeast, Inc. v. Broniec, 239 Ga. 181(4), 236 S.E.2d 265 (1977), and assuming that covenants restricting customer solicitation are severable from covenants not to compete, the former covenants generally have been...
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Weaver v. Ritchie
...more liberally than such covenants arising out of an employer-employee relationship" (citations omitted)); Kloville, Inc. v. Kinsler, 239 Ga. 569, 238 S.E.2d 344 (1977) (stating covenants ancillary to sales of businesses are treated less stringently than covenants ancillary to employment co......
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...part" of the contract that its invalidity can be viewed as destroying the remainder of the agreement. See Kloville, Inc. v. Kinsler, 239 Ga. 569, 238 S.E.2d 344 (1977); Broxton v. Nelson, supra. The trial court did not err in holding the covenant not to compete severable from the other prov......
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...Elder, 240 Ga. 592, 242 S.E.2d 97 (1978); Howard Schultz & Assoc. v. Broniec, 239 Ga. 181, 236 S.E.2d 265 (1977); Kloville, Inc. v. Kinsler, 239 Ga. 569, 238 S.E.2d 344 (1977); Fuller v. Kolb, 238 Ga. 602, 234 S.E.2d 517 (1977); McNease v. Nat'l Motor Club of America, 238 Ga. 53, 231 S.E.2d......
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Restrictions on Post-employment Competition by an Executive Under Georgia Law - Steven E. Harbour
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