New England Tree Expert Co. v. Russell
| Decision Date | 09 September 1940 |
| Citation | 28 N.E.2d 997,306 Mass. 504 |
| Parties | NEW ENGLAND TREE EXPERT CO. INC. v. CHARLES M. RUSSELL. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
March 8, 1940.
Present: FIELD, C.
J., DONAHUE LUMMUS, QUA, & DOLAN, JJ.
Contract, Of employment, Validity. Equity Jurisdiction, To enforce employee's covenant not to compete.
A contract by an employee not to compete with his employer's business in a specified district after the termination of his employment is divisible and will be enforced as to any part of that district that is reasonably necessary for the protection of the good will of business of the employer there established.
Findings respecting a "general arboricultural" business warranted a conclusion that it was an established business with a good will capable of protection in a suit by the proprietor to enforce an agreement by a former employee not to engage in a similar business.
A decree in a suit by the proprietor of a "general arboricultural" business to enforce an agreement by a former employee of the plaintiff not to engage in a similar business in a specified area properly restrained him from doing such business in an area, smaller than that described in the agreement but found to have been "covered intensely" by the plaintiff although the area described in the decree was larger than the area in which the defendant had worked for the plaintiff.
BILL IN EQUITY filed in the Superior Court on March 24, 1939. The decrees were entered by order of Good, J.
E. D. Sharkey, for the defendant.
F. B. Frederick, (H.
C. Perkins with him,) for the plaintiff.
This suit in equity comes before us on the appeals of the defendant from an interlocutory decree overruling his exceptions to the report of a master and confirming the report, and from the final decree enjoining the defendant within a certain territory for a certain period of time from engaging in the same or any similar line of business as that carried on by the plaintiff.
The findings of the master are substantially these: The plaintiff corporation which was organized about twelve years ago under the laws of the State of Rhode Island, maintains its principal place of business there, and has been duly admitted to transact business in this Commonwealth. Its business consists of "`general arboricultural work' including the trimming, spraying, feeding and moving of trees, tree surgery, line clearance operations and general landscaping work." Its business has been growing rapidly, and the territory covered by its solicitors and salesmen has been expanding from time to time, so that it now encompasses Connecticut as far west as the Connecticut River, including Hartford and its vicinity, and this Commonwealth as far west as Springfield, with some solicitation beyond that area in Pittsfield and its vicinity. It has done very little business in Vermont, New Hampshire and
Maine. Such business as it has done in these States has consisted almost entirely of public work.
Public work consists of the clearing of communication and power lines and wires, and of branches of trees for public utility companies and governmental agencies. The greater number of the plaintiff's employees are salesmen who solicit and sell its services from door to door and field men who do the actual work on the trees. During most of its business existence the plaintiff has had a number of competitors. The activities of six of these competitors extend throughout New England. They are particularly active in Rhode Island. The plaintiff has between fifteen and twenty competitors in the "Boston Metropolitan Area," five or six competitors are active in and about Worcester, the same number in and about Springfield, ten in Connecticut, three or four in Vermont and four or five in New Hampshire. In Maine there are a great many small local companies which offer the same kind of service as the plaintiff. This condition "prevails at present.
" The plaintiff has branch offices in Boston, Worcester, and Springfield, Massachusetts; in Hartford, Connecticut; Portland, Maine; and Rutland, Vermont. It owns twenty-two trucks, twelve of which are operated from Boston and eight from Pawtucket. The number of its employees fluctuates with the seasons. Besides salesmen and office clerks, it employs from fifty to seventy-five field men from December to April of each year, and from one hundred to one hundred fifty field men throughout the summer months. In the year 1936 it did a gross business of about $150,000, in the year 1937 a gross business of about $200,000, and in the year 1938 (the hurricane occurred in that year) a gross business of $300,000.
The defendant was employed by the plaintiff in May, 1937. He was instructed in the various details of its business by the plaintiff. He became a successful salesman and later was a supervisor of salesmen and received several increases in pay.
On July 31, 1937 "Fully understanding its terms," the defendant signed a contract which each member of the sales force was requested to execute. Any one who refused to do so "could not expect to remain with the plaintiff company." Clause nine of this contract provides that "If the employment of the . . . [defendant] shall be terminated for any cause whatsoever, he will not, for a period of three years from the date of such termination, engage in any of the New England States in the same or any similar line of business as that carried on by . . . [the plaintiff], either by himself or as agent or as servant of any individual, firm or corporation engaged in such line or similar line of business." After July, 1937, the defendant's sales fell off and his salary was reduced. From early in July, 1938, he worked "without a crew . . . canvassing for business as he had done before he had become a supervisor." On October 8, 1938, being dissatisfied, he ceased working for the plaintiff and on October 12, 1938, gave notice to the plaintiff that he was quitting. He then purchased a motor truck and has been actively engaged ever since in the tree business under the name of "The County Tree Surgery Service," operating from his home in Randolph, in this Commonwealth. He employs two men and hires a tree climber when he needs one. He is in direct competition with the plaintiff in all phases of private tree work as distinguished from public work, except tree moving. He is not equipped to do so called "public work," which consists of line clearance operations for public utilities companies. This constitutes about twenty-five per cent of the plaintiff's volume of business. While employed by the plaintiff the defendant's activities as a salesman and supervisor were largely within the territory south of United States Route 9 from Boston to Framingham and east of an irregular line from Framingham to Mattapoisett on Buzzard's Bay. They also included Attleboro, but excluded Taunton. It is mainly in these sections that the defendant has derived the greater part of sales on his own account. He actively solicits customers in that area and is anxious to obtain as much business throughout New England as he can. He is likely to increase his business as time goes on. However, as at present equipped, he cannot competently handle any...
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