Paramount Termite Control Co., Inc. v. Rector
| Citation | 380 S.E.2d 922,238 Va. 171 |
| Decision Date | 09 June 1989 |
| Docket Number | No. 870723,870723 |
| Parties | , 58 USLW 2042, 4 IER Cases 791 PARAMOUNT TERMITE CONTROL CO., INC. v. Thomas A. RECTOR, et al. Record |
| Court | Supreme Court of Virginia |
Charles W. Sickels (Hall, Markle & Sickels, Fairfax, on briefs), for appellant.
John F. Cahill, Falls Church, (R. Mark Dare, Robert J. Cunningham, Jr., Hazel, Thomas, Fiske, Beckhorn & Hanes, P.C., Alexandria, on brief), for appellees.
Present: CARRICO, C.J., COMPTON, STEPHENSON, RUSSELL, THOMAS and WHITING, JJ., and POFF, Senior Justice.
In this appeal, we determine the validity of non-competition agreements in certain employment contracts.
For a number of years before 1982, Paramount Termite Control Co., Inc. (Paramount) was engaged in the pest control business in the Northern Virginia, Washington, D.C., and Maryland areas. In 1982, as a condition of their continued at-will employment, Paramount's employees Thomas A. Rector, Vernon L. Miller, Douglas N. Davis, Robert W. Lansing, and Ralph S. Moss signed non-competition agreements with Paramount.
The agreements are identical in pertinent part and provide that:
3. The Employee will not engage ... in the carrying on or conducting the business of pest control, fumigating, and termite control ... in any county or counties in the state in which Employee works in which the Employee was assigned during the two (2) years next preceding the termination of the Employment Agreement and for a period of two (2) years from and after the date upon which he shall cease for any reason whatsoever to be an employee of PARAMOUNT.
4. The Employee will not ... solicit business from any customer of PARAMOUNT where the purpose thereof is to provide, or offering to provide, the services of pest control ... in any county or counties in the state in which Employee works, in which the Employee was assigned at any time during the two (2) years next preceding the termination of the Employment Agreement and for a period of two (2) years from and after the date upon which he shall cease for any reason whatsoever to be an employee of PARAMOUNT. Further, the Employee will not ... solicit business from any customer of PARAMOUNT where the purpose thereof is to provide, or offering to provide, the services of pest control ... with which customer the Employee established contact while in the employ of PARAMOUNT at any time during the two (2) years next preceding the termination of the Employment Agreement and for a period of two (2) years from and after the date upon which he shall cease for any reason whatsoever to be an Employee of PARAMOUNT.
During the latter part of 1986 and early part of 1987, on dates not shown in the record, the five employees resigned their positions with Paramount and began working for Triple-S Termite and Pest Control, Inc. (Triple-S), one of Paramount's competitors in the Northern Virginia area. On February 9, 1987, Paramount filed this suit in equity against Triple-S and the former employees seeking an injunction against them, as well as damages for their breach of the non-competition agreements.
On April 15, 1987, the trial court denied a preliminary injunction to Paramount upon the ground that the restrictive covenants were "not reasonable, under the circumstances presented in the evidence and therefore [are] an unreasonable restraint of trade." We granted Paramount this appeal against the former employees. 1
We apply the following criteria to determine the validity of such non-competition agreements:
(1) Is the restraint, from the standpoint of the employer, reasonable in the sense that it is no greater than is necessary to protect the employer in some legitimate business interest?
(2) From the standpoint of the employee, is the restraint reasonable in the sense that it is not unduly harsh and oppressive in curtailing his legitimate efforts to earn a livelihood?
(3) Is the restraint reasonable from the standpoint of a sound public policy?
Non-competition covenants which pass these tests in the light of the facts of each case will be enforced in equity.
Roanoke Eng. Sales v. Rosenbaum, 223 Va. 548, 552, 290 S.E.2d 882, 884 (1982) (citations omitted).
Although the parties agree as to the applicability of the foregoing principles, they disagree in their construction of the covenants in question. The former employees argue that the covenants extend throughout any state in which the former employee worked for Paramount. On the other hand, Paramount says they extend only to those counties of a state in which the former employee worked. 2
Basic rules of construction govern our consideration of the disputed language in a contract. We read the language used so as to give meaning to all the words; otherwise stated, we do not regard any language as meaningless, unless compelled to do so. Berry v. Klinger, 225 Va. 201, 208, 300 S.E.2d 792, 796 (1983); Hughes & Co. v. Robinson Corp., 211 Va. 4, 6-7, 175 S.E.2d 413, 415 (1970). If the language is unambiguous and capable of only one reasonable construction, we read it according to its plain meaning. Blue Cross v. McDevitt & Street, 234 Va. 191, 195, 360 S.E.2d 825, 827 (1987).
In our opinion, the language of these agreements clearly and unambiguously prohibits the former employees from engaging in the pest control business in any of the counties in which they were assigned by Paramount during the prescribed period. It does not prohibit such activities in any other counties. So limited, we find that the area is not geographically overbroad, as claimed by the former employees.
We also conclude that the restraint is reasonable in that it is no greater than reasonably necessary to protect Paramount's legitimate business interest in the counties in which the employees worked for Paramount in the two years preceding their terminations of employment. Rector and Miller, as sales representatives, Lansing, as a service coordinator, and Davis, as a service technician, had frequent contacts with Paramount's customers. These four men and Moss, as an insect inspector, were familiar with Paramount's methods of estimating the cost of its work, its specifications for doing the work, and...
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