Poole v. Incentives Unlimited, Inc., No. 25299.

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: TOAL, Chief Justice
• Citation: 548 S.E.2d 207,345 S.C. 378
• Parties: Carol C. POOLE, Respondent, v. INCENTIVES UNLIMITED, INC. d/b/a Dunlap Motivation and Travel, Petitioner, and Incentives Unlimited, Inc. d/b/a Dunlap Motivation and Travel, Third-Party Plaintiff, v. Northshore Travel, Inc., Third-Party Defendant.
• Decision Date: 04 June 2001
• Docket Number: No. 25299.

345 S.C. 378
548 S.E.2d 207

Carol C. POOLE, Respondent,
v.
INCENTIVES UNLIMITED, INC. d/b/a Dunlap Motivation and Travel, Petitioner, and
Incentives Unlimited, Inc. d/b/a Dunlap Motivation and Travel, Third-Party Plaintiff,
v.
Northshore Travel, Inc., Third-Party Defendant

No. 25299.

Supreme Court of South Carolina.

Heard April 5, 2001.

Decided June 4, 2001.

345 S.C. 379

D. Garrison Hill, of Hill & Hill, L.L.C., of Greenville, for petitioner

Chris B. Roberts, of Brown, Massey, Evans, McLeod & Haynsworth, P.A., of Greenville, for respondent.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

TOAL, Chief Justice:

This Court granted Incentives Unlimited's d/b/a Dunlap Motivation and Travel's ("Incentives") petition for a writ of certiorari to review the Court of Appeals' decision in Poole v. Incentives Unlimited, Inc., 338 S.C. 271, 525 S.E.2d 898 (Ct.App.1999).

FACTUAL/PROCEDURAL BACKGROUND

Carol C. Poole ("Poole") began working as an at-will travel agent for Incentives in 1992. Three and a half years later, in April 1996, Incentives asked Poole to sign an "Employment Agreement" which consisted solely of a covenant not to compete. Poole alleges she was told she had to sign the agreement in order to remain employed. Incentives states in return for signing the covenant, Poole "received continued employment" with the company. Poole signed the Employment Agreement on April 30, 1996.

345 S.C. 380

In November 1996, Poole left Incentives and began working for another travel agency. Incentives refused to transfer cruise bookings for Poole and five of her friends, causing them to re-book the cruise at an increased cost. Poole then sued Incentives to recover the increased costs. Incentives answered and counterclaimed, seeking an order temporarily enjoining Poole from violating the covenant not to compete and seeking damages for the alleged breach of the covenant. The trial court denied the request for a temporary injunction

Subsequently, both parties moved for summary judgment, and these motions were heard before the trial judge in February 1998. The trial judge, by order dated March 3, 1998, granted summary judgment to Poole on the ground the covenant not to compete was unenforceable and invalid since: (1) it was not supported by consideration; and (2) it was not witnessed by a disinterested party as required by S.C.Code Ann. § 41-19-50 (Law Co-op.1976).¹ The Court of Appeals affirmed, holding the covenant was invalid and unenforceable due to a lack of consideration. The Court of Appeals did not address the applicability of section 41-19-50. Incentives was granted certiorari, and the issues before this Court are:

I. Did the Court of Appeals err in holding continued at-will employment is insufficient consideration to support a covenant not to compete entered into during an ongoing employment relationship?

II. Did the Court of Appeals err in refusing to address the applicability of Section 41-19-50 to the case at hand?

LAW/ANALYSIS

I. Covenant Not to Compete

Incentives argues continued at-will employment is sufficient consideration for a covenant not to compete entered into during an ongoing employment relationship. Poole argues separate consideration, in addition to continued at-will employment, is need for the covenant to be enforceable. We agree with Poole.

345 S.C. 381

In Reeves v. Sargeant, 200 S.C. 494, 21 S.E.2d 184 (1942), this Court set forth the...