Rollins Burdick Hunter of Wisconsin, Inc. v. Hamilton, No. 79-1473
| Court | United States State Supreme Court of Wisconsin |
| Writing for the Court | CALLOW |
| Citation | 101 Wis.2d 460,304 N.W.2d 752 |
| Parties | ROLLINS BURDICK HUNTER OF WISCONSIN, INC., Plaintiff-Appellant-Petitioner, v. Kirk W. HAMILTON and David B. Hays, Defendants-Respondents. |
| Docket Number | No. 79-1473 |
| Decision Date | 29 April 1981 |
Page 752
Plaintiff-Appellant-Petitioner,
v.
Kirk W. HAMILTON and David B. Hays, Defendants-Respondents.
Decided April 29, 1981.
Page 753
[101 Wis.2d 461] Stephen T. Jacobs (argued), William F. Flynn and Reinhart, Boerner, Van Deuren,[101 Wis.2d 462] Norris & Rieselbach, S. C., Milwaukee, on brief, for plaintiff-appellant-petitioner.
Craig W. Nelson (argued), and Piette, Knoll & Nelson, Milwaukee, on brief for defendants-respondents.
CALLOW, Justice.
On this review we must consider, first, whether a noncompetition agreement which prohibits a former employee from soliciting clients of the former employer for a specified time is unreasonable as a matter of law for failing to contain a territorial limitation expressed in geographic terms; and second, whether such an agreement is unreasonable as a matter of law if it prohibits solicitation of all clients of the former employer as opposed only to those with whom the former employee had contact. The circuit court for Waukesha County, John P. Buckley presiding, granted judgment dismissing the employer's action to enforce the agreement, and the court of appeals affirmed.
The petitioner, Rollins Burdick Hunter of Wisconsin, Inc. (RBH), formerly known as Goetz-Haessler-James, Inc., is an insurance agency with its offices located in Milwaukee, Wisconsin. The respondents, Hamilton and Hays, are former RBH employees. In 1974 Hamilton and Hays executed identical agreements not to compete with Goetz-Haessler-James, Inc., the pertinent part of which provides:
"2. After Termination of Employment. If Employee terminates his employment with Agency for any reason or if Agency terminates his employment for cause, Employee agrees that he will not, directly or indirectly (through partners, agents, employers, employees or any other persons acting for Employee) for a period which is the lesser of (i) two years or (ii) Employee's period of employment from the date of this Agreement until termination, solicit, contact or otherwise do any competitive business with any individual, firm, corporation, partnership, organization or association who was a customer [101 Wis.2d 463] or client of Agency during a period which is the lesser of (i) two years or (ii) Employee's period of employment from the date of this Agreement until termination. (Emphasis added.)
"...
"4. Injunction. Employee, recognizing that irreparable injury will result to Agency and its business in the event of breach of this Agreement by Employee, agrees that in the event of breach of this Agreement in addition to any other remedies and damages available, Agency shall be entitled to an injunction restraining
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further violation of this Agreement by Employee, his partners, agents, employers, employees and all other persons acting for or with him."Goetz-Haessler-James, Inc., became Rollins Burdick Hunter of Wisconsin, Inc., in March of 1979; and on June 29, 1979, Hamilton and Hays voluntarily terminated their employment with RBH. On July 27, 1979, prompted by its belief that Hamilton and Hays were soliciting insurance business from RBH clients, RBH commenced an action in circuit court seeking a permanent injunction against Hamilton and Hays prohibiting them from violating the terms of the noncompetition agreement. Shortly thereafter RBH filed a motion for a temporary injunction pendente lite. Hamilton and Hays moved to dismiss the action for failure to state a claim upon which relief can be granted. Affidavits were filed supporting and opposing the motion for a temporary injunction, and a hearing on that motion and the motion to dismiss was held in the circuit court on August 13, 1979.
In a decision dated August 28, 1979, the circuit court observed that RBH had a total of about six thousand clients and that Hamilton and Hays, as RBH employees, had knowledge of or contact with about one hundred seventy-five of those. Relying upon Chuck Wagon Catering, Inc. v. Raduege, 88 Wis.2d 740, 277 N.W.2d 787 (1979), the court concluded that the agreement was unreasonable[101 Wis.2d 464] as to its territorial limitation because its prohibition on the solicitation of RHB customers extended beyond those clients actually serviced by Hamilton and Hays. Further concluding that the agreement was therefore unreasonable as to Hamilton and Hays and thus unenforceable pursuant to sec. 103.465, Stats., 1 the court denied RBH's motion for a temporary injunction and granted Hamilton's and Hays' motion to dismiss. The court of appeals, in a per curiam opinion, affirmed the circuit court, holding that the absence of an express geographic territorial limitation in the agreement was not in itself fatal, but that the territorial limitation even as expressed in terms of RBH clients was unreasonable in this case because it extended to RBH clients with whom Hamilton and Hays had had no contact. The court of appeals treated the circuit court's order as one granting summary judgment and concluded that none of the remaining factual issues would redeem the unreasonableness of the agreements. Hunter of Wisconsin, Inc. v. Hamilton, 97 Wis.2d 758, 295 N.W.2d 834 (Ct.App.1980). We concur with the court of appeals that a geographic territorial limit is not essential to a valid covenant not to compete, but we cannot conclude on the basis of the record before us that the instant agreements are unreasonable as a matter of law, and therefore we reverse and remand for further proceedings.
[101 Wis.2d 465] I.
It appears as though the primary reason both courts below concluded the agreements in this case were unreasonable is that they prohibited Hamilton and Hays from soliciting RBH clients with whom they had had no contact during their employ at RBH. Before we address that issue, we must consider as a preliminary matter the contention of Hamilton and Hays that the agreements are per se invalid because they do not contain a territorial limitation expressed in geographic terms. The court of appeals rejected that argument and so do we.
Professor Blake, in his work on postemployment restraints, states:
"The traditional dimensions of a restraint have been those of duration and
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geographic area. The 'activity' dimension was not an issue in the earliest cases; a trade was a...To continue reading
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Tatge v. Chambers & Owen, Inc., No. 95-2928
...established by examination of the particular circumstances which surround it. See Rollins Burdick Hunter of Wisconsin, Inc. v. Hamilton, 101 Wis.2d 460, 468, 304 N.W.2d 752 (1981) ("[W]hat is reasonable varies from case to case, and what may be unreasonable in one instance may be very reaso......
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Star Direct, Inc. v. Dal Pra, No. 2007AP617.
...apply to past customers, and have been untroubled by this asserted interest. ¶ 33 In Rollins Burdick Hunter of Wis., Inc. v. Hamilton, 101 Wis.2d 460, 304 N.W.2d 752 (1981) (hereafter "Hamilton"), this court considered a restrictive covenant that prohibited the two defendant employees from ......
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Manitowoc Co. v. Lanning, No. 2015AP1530
...the particular circumstances which surround it." Id. at 116–17, 579 N.W.2d 217 (citing Rollins Burdick Hunter of Wis., Inc. v. Hamilton, 101 Wis. 2d 460, 468, 304 N.W.2d 752 (1981) ("What is reasonable varies from case to case, and what may be unreasonable in one instance may be very reason......
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L.L.N. v. Clauder, No. 95-2084
...a genuine issue of material fact are resolved against the moving party. See, e.g., Rollins Burdick Hunter of Wisconsin, Inc. v. Hamilton, 101 Wis.2d 460, 470, 304 N.W.2d 752 (1981) (quoting Maynard v. Port Publications, Inc., 98 Wis.2d 555, 562-63, 297 N.W.2d 500 (1980)); Grams, 97 Wis.2d a......
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Tatge v. Chambers & Owen, Inc., No. 95-2928
...established by examination of the particular circumstances which surround it. See Rollins Burdick Hunter of Wisconsin, Inc. v. Hamilton, 101 Wis.2d 460, 468, 304 N.W.2d 752 (1981) ("[W]hat is reasonable varies from case to case, and what may be unreasonable in one instance may be very reaso......
-
Star Direct, Inc. v. Dal Pra, No. 2007AP617.
...apply to past customers, and have been untroubled by this asserted interest. ¶ 33 In Rollins Burdick Hunter of Wis., Inc. v. Hamilton, 101 Wis.2d 460, 304 N.W.2d 752 (1981) (hereafter "Hamilton"), this court considered a restrictive covenant that prohibited the two defendant employees from ......
-
Manitowoc Co. v. Lanning, No. 2015AP1530
...the particular circumstances which surround it." Id. at 116–17, 579 N.W.2d 217 (citing Rollins Burdick Hunter of Wis., Inc. v. Hamilton, 101 Wis. 2d 460, 468, 304 N.W.2d 752 (1981) ("What is reasonable varies from case to case, and what may be unreasonable in one instance may be very reason......
-
L.L.N. v. Clauder, No. 95-2084
...a genuine issue of material fact are resolved against the moving party. See, e.g., Rollins Burdick Hunter of Wisconsin, Inc. v. Hamilton, 101 Wis.2d 460, 470, 304 N.W.2d 752 (1981) (quoting Maynard v. Port Publications, Inc., 98 Wis.2d 555, 562-63, 297 N.W.2d 500 (1980)); Grams, 97 Wis.2d a......