Sally Beauty Co. v. Barney

• Decision Date: 09 December 1983
• Docket Number: No. CA-0875,CA-0875
• Citation: 442 So.2d 820
• Parties: SALLY BEAUTY COMPANY v. Lester BARNEY and Elnora Barney.
• Court: Court of Appeal of Louisiana — District of US

Page 820

442 So.2d 820

SALLY BEAUTY COMPANY v. Lester BARNEY and Elnora Barney.

No. CA-0875.

Court of Appeal of Louisiana Fourth Circuit.

Dec. 9, 1983.

B. Franklin Martin, III, Ellis B. Murov, McGlinchey, Stafford, Mintz & Cellini, New Orleans, for plaintiff-appellant.

Bruce C. Waltzer, Thomas M. Derose, New Orleans, for defendants-appellees.

Before SCHOTT, BARRY and LOBRANO, JJ.

BARRY, Judge.

Plaintiff, Sally Beauty Company, appeals a partial summary judgment which dismissed four causes of action relative to an alleged noncompete agreement.

Sally sells and distributes professional beauty care products on a wholesale and retail basis in eight states. Defendant, Lester Barney, was employed by Sally since 1970 as the manager of one of its stores. Up to October, 1981 Sally's store managers were paid a salary and other benefits plus bonuses according to unwritten company policies based primarily upon sales in excess of quotas for certain time periods. Sally alleges that due to substantial sums expended on special training for store managers, the Company determined that bonuses would only be paid to store managers who would agree not to compete. On October 1, 1981 Sally sent to all managers a "Bonus Plan--Fiscal 1982" which set out guidelines to calculate bonuses and included a "non-competition agreement." It is undisputed that Barney did not sign this document. On January 15, 1982 Sally issued an "Amendment to Bonus Plan-Fiscal 1982" which provided for partial bonuses in addition to full bonuses; however, it did not contain nor make reference to a noncompete agreement. Barney signed the Amended Plan on January 22, 1982. Sally paid Barney $12,925.08 in bonuses between October 1, 1981 and December 2, 1982 when Barney resigned.

In 1979 Barney and his wife opened a retail store ("Barney's Store") approximately one block from the Sally outlet which Barney managed. Until September 1982 Barney's Store sold products manufactured or distributed by the Shackley chain; thereafter, Mrs. Barney ¹ purchased Sally products at her usual beautician's discount and offered them for sale at Barney's Store. On December 2, 1982 two Sally officials told Barney to close Barney's Store because it was in direct competition with the Sally outlet. Barney refused and resigned from Sally that same day.

The demands in Sally's lawsuit which were dismissed by partial summary judgment involve:

--Specific performance of the noncompete agreement by enjoining Lester and Elnora Barney from selling professional beauty care products within 200 miles for two years;

--$10,000 in liquidated damages;

--Return of bonuses premised on the noncompete agreement and

--Return of bonuses based on unjust enrichment.

The District Judge ruled:

Attached to plaintiff's petition are two documents, of which one is an unsigned non-competition agreement and the other a signed amendment to a bonus agreement. The plaintiff claims that the signature on the bonus agreement, as amended and which is attached to the unsigned competition agreement, amounts to a signature on the non-competition agreement.

The Court disagrees with the plaintiff's position, and therefore grants a partial summary judgment as to the first four causes of action of plaintiff's petition.

Plaintiff argues the following material facts are in dispute to circumvent the partial summary judgment:

Did Barney agree not to compete with Sally?

Did Sally spend substantial sums of money for special training of Barney?

Were bonuses paid to Barney based on the non-compete agreement?

Was Barney unjustly enriched?

The first three pages of the original Bonus Plan set forth a detailed schedule by which a store manager could earn bonuses. The third page also enumerated company policies which, if violated, would reduce bonuses. The last two lines of the Bonus Plan are on the fourth page. Up to this point there is no mention of a noncompete covenant. Thereafter the words "NONCOMPETITION AGREEMENT" are centered in bold type. There are no words which link or connect the Bonus Plan to the noncompete agreement, such as "The above Bonus Plan is contingent upon acceptance of the following." The form and style of the noncompetition agreement are in sharp contrast to the Bonus Plan. In particular, where the Bonus Plan is in ordinary prose interspersed with examples, the agreement uses formal, legal terminology and has blank lines with Lester Barney's name inserted. The agreement is on three pages followed by a signature and date line.

We find no expressed or implied connection between the Bonus Plan and the noncompete agreement. On their face each is a separate entity. The signature line appears to relate only to the noncompete agreement. Nothing suggests that bonuses would be contingent on the agreement not to compete.

Sally argues the Amended Bonus Plan incorporated the original Bonus Plan and the Amended Plan is meaningless without reference to the original. Sally urges that a document which references or refers to another for its terms incorporates the terms as though they were inserted in the former. Action Finance Corporation v. Nichols, 180 So.2d 81 (La.App. 2d Cir.1965). Sally maintains it should be allowed to depose Barney to ascertain his intent when he signed the amended agreement. Sally claims that Barney impliedly agreed to the noncompete agreement by continuing to manage the Gentilly Store and accepting bonuses. LSA-C.C. Art. 1811.

Barney did sign the Amended Bonus Plan but that document also fails to mention the noncompete agreement. Barney claims and Sally denies that bonuses were paid before he signed the Amended Plan. Regardless, we find no nexus between the Bonus Plans and the agreement not to compete. Therefore, Barney's signature on the Amended Plan and his receipt of bonuses did not evidence an expressed or implied acquiescence of the restrictive covenant.

The other dismissed causes...