Silbros Inc. v. Solomon

• Court: New Jersey Court of Chancery
• Writing for the Court: Jayne, V. C.
• Citation: Silbros, Inc. v. Solomon, 139 N.J.Eq. 528, 52 A.2d 534 (N.J. Ch. 1947)
• Decision Date: 22 April 1947
• Docket Number: 147/658,147/658.
• Parties: SILBROS, Inc., v. SOLOMON et al.

52 A.2d 534

SILBROS, Inc.,

v.SOLOMON et al.

147/658.

Court of Chancery of New Jersey.

April 22, 1947.

Suit by Silbros, Inc., against Peter J. Solomon and another to restrain defendants from violation of an employment contract prohibiting first-named defendant from engaging in a competitive business.

Final decree entered for complainant.

Syllabus by the Court.

1. Neither modern public policy nor the judicial decisions of recent years have disapproved of contracts in restraint of trade between employer and employee where the restraint is reasonably necessary for the protection of the business of the employer and not unreasonably restrictive in point of time or territory upon the rights of the employee.

2. The fact that the plaintiff did not choose to read the paper, or the material parts of it, before signing, or did not know its contents at the time, cannot, in the absence of actual fraud, relieve him from its obligations. This doctrine arises from the well-settled principle that affixing a signature to a contract creates a conclusive presumption, except as against fraud, that the signer read, understood, and assented to its terms.

Alexander Budson, of Trenton (Leon L. Levy, of Trenton, of counsel), for complainant.

David L. Horuvitz, of Bridgeton, for defendants.

JAYNE, Vice Chancellor.

Neither modern public policy nor the judicial decisions of recent years have disapproved of contracts in restraint of trade between employer and employee where the restraint is reasonably necessary for the protection of the business of the employer and not unreasonably restrictive in point of time or territory upon the rights of the employee. Mandeville v. Harman, 42 N.J.Eq. 185, 7 A. 37; Crane v. Peer, 43 N.J.Eq. 553, 4 A. 72; Sternberg v. O'Brien, 48 N.J.Eq. 370, 22 A. 348; American Ice Co. v. Lynch, 74 N.J.Eq. 298, 70 A. 138; Fleckenstein Bros. Co. v. Fleckenstein, 76 N.J.L. 613, 71 A. 265, 24 L.R.A., N.S., 913; Owl Laundry Co. v. Banks, 83 N.J.Eq. 230, 89 A. 1055; Sarco Co. of New Jersey v. Gulliver, 129 A. 399, 3 N.J.Misc. 641, affirmed 99 N.J.Eq. 432, 131 A. 923; A. Fink & Sons v. Goldberg, 101 N.J.Eq. 644, 139 A. 408; Stein v. Kommit, 105 N.J.Eq. 90, 147 A. 111; Ideal Laundry Co. v. Gugliemone, 107 N.J.Eq. 108, 151 A. 617; Gordon Supply Co. v. Galuska, 113 N.J.Eq. 353, 166 A. 700; Capital Laundry Co. v. Vannozzi, 115 N.J.Eq. 26, 169 A. 554; Voices, Inc., v. Metal Tone Mfg. Co., 119 N.J.Eq. 324, 182 A. 880, affirmed 120 N.J.Eq. 618, 187 A. 370; Davey Tree Expert Co. v. Ahlers, 124 N.J.Eq. 175, 200 A. 1012; Abalene Exterminating Co. v. Oser, 125 N.J.Eq. 329, 5 A.2d 738; Vander May v. Schoone-Jongen, 128 N.J.Eq. 336, 16 A.2d 198, affirmed 130 N.J.Eq. 227, 21 A.2d 819; Original New York Furriers Co. v. Williams, 133 N.J.Eq. 524, 33 A.2d 292; Irvington Varnish & Insulator Co. v. Van Norde, 138 N.J.Eq. 99, 46 A.2d 201.

The complainant during a span of many years has been engaged in the business of selling clothing at retail and on credit. It conducts its so-called credit stores in several localities. In past years the defendant Solomon has been in the employ of the complainant in various capacities. He was manager of the store at Manchester, Connecticut, salesman in the store at Bridgeton, New Jersey, following which he served as manager of the store at New Brunswick, New Jersey, where he was engaged when he was inducted into military service in the recent war. Thus he imbibed the involutions of the retail credit business.

Upon his honorable discharge by the military authorities, he tentatively resolved to seek employment with another company, but at an interview with the president of the complainant company he decided to accept from the complainant the position of manager of its store at Bridgeton.

On November 1, 1943, he executed an employment contract in which the following negative covenants are embodied:

‘5. The parties hereto recognizing that the Company's business of sales on credit is based largely on credit information, recorded on various customers lists and statistical data, and other records of the Company acquired, collected and classified as the result of substantial outlay in establishing its business in various places in the United States, including the City of Bridgeton and that the trade and good will of the Company in said place and the vicinity thereof with its customers has been established at substantial cost and effort and that irreparable damage will result to the Company if such lists, records or information are obtained or used by any other person or competitor of the Company, or if said goodwill is diverted from the Company and the said employment being obtained and based upon the trust and confidence reposed by the Company in the Manager with respect to the proper use of such lists, records and information solely for the Company's benefits and recognizing that the giving of such employment efforts (sic) the Manager opportunity of favorable relations with said customers and access to such confidential lists, records, and information concerning the Company's business in consideration thereof and in consideration of the employment obtained by the Manager hereunder, the Manager hereby covenants that in the event of the termination of said employment the manager will not, for a period of two (2) years from the date of such termination, engage in the business of the retail sale of cloaks and suits, or clothing on credit on his own account or become interested in such business directly or indirectly as an individual, partner, stockholder, director, officer, clerk, principal, agent, employe, or in any other relation or capacity whatsoever in the said City of Bridgeton.

‘The Manager further separately covenants that for two years after his employment with the Company ceases he will not directly or indirectly solicit, circularize or aid in soliciting or circularizing (generally or specifically) any business relating to the retail sale of cloaks and suits or clothing on credit from any customer or customers...