USA Chem, Inc. v. Lewis
| Decision Date | 29 August 1977 |
| Docket Number | No. KCD,KCD |
| Citation | 557 S.W.2d 15 |
| Parties | USA CHEM, INC., a corporation, Appellant, v. Gary Allen LEWIS and Gary Allen Lewis, d/b/a Ger-Chem Industries, Respondents. 28643. |
| Court | Missouri Court of Appeals |
Arlyn D. Haxton, Truman K. Eldridge, Jr., Dietrich, Davis, Dicus, Rowlands & Schmitt, Kansas City, Edwin Tobolowsky, Neal E. Young, Tobolowsky & Schlinger, Dallas, Tex., for appellant.
Bernard Passer, Kansas City, Lyle M. Hanson, Mission, Kan., for respondents.
Before SHANGLER, P. J., and WELBORN and HIGGINS, Special Judges.
Action by USAchem to enforce postemployment covenants in its employment contract with Gary Allen Lewis, and for damages for breach of such covenants. Appeal from judgment which denied relief and dissolved a preliminary injunction which restrained the employee from competition with USAchem. There is no question that Gary Allen Lewis violated his employment contract; and the dispositive question is whether restrictive covenants in the contract are enforceable as a reasonable restraint upon his employment. Reversed and remanded.
USAchem is the successor to National Chemsearch Corporation of Missouri. It trains and employs some 1200 commission salesmen, and its business depends upon orders generated by them. Gary Allen Lewis was hired under a standard employment agreement and it provides most of the pertinent facts:
SALES REPRESENTATIVE'S AGREEMENT
THIS AGREEMENT, made and entered into this 22nd day of August, 1967, between NATIONAL CHEMSEARCH CORPORATION OF MISSOURI, a Texas corporation (hereinafter referred to as "Company"), and Gary Allen Lewis (hereinafter referred to as "Representative"):
WITNESSETH:
In consideration of One Dollar ($1.00) and other good and valuable considerations in hand paid by Company to Representative, the employment of Representative upon the terms and provisions herein set forth, the mutual covenants and agreements herein contained and each act done pursuant hereto by either of the parties, it is covenanted and agreed as follows:
1. Company hereby employs Representative, subject to the conditions hereinafter set forth, as a sales representative on a commission basis in the territory specified in Paragraph 4 or such other territory(ies) as Company in its discretion may from time to time assign to Representative (such territory being hereafter referred to as the "assigned territory"). The Commissions to be paid to Representative shall be in accordance with the Commission Schedule and Commission Rules and Regulations of the Company as amended by the Company from time to time. Company may periodically advance to Representative against commissions earned and commissions to be earned amounts established by the Company from time to time. * * * The weekly compensation to be advanced by Company to Representative shall be in accordance with Sales Representative's Compensation Agreement attached hereto and made a part hereof. The Company shall have the right to do business in the assigned territory under various trade names. The Company reserves the right to employ other Representatives to solicit and sell in the assigned territory.
2. Representative accepts said employment, and it is agreed that the duties of the Representative shall be such as are from time to time assigned to him * * *.
3. It is expressly recognized and acknowledged by Representative that Company and its affiliated and associated Companies are engaged in the manufacture, distribution and sale of disinfectants, soaps, detergents, cleaners, insecticides, chemical specialties, paints, water treatments, maintenance chemicals, adhesives, glues, paper products for industry and institutions, degreasing and sanitary supply and floor maintenance materials and equipment and related products, in substantially all of the states in the continental limits of the United States, including the assigned territory. It is expressly recognized and acknowledged by Representative that (i) Company has developed and established by a valuable and extensive trade of its products; (ii) its business connections and customers have been established and maintained at great expense and are of great value to it; (iii) that Representative desires employment by Company and by virtue of such employment Representative will become familiar and possessed of the manner, methods and secrets and confidential information pertaining to such business, including without limitation; sales volume and strategy, number and location of sales representatives, and names and lists of Company's customers and clientele; (iv) by virtue of such employment Representative will become personally acquainted with the customers and trade of Company in the assigned territory; and (v) Company will suffer great loss and damage if, during Representative's employment by Company or at any time subsequent to the termination of such employment, Representative should (a) for himself or on behalf of any other person(s), firm(s), partnership(s) or corporation(s) sell, offer for sale or solicit the sale of disinfectants, soaps, detergents, chemical specialties, paints, water treatments, maintenance chemicals, cleaners, insecticides, adhesives, glues, paper products for industry and institutions, degreasing, sanitary supply and floor maintenance materials and equipment in the assigned territory or (b) engage in or enter the employment of or act as a sales agent or broker for the products of or as an advisor or consultant to any person(s), firm(s), partnership(s), or corporation(s) engaged in or about to be engaged in the manufacture, distribution or sale of disinfectants, soaps, detergents, chemical specialties, paints, water treatments, maintenance chemicals, cleansers, insecticides, adhesives, glues, paper products for industry and institutions, degreasing, sanitary supply and floor maintenance materials and equipment business in the assigned territory. Representative further recognizes and acknowledges that (i) it will be difficult, if not impossible to compute the amount of such loss or damages, (ii) by reason of Representative's financial circumstances Representative cannot respond in damages in an action at law to compensate Company for such loss or damages, and (iii) Company, accordingly, is without adequate legal remedy in the event Representative violates any of the covenants contained in Paragraphs 4 and 5. Representative acknowledges that the covenants and conditions of this Agreement are reasonable and necessary for the protection of the Company's business.
4. Representative expressly covenants and agrees that during the term of his employment by Company and for a period of eighteen (18) months immediately following the expiration or termination of such employment for any reason including, without limitation, termination by mutual agreement, (i) he will not at any time for himself or on behalf of any other person(s), firm(s), partnership(s), or corporation(s), sell, offer for sale, or solicit the sale of disinfectants, soaps, detergents, cleaners, chemical specialties, paints, water treatments, maintenance chemicals, insecticides, adhesives, glues, paper products for industry and institutions, degreasing and sanitary supply and floor maintenance materials and equipment within the assigned territory, viz:
A. The County of Douglas in the State of Nebraska (changed by amendment of November 3, 1967, to Jackson County, Missouri, and supplemented by amendment of April 6, 1970, to assign Wyandotte, Leavenworth, and Johnson Counties, Kansas).
F. Any territory(ies) in which Representative sells, offers for sale, or solicits the sale of disinfectants, soaps, detergents, cleaners, chemical specialties, paints, water treatments, maintenance chemicals, insecticides, adhesives, glues, paper products for industry and institutions, degreasing and sanitary supply and floor maintenance materials and equipment for Company or one or more of its affiliated and associated companies;
(ii) he will not in any way, directly or indirectly, for himself or on behalf of or in conjunction with any other person(s), partnership(s), firm(s), or corporation(s), solicit, divert, take away or attempt to take away any of the Company's customers or the business or patronage of any such customers located within said assigned territory; and (iii) he will not in any way, directly or indirectly, for himself or on behalf of or in conjunction with any person(s), partnership(s), firm(s), or corporation(s), solicit, entice, hire, employ or endeavor to employ any of the Company's employees. Representative further covenants and agrees that he will not within said period of time, directly or indirectly, engage in or enter the employment of or act as a sales agent or broker for the products of or as an advisor or consultant to any person(s), firm(s), partnership(s) or corporation(s) engaged in or about to become engaged in the manufacture, distribution or sale of disinfectants, soaps, detergents, cleaners, insecticides, chemical specialties, paints, water treatments, maintenance chemicals, adhesives, glues, paper products for industry and institutions, degreasing and sanitary supply and floor maintenance materials and equipment within the assigned territory. During the term of Representative's employment by Company or any of its subsidiaries, affiliates, successors or associated companies, Representative further agrees not to sell, offer for sale or solicit the sale of disinfectants, soaps, detergents, cleaners, insecticides chemical specialties, paints, water treatments, maintenance chemicals, adhesives, glues, paper products for industry and institutions, degreasing and sanitary supply and floor maintenance materials and equipment and any other products of Company in any other territory or area except as provided in this paragraph or any additions or amendments thereto. Representative further...
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