Watkins v. Avnet, Inc.

Citation177 S.E.2d 582,122 Ga.App. 474
Decision Date09 September 1970
Docket NumberNo. 2,No. 45482,45482,2
Parties, 1970 Trade Cases P 73,320 Richard D. WATKINS v. AVNET, INC., et al
CourtGeorgia Court of Appeals

Davis, Matthews & Quigley, Baxter L. Davis, Ron L. Quigley, Atlanta, for appellant.

M. H. Blackshear, Jr., Decatur, for appellee.

Syllabus Opinion by the Court

JORDAN, Presiding Judge.

Watkins sought a declaration in the lower court, among other things, that the restrictive covenants of an employment contract with one of the defendants, Fairmount Motor Products, a corporate division of the other defendant, Avnet, were unenforceable. The trial judge denied the plaintiff's motion for judgment on the pleadings and certified his order for direct appeal.

The pleadings disclose that Watkins was the president and majority stockholder in Southeastern Motor Products Company which Avnet acquired as a going concern under an agreement with the corporation and its stockholders dated August 1, 1967, providing for payment with preferred stock of Avnet and the dissolution of Southeastern. On the same day Watkins, by a separate agreement with Fairmount which refers to the acquisition of Southeastern, became the Branch Manager of the Southeastern Division of Fairmount. The term of employment, as stated therein, was five years, commencing August 1, 1967, and terminating July 30, 1972. His territory as Branch Manager was defined as 'including but not limited to the States of Georgia, Florida, Alabama, North Carolina, South Carolina and Tennessee (the aforementioned six states are hereinafter referred to as the 'Territory').' His duties were 'such services as Employer may from time to time direct.'

Under the restrictive covenants Watkins agreed during the term of employment and three years thereafter that he would 'not engage, directly, or indirectly, either as principal, agent, proprietor, director, officer or employee, or participate in the ownership, management, operation or control of any business which manufactures or distributes or intends to manufacture or distribute products in the territory competitive with: (i) any products presently manufactured or distributed by the Division, or (ii) any products manufactured or distributed by the Division during the term of Employee's employment.' He further agreed not to disclose any confidential information or trade secrets of the employer. These covenants are followed by provisions whereby Watkins consented to injunction as the proper relief to enforce the restrictions.

Watkins resigned from his employment, and brought the present action after being unsuccessful in obtaining assurances that the restrictive covenants would not be regarded as applicable to his purchase of a business in the automotive parts field. Held:

1. A complaint for declaratory judgment in an appropriate means for one who has not violated the restrictive covenants of an employment contract to seek a determination of the validity of the covenants. See Insurance Center v. Hamilton, 218 Ga. 597, 600, 129 S.E.2d 801.

2. The public policy of this State in respect to contracts in restraint of trade is reflected in the constitutional provision declaring that agreements which may have the effect, or are intended to have the effect, of defeating or lessening competition, or of encouraging monopoly, are illegal and void. Art. IV, Sec. IV, Par. I, State Constitution; Code, § 2-2701. This provision and Code, § 20-504 merely declare existing common law prohibiting general restraints of trade, and partial restraints, as heretofore recognized, are not void. Griffin v. Vandegriff, 205 Ga. 288, 293, 53 S.E.2d 345.

3. Under numerous decisions of the Supreme Court a contract in partial restraint of trade is enforceable if it is reasonably limited as to time and territory and not otherwise unreasonable. What is reasonable in a restrictive covenant is a matter of law for the court to decide, allowing greater latitude for covenants relating to the sale of a business than for covenants ancillary to employment. Dixie Bearings, Inc. v. Walker, 219 Ga. 353, 355, 133 S.E.2d 338; Insurance Center v. Hamilton, supra, 218 Ga. p. 601, 129 S.E.2d 801, and cases cited. For recent applications, see Edwin K. Williams & Co.-East v. Padgett, 226 Ga. 613, 176 S.E.2d 800; Career Girl Temporary Service v. Bridgewater, 226 Ga. 166 (173 S.E.2d 214). The reasonable time limitation is not applicable to the sale of a business. Brittain v. Reid, 220 Ga. 794, 796, 141 S.E.2d 903; Kutash v. Gluckman, 193...

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11 cases
  • BB&T Ins. Servs., Inc. v. Renno
    • United States
    • Georgia Court of Appeals
    • 13 Octubre 2021
    ...documents between separate (albeit corporately related) parties and with separate subject matters."); Watkins v. Avnet, Inc. , 122 Ga. App. 474, 476-77 (4), 177 S.E.2d 582 (1970) ("Although the contract here involved is clearly related to the sale of a business, and in this sense involves o......
  • BB&T Ins. Servs. v. Renno
    • United States
    • Georgia Court of Appeals
    • 13 Octubre 2021
    ... BB&T INSURANCE SERVICES, INC. v. HOYT E. RENNO, JR. et al. No. A21A1114 Court of Appeals of Georgia, Fourth Division ... parties and with separate subject matters."); ... Watkins v. Avnet, Inc. , 122 Ga.App. 474, 476-77 (4) ... (177 S.E.2d 582) (1970) ("Although the ... ...
  • Clower v. Orthalliance, Inc., CIV.A. 1:01-CV-1636-JOF.
    • United States
    • U.S. District Court — Northern District of Georgia
    • 24 Septiembre 2004
    ...will be allowed to covenants related to the sale of a business than to those covenants related to employment. Watkins v. Avnet, Inc., 122 Ga.App. 474, 476, 177 S.E.2d 582 (1970). 1. Service The court will first take the covenant not to compete which is ancillary to the parties' agreement to......
  • Torbett v. Wheeling Dollar Sav. & Trust Co.
    • United States
    • West Virginia Supreme Court
    • 14 Diciembre 1983
    ...for a restricted employee to test the enforceability of a noncompetition covenant in his or her employment contract. Watkins v. Avnet, 122 Ga.App. 474, 177 S.E.2d 582 (1970); Annot., Relief against covenant restricting right to engage in business or profession, as subject of declaratory jud......
  • Request a trial to view additional results
1 books & journal articles
  • Restrictions on Post-employment Competition by an Executive Under Georgia Law - Steven E. Harbour
    • United States
    • Mercer University School of Law Mercer Law Reviews No. 54-3, March 2003
    • Invalid date
    ...802-03. 305. Id. at 601-02, 129 S.E.2d at 804-05. 306. Id. at 602-03, 129 S.E.2d at 805. 307. Id. at 601-03, 129 S.E.2d at 804-05. 308. 122 Ga. App. 474, 177 S.E.2d 582 (1970). 309. Id. at 476-77, 177 S.E.2d at 584. 310. Id. at 474-75, 177 S.E.2d at 583. 311. Id. at 476-77, 177 S.E.2d at 58......

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