West Group Broadcasting, Ltd. v. Bell

• Court: Missouri Court of Appeals
• Writing for the Court: SHRUM; PARRISH; CROW
• Citation: West Group Broadcasting, Ltd. v. Bell, 942 S.W.2d 934 (Mo. App. 1997)
• Decision Date: 11 February 1997
• Docket Number: No. 20785,20785
• Parties: WEST GROUP BROADCASTING, LTD., a Missouri Corporation, Plaintiff-Respondent, v. Danielle M. BELL, Defendant-Appellant.

Page 934

942 S.W.2d 934

WEST GROUP BROADCASTING, LTD., a Missouri Corporation Plaintiff-Respondent, v. Danielle M. BELL, Defendant-Appellant.

No. 20785.

Missouri Court of Appeals,

Southern District,

Division Two.

Feb. 11, 1997.

Motion for Rehearing and Transfer

Denied March 5, 1997.

William J. Fleischaker, Roberts, Fleischaker, Williams, Wilson & Powell, Joplin, for defendant-appellant.

John S. Dolence, Spencer, Scott & Dwyer, P.C., Joplin, for plaintiff-respondent.

SHRUM, Judge.

West Group Broadcasting, Ltd. ("West") operates three radio stations in the Joplin area, one of which is KXDG. On January 30, 1995, West hired Danielle M. Bell ("Bell") as an announcer for KXDG. The contract of employment included this provision:

"[T]he Employee agrees that in the event ... she resigns or is otherwise terminated ... from ... her employment with the Employer, the Employee will not compete with the Employer in any way within a 65 air mile radius from the tower location of the Employer's radio station in Joplin/Webb City, Missouri, within a period of 180 days from resignation or termination of employment."

We henceforth refer to that provision as "the noncompete covenant."

On September 1, 1995, Bell left West's employment. On October 9, 1995, she began employment as an announcer at KSYN in Joplin, a radio station operated by Big Mack Broadcasting, Inc. ("Mack").

West promptly sued Bell and Mack seeking, inter alia, an injunction enforcing the noncompete covenant. After hearing evidence, the trial court issued a preliminary injunction.

Six weeks later, the trial court heard further evidence to determine whether a permanent injunction should be issued. At the start of that hearing, West dismissed the suit as to Mack. ¹ The trial court thereafter issued a permanent injunction barring Bell from "[e]ngaging in any employment in the broadcast industry prior to February 29, 1996, within a 65 air-mile radius from West Group's tower location in Joplin, Missouri."

Bell brings this appeal from that injunction.

After briefing was completed, this court noted the injunction had expired. This court thereupon issued an order directing Bell to show cause why the appeal should not be dismissed as moot.

In response, Bell pointed out that the preliminary injunction required West to post a $1,500 bond conditioned on payment by West of all damages and costs incurred by Bell in the event the preliminary injunction was dissolved without issuance of a permanent injunction. See Rule 92.02(c). ² Bell insisted that if this court were to hold the permanent injunction should not have been issued, West's liability on the bond "remains a viable issue."

There are at least two cases which suggest West might be liable on the bond if this court were to hold the trial court erred in granting West injunctive relief. They are: R.A. Vorhof Construction Co. v. Black Jack Fire Protection Dist., 454 S.W.2d 588, 595-96 (Mo.App.1970), and Brunswick Corp., Mercury Marine Div. v. Hering, 619 S.W.2d 950, 952 (Mo.App.1981). Accordingly, there is still a ripe issue. The case is not moot and we will decide the issues on the merits. See Hering, 619 S.W.2d at 952.

The scope of our review in this judge-tried case is set forth in Rule 73.01(c) as construed in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976). The judgment of the trial court will be affirmed unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law.

Analysis of Bell's claims of error requires an account of the facts. In narrating them, we are mindful that credibility of the witnesses and the weight to be given their testimony was a matter for the trial court, which was free to believe none, part, or all of the testimony of any witness. Herbert v. Harl, 757 S.W.2d 585, 587 (Mo.banc 1988). We assume the trial court believed the testimony consistent with its judgment. Tubbs v. Delk, 932 S.W.2d 454, 455 (Mo.App.1996); Matthews v. Moore, 911 S.W.2d 664, 668 (Mo.App.1995). Consequently, we accept as true the evidence and inferences from it favorable to the judgment and disregard contrary evidence. T.B.G. v. C.A.G., 772 S.W.2d 653, 654 (Mo.banc 1989).

So viewed, the evidence establishes that during her employment by West, Bell became the regular "disc jockey" on the "seven-to-midnight show," broadcasting under the name "Hurricane Hannah." The format, i.e., the type music played, was "hot country." As Hurricane Hannah, Bell worked by herself without a co-announcer. Asked to describe her show, Bell explained she played recorded music, talked about the recording artists and other subjects, received telephone calls from listeners, and conversed with the callers on the air. At the time she left West's employ, the "Arbitron ratings" showed she had the "number-one rating" in the Joplin metropolitan market for her time slot.

Advertisers pay West to broadcast commercial messages during KXDG's programs. The amount of money West charges the advertisers is based on the number of people who listen to KXDG. That number is established by the Arbitron ratings. If the ratings show an increase in the number of KXDG's listeners, West raises the advertising rates; if the ratings show a decrease in listeners, West lowers the rates. As succinctly explained by Paul Swint, general manager of West's stations in Joplin, "[L]isteners mean ratings, and ratings mean dollars."

Upon commencing employment at KSYN (39 days after leaving KXDG), Bell was assigned the 5:30 until 10:00 a.m. shift, broadcasting news (which she wrote), conversing with the show's male host (who played recorded "contemporary" music), and participating with him in answering telephone calls from listeners. At KSYN, Bell broadcasted under the name "Robin Kane."

Bell's first point relied on asserts:

"The trial court erred in ... enjoining ... Bell from engaging in any employment in the broadcast industry prior to February 29, 1996, within a 65 air-mile radius from ... West Group's tower location in Joplin, Missouri because said judgment was not supported by any substantial evidence in that the evidence ... failed to show that ... West ... had any legally protectable 'customer contacts' which entitled it to enforce its covenant not to compete with ... Bell by enjoining her from working as an announcer for a competitor."

Analysis of this point must proceed with these principles in mind.

Covenants by employees not to compete with their employers after termination of employment are no longer contrary to public policy in Missouri, yet they still are not favored in this state. Furniture Mfg. Corp. v. Joseph, 900 S.W.2d 642, 647 (Mo.App.1995). Such covenants are carefully restricted because they deal with restraints on commerce and limit an employees's freedom to pursue his or her trade. Universal Underwriters Ins. Co. v. Lyon, 896 S.W.2d 762, 764 (Mo.App.1995) (citing Osage Glass, Inc. v. Donovan, 693 S.W.2d 71, 75 (Mo.banc 1985)). The following general rule still attends: An employer cannot extract an enforceable restrictive covenant merely to protect himself from the competition of an employee. Herrington v. Hall, 624 S.W.2d 148, 151 (Mo.App.1981). Accordingly, even when restrictive covenants on future employment are reasonable spatially and temporally, they are enforceable only if a legitimate protectable interest of the employer is served. Id.

An assessment of the reasonableness of a covenant not to compete requires a thorough consideration of surrounding circumstances, which includes the subject matter of the contract, the purpose to be served, the situation of the parties, the extent of the restraint, and the specialization of the business. Herrington, 624 S.W.2d at 151. The issue of reasonableness is one of law according to the subject matter of the agreement and the existing circumstances. House of Tools and Engineering, Inc. v. Price, 504 S.W.2d 157, 159 (Mo.App.1973).

One of the cases cited by Bell in support of the point is Grebing v. First National Bank of Cape Girardeau, 613 S.W.2d 872 (Mo.App.1981). There, in discussing covenants by employees not to compete with their employers after termination of employment, the court declared:

"The determination of reasonableness depends upon the competing needs of the parties as well as the needs of the public. These needs are: (1) the employer's need to protect legitimate business interests, such as trade secrets and customer lists, (2) the employee's need to earn a living, and (3) the public's need to secure the employee's presence in the labor pool[.]"

Id. at 874[2, 3].

Enforcement of such covenants is also discussed in Mo-Kan Central Recovery Co. v. Hedenkamp, 671 S.W.2d 396 (Mo.App.1984), another case cited by Bell. There, we learn:

" ... Missouri courts limit the granting of equitable protection to two narrowly defined classes of employer interests, customer contacts and trade secrets[.] ... The threat of competition ceases to be a real danger, 'unless it is accompanied by a knowledge of trade secrets learned by the employee during his employment, or an influence acquired by the employee over the customers of his employer.' ... 'This has led the courts to deny relief unless one of those elements is present.' "

Id. at 399.

Upon thorough review of this record in light of the above principles, we are convinced that Bell's first point has merit when it asserts that West failed to present any substantial evidence that it had a legitimate protectable interest to be served by enjoining Bell from working at KSYN. Bell asserts--and West concedes--that Bell acquired no trade secrets from West. The only evidence that Bell might exploit KXDG's customers came from KXDG general manager, Swint. He asserted that Bell's voice was, "very recognizable," that radio audiences might recognize her voice, and her fans could "go from one station to another." In our view, that is not...