Charles T. Creech, Inc. v. Brown, 433 S.W.3d 345

Background

Charles T. Creech, Inc. (Creech) circulated a written "Conflicts of Interests" agreement in 2006 requiring employees to keep proprietary information confidential and barring work for competitors for three years after employment; Donald E. Brown signed it, Creech did not sign.
Brown was an at-will employee of Creech for ~16–18 years; he received no raise, new title, promise of continued employment, or other tangible benefit in exchange for signing.
Brown later resigned (Nov. 2008) and began selling hay for Standlee; Creech alleged Brown used proprietary information and sued Brown and Standlee for breach, tortious interference, and sought injunctive relief.
The trial court issued a temporary injunction restricting Brown’s sales in Kentucky and forbidding disclosure of Creech’s customer information; the Court of Appeals vacated that injunction and ordered more discovery, proposing a six‑factor test.
On remand the trial court granted summary judgment to Brown and Standlee; the Court of Appeals reversed; the Kentucky Supreme Court granted review.
The Supreme Court addressed only whether the Agreement was supported by adequate consideration and whether the non‑compete was enforceable.

Issues

Issue	Plaintiff's Argument (Creech)	Defendant's Argument (Brown / Standlee)	Held
Whether Brown’s continued employment constituted adequate consideration for the post‑employment non‑compete	Continued employment after signing is sufficient consideration to support the agreement	No new rights or benefits were conferred; Brown remained at‑will and received no promotion, raise, or training — so no consideration	Held: No. Continued employment here did not furnish adequate consideration; the agreement lacked bargained‑for detriment/benefit and is unenforceable
Enforceability of a non‑compete lacking a geographic limitation	Agreement can be judicially limited (blue‑penciled) or the court can supply a reasonable geographic scope	The absence of geographic limit renders the covenant an unreasonable restraint on trade; reformation is improper absent consideration	Court did not reach or apply blue‑pencil because agreement failed for lack of consideration; trial court’s geographic modification need not be addressed
Whether the trial court properly issued and clarified an injunction restricting Brown’s sales in Kentucky	Injunctive relief needed to prevent misuse of proprietary information and customer solicitation	Creech waived objections via pre‑employment correspondence; factual disputes exist requiring discovery	Because agreement was unenforceable for lack of consideration, injunctive basis fails; summary judgment for Brown and Standlee reinstated
Whether additional discovery and the Court of Appeals’ six‑factor test should govern enforceability	More factual development required; Court of Appeals’ test should guide trial court	No material facts can overcome the legal insufficiency of consideration here	Court reversed Court of Appeals: consideration was dispositive; additional discovery and six‑factor test not required

Key Cases Cited

Luigart v. Federal Parquetry Mfg. Co., 238 S.W. (Ky. 1922) (definition of consideration as benefit to promisor or detriment to promisee)
Phillips v. Phillips, 171 S.W.2d 458 (Ky. 1943) (construing consideration principles)
Higdon Food Serv., Inc. v. Walker, 641 S.W.2d 750 (Ky. 1982) (continued employment as consideration where employment terms were altered and new rights/obligations were created)
Cent. Adjustment Bureau v. Ingram Assocs., Inc., 622 S.W.2d 681 (Ky. Ct. App. 1981) (fact‑specific finding that continued employment plus raises/training/promotions supported covenant)
Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476 (Ky. 1991) (summary judgment standard: draw all inferences for nonmovant)
Pearson ex rel. Trent v. Nat’l Feeding Sys., Inc., 90 S.W.3d 46 (Ky. 2002) (summary judgment standard review)