Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491

Gaver was employed by Schneider’s O.K. Tire Co. on two separate occasions and signed noncompete agreements after each term; the relevant term ended July 23, 2012.
Schneider’s 2008 noncompete is the operative agreement; the 2003 agreement had already expired.
The 2008 agreement is a freestanding document tied to Schneider’s profit-sharing plan, not an employment contract, and states a 25-mile radius and 5-year duration after employment termination.
Gaver filed a amended complaint seeking declaratory judgment that the noncompetes were unenforceable; the district court held the restrictions overly broad and unenforceable.
Schneider’s appealed, arguing the noncompete protects legitimate business interests and is reasonably necessary; the court ultimately concluded the agreement is invalid and unenforceable.
The court treated the contract interpretation as a question of law and affirmed the district court’s ruling that the noncompete is unenforceable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is the 2008 noncompete enforceable under Nebraska law?	Gaver: overly broad and not reasonably necessary.	Schneider’s: protects legitimate interests and is reasonably scoped.	Unenforceable; not reasonably necessary.
Does the noncompete protect legitimate employer interests (goodwill, confidential info, trade secrets)?	Gaver asserts no sufficient legitimate interest.	Schneider’s contends it protects goodwill and other interests.	No valid legitimate interest established; invalid.
Is the breadth including non-ownership restrictions and use of earned funds overly broad?	Gaver challenges scope and anti-ownership terms.	Schneider’s argues scope is tied to preventing unfair competition.	Broad restrictions beyond necessary; unenforceable.
Should the court reform the covenant to make it enforceable?	Gaver asks no reform; seeks unenforceability.	Schneider’s asks for enforcement if reformation is possible.	Courts do not reform unreasonable covenants; not reformable here.

Securities Acceptance Corp. v. Brown, 171 Neb. 406 (Neb. 1960) (partial restraints may be enforceable if reasonable and tied to employment)
Boisen v. Petersen Flying Serv., 222 Neb. 239 (Neb. 1986) (legitimate business interests; reasonableness; no protection against ordinary competition)
Aon Consulting v. Midlands Fin. Benefits, 275 Neb. 642 (Neb. 2008) (three-factor test for covenants not to compete; reasonableness and legitimate interests)
Brockley v. Lozier Corp., 241 Neb. 449 (Neb. 1992) (forfeiture-for-competition clause treated like covenants; reasonableness governs enforceability)
Polly v. Ray D. Hilderman & Co., 225 Neb. 662 (Neb. 1987) (application of reasonableness framework to deferred bonus context)
Moore v. Eggers Consulting Co., 252 Neb. 396 (Neb. 1997) (restrictions on post-employment use of general skills generally not legitimate interests)
Vlasin v. Len Johnson & Co., 235 Neb. 450 (Neb. 1990) (three-factor test for covenants not to compete; focus on reasonableness)
Mertz v. Pharmacists Mut. Ins. Co., 261 Neb. 704 (Neb. 2001) (limited to former employer’s clients with whom employee had personal contacts)
Food Fair Stores v. Greeley, 264 Md. 105 (Md. 1972) (analysis on employee restrictions; not enforce ordinary competition)