Eureka Laundry Co. v. Long

146 Wis. 205 | Wis. | 1911

ViNJE, T.

Tbe first question raised by tbe appeal is tbe validity of tbe portion of tbe contract set out in tbe foregoing statement of facts wherein tbe defendant agrees, during tbe term of bis employment and for two years thereafter, not to solicit laundry trade from any customers of tbe plaintiff who have been supplied by him during bis employment, and that be will not, during such employment and for two years thereafter, either directly or indirectly engage in tbe laqndry business in that part of Milwaukee known as Route 13. Were this a ease where tbe defendant bad sold plaintiff tbe laundry business and bad made tbe covenants above referred to, no question as to the validity of tbe contract would arise under tbe decisions of our own state. Cottington v. Swan, 128 Wis. 321, 107 N. W. 336; My Laundry Co. v. Schmeling, 129 Wis. 597, 109 N. W. 540, and cases cited on page 606. It meets all tbe requirements of tbe rule laid down in Tecktonius v. Scott, 110 Wis. 441, 86 N. W. 672, to tbe effect that such contracts, in order to be valid, must be limited as to time, space and extent of trade, to what is reasonable under tbe circumstances of tbe case. And it is much more limited as to time and space than tbe contract held valid in Gotiington v. Swan, supra.

Tbe question arises, Does it make any substantial difference whether tbe thing of value bargained for is contained in a contract of sale or in a contract of hiring ? If it is lawful and proper to protect a business just about to be acquwed from certain acts by tbe seller who is familiar with such business, why is it not equally lawful and proper to protect an established business from sucb acts by one wbo bas become familiar tberewitb ? We perceive no difference in principle. The purchaser says to the seller: You are familiar with this business; you know your customers; your personal acquaintance with them is such that you could divert their trade from me if you saw fit; now I will purchase your business upon the express condition that you will agree for a limited length of time not to engage in a like business in this locality; at the expiration of that time I shall know my business and my customers well enough to be able to protect myself. So the owner of an established business says to a prospective employee : In the employment you will become familiar with the customers of my business in a way that I cannot'; you will meet them frequently while I see them rarely if ever; now I will hire you upon the express condition that you will agree for a limited length of time not to solicit trade from such of my customers as you may have supplied while in my employ, and will not engage in my business within a limited time in the territory you have occupied; at the end of that time my new employees will be sufficiently well acquainted with my customers to protect my business. Why is not one contract as valid as the other ? Both are based upon valuable considerations. If it be said that the latter contract tends unreasonably to hamper employees in their quest for employment, the answer is: Whatever is reasonably necessary for the protection of a legitimate business promotes the best interests of the employees of that business. No doubt experience has shown that owners of a business like that of plaintiff need such' protection in a large city, where the customers as a rule come in contact only with the employee, and that his personality and his acquaintance with them has much to do with the retention of their patronage. Freedom to contract must not be unreasonably abridged. Neither must the right to protect by reasonable restrictions that which a man by industry, skill, and good judgment has built up; be denied. If the restrictions are not otherwise contrary to‘ public policy they must be held to be valid when they appear to be reasonably necessary for the fair protection of the employer’s business or rights, and do not unreasonably restrict the rights of the employee, dne regard being had to the subject matter of the contract and the circumstances and conditions under which it is to be performed. My Laundry Co. v. Schmeling, 129 Wis. 597, 109 N. W. 540; Gibbs v. Consolidated Gas Co. 130 U. S. 396, 9 Sup. Ct. 557; Anchor E. Co. v. Hawkes, 171 Mass. 101, 50 N. E. 509; Harrison v. Glucose S. R. Co. 116 Fed. 304.

If the restrictive covenants of the contract are held valid, it is apparent that an action at law for their breach would no more furnish an adequate remedy than would an action at law for the breach of similar covenants in a contract for the sale of a business. That equity alone can furnish an adequate remedy in such cases is well settled. My Laundry Co. v. Schmeling, supra.

Counsel for respondent grounds his case upon the fact that negative enforcement by injunction of a contract for personal services will not be decreed unless the services belong to a class that may be called unique, peculiar, individual, or extraordinary and cites the following cases to sustain the proposition: H. W. Gossard Co. v. Crosby, 132 Iowa, 155, 109 N. W. 483; Chain Belt Co. v. Von Spreckelsen, 117 Wis. 106, 94 N. W. 78; Wm. Rogers Mfg. Co. v. Rogers, 58 Conn. 356, 20 Atl. 467; Strobridge L. Co. v. Crane, 12 N. Y. Supp. 898; Burney v. Ryle & Co. 91 Ga. 701, 17 S. E. 986; Osius v. Hinchman, 150 Mich. 603, 114 N. W. 402; Cort v. Lassard, 18 Oreg. 221, 22 Pac. 1054.

In the case of H. W. Gossard Co. v. Crosby, 132 Iowa, 155, 109 N. W. 483, 6 L. R. A. n. s. 1115, the contract contained no negative covenants, and it was there sought to restrain the defendant, who had agreed to work for the plaintiff for a specified time, from entering into the same employment with any one else, namely, that of demonstrating and selling front-lace corsets.

In the case of Chain Belt Co. v. Von Spreckelsen, 117 Wis. 106, 94 N. W. 78, it was held that there was no abuse of discretion in dissolving an in junctional order restraining an expert mechanic, under contract of employment with plaintiff, from entering into the service of another company. No negative covenants were contained in the contract of service, and it was not controverted that the defendant had acquired his knowledge and skill before he entered the employ of the plaintiff.

In William Rogers Mfg. Co. v. Rogers. 58 Conn. 356, 20 Atl. 467, the court refused to enjoin defendant from leaving the employment of the plaintiff or engaging generally in other business in violation of his contract. In that case he had agreed not to engage, or allow his name to be employed in any manner, in any other or similar business, and the court very properly held that such a restriction was an unreasonable one.

In the case of Strobridge L. Co. v. Crane, 12 N. Y. Supp. 898, the court refused to restrain the defendant from working for another firm or for another person or corporation as a lithographic designer, it appearing that the purpose of the injunction was to retain the defendant in the employ of the plaintiff and there being no proof that his place could not be adequately supplied by someone else.

In Burney v. Ryle & Co. 91 Ga. 701, 17 S. E. 986, the court held that plaintiff was not entitled to an injunction restraining the defendant from working for others, even though the contract of employment contained a negative covenant, where it was apparent that plaintiff sought that remedy in order to receive the benefit of an affirmative covenant to serve him exclusively for a specified time, the services there not being individual or peculiar.

In the case of Osius v. Hinchman, 150 Mich. 603, 114 N. W. 402, tbe court evidently treated tbe purpose of tbe injunction to be to retain tbe employee in tbe service of tbe plaintiff, for tbe court says:

“After eliminating tbe matter of trade secrets, tbe contract sought to be enforced is a contract of employment containing this negative agreement, requiring no special skill other than that wbicb could be rendered by an ordinary dentist. A breach by an employee of such a contract will not be enjoined, for the reason that a substitute can be readily supplied and tbe. remedy at law is adequate.”

So that apparently was a case where tbe plaintiff sought by' injunction to retain tbe defendant in its employ, or at best to protect himself from damages by reason of tbe defendant leaving bis employment.

In Cort v. Lassard, 18 Oreg. 221, 22 Pac. 1054, 6 L. R. A. 658, tbe court refused to issue an injunction restraining tbe defendant, who was an ordinary acrobat, from entering tbe employment of others, though be bad contracted to perform exclusively for tbe plaintiff for a certain length of time. Tbe opinion went on tbe ground that tbe plaintiff could readily procure another acrobat to perform tbe services theretofore rendered by tbe defendant.

In all tbe cases above referred to tbe plaintiffs alleged damages to their businesses by reason of tbe fact that tbe defendants left their employ. We have no.such case here. In this case it is not claimed that tbe plaintiff has in any way been damaged or injured by reason of tbe fact that defendant has left its employ, and no damages are sought on that account, nor is it sought, either directly or indirectly, to retain tbe defendant in tbe employ of tbe plaintiff as in many of tbe cases cited by respondent. On tbe contrary, tbe defendant is sought to be restrained from committing certain acts, after be has left tbe employment of-tbe plaintiff, wbicb will directly inj are plaintiff’s business, and wbicb, in bis contract of employment, be specifically agreed that be would not do. So it is apparent that tbe eases cited by tbe respondent bave no application to tbe case at bar. Tbe trial court properly found that tbe services of tbe defendant in tbis case were ordinary services sucb as could be performed by any one. But tbis case presents no question as to tbe character or kind of service to be rendered. It does not lie in tbe mouth of tbe defendant to say that any one, whether skilled or unskilled, could cause similar damage to plaintiff’s business after leaving its employ. He agreed not to cause sucb damage. Tbe agreement was a reasonable and valid one, and a court of equity will enforce it.

■By the Gourt. — Order reversed, and cause remanded for further proceedings according to law.