[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *415
Howell Engineering and Surveying, Inc. ("HES"), sued Crown Castle USA, Inc. ("Crown Castle"), and Gloria Brown, a former employee of HES who had also performed work for Crown Castle. The case was tried before a jury; it rendered a verdict in favor of HES and against Crown Castle and Brown and awarded damages. The trial court entered a judgment on the verdict. Crown Castle and Brown appealed, and this Court transferred the appeal to the Court of Civil Appeals pursuant to §
Crown Castle,"Crown Castle USA, Inc. ('Crown'), leases space on cellular-telephone towers to cellular-telecommunications providers. In conducting its business, Crown uses the services of several types of professionals, including land surveyors and civil or structural engineers. In the years before approximately mid to late 2002, Crown contracted with local vendors for the surveying and engineering services it required. Howell Engineering and Surveying, Inc. ('HES'), was one of Crown's approved vendors. Before November 2001, HES and Crown operated under a professional-services agreement ('the former agreement'). In November 2001, HES and Crown entered into a new agreement, entitled the `A E Agreement,' to govern their business relationship, which was explicitly defined in the A E Agreement as an independent-contractor relationship. The A E Agreement included provisions governing such things as the procedures for invoicing, the requirement that the contractor have certain insurance, the grounds for termination of the agreement, and confidentiality. The A *416 E Agreement also specifically stated that the agreement was not exclusive and that Crown could award projects to other contractors. In addition, the A E Agreement contained the following provision in Paragraph 15E, which we will refer to as the `no-solicitation/no-hire provision':
`"Contractor and Crown mutually agree not to solicit nor hire individuals actively employed by the other party's respective organization during and for a period of one (1) year following termination of this Agreement, without the prior written consent of the other party, which consent will not be unreasonably withheld.'
"In October 2001, before the execution of the A E Agreement between Crown and HES, Gloria Brown, HES's only civil structural engineer, sought to become an approved vendor for Crown. Brown had decided to start her own business; however, she continued to work for HES. In February 2002, Brown began working on projects assigned to her by Crown. The employee handbook provided to Brown and other employees by HES contained the following provision:
"`MOONLIGHTING
"`Moonlighting is strongly discouraged and must be approved in advance by the President. No moonlighting will be permitted if it is a conflict of interest with our company. Failure to have other employment authorized in advance is grounds for immediate dismissal.'
"Sometime around March 15, 2002, Larry Howell, the president of HES, learned that Brown was doing projects for Crown independently. Immediately after he discovered that Brown was working for Crown, Larry Howell terminated Brown's employment with HES. He testified that he had `laid [Brown] off and that he had explained to her that the business from Crown was slowing down and that he could not afford to continue employing her.
"HES sued Crown, alleging that Crown had breached the A E Agreement and the former agreement between the parties and that Crown had intentionally interfered with HES's business relations. HES also sued Brown, alleging that Brown had intentionally interfered with HES's business relations and that Brown had converted certain items of property owned by HES. The intentional-interference-with-business-relations claims against both Brown and Crown were disposed of by the entry of summary judgments in favor of Brown and Crown. The remaining claims proceeded to a jury trial, at which the breach-of-contract claim based on the former agreement between Crown and HES was voluntarily withdrawn by HES. After Crown's and Brown's respective preverdict motions for a judgment as a matter of law ('JML') at the close of HES's evidence and at the close of all the evidence were denied by the trial court, the remaining breach-of-contract claim based on Crown's alleged breach of the A E Agreement and the conversion claim against Brown were submitted to the jury. The jury returned a verdict in favor of HES and against both Brown and Crown, awarding HES $618,634 in damages on its breach-of-contract claim against Crown and $7,300 in compensatory damages and $73,000 in punitive damages on its conversion claim against Brown. Crown and Brown each filed postjudgment motions; Crown's postjudgment motion was denied, but the trial court granted Brown's postjudgment motion in part, *417 remitting the punitive-damages award to $50,000. Both Crown and Brown appealed to the Alabama Supreme Court. Brown's appeal was later dismissed by agreement of the parties.
"Later, HES filed a garnishment action against Crown and Brown to recover from Crown a portion of the $57,300 judgment against Brown. The trial court determined that Crown owed Brown $24,600, which amount was subject to garnishment by HES. Crown appealed that judgment to this court (case no. 2031147). Crown's appeal of the judgment entered on the jury's verdict was then transferred to this court, pursuant to Ala. Code 1975, §
12-2-7 (6), assigned case no. 2040076, and the two appeals were consolidated."
The Court of Civil Appeals reversed the trial court's judgment as to the breach-of-contract claim and remanded the case with instructions that the trial court enter a judgment in favor of Crown Castle.1 Relying upon Dyson Conveyor Maintenance,Inc. v. Young Vann Supply Co.,
"The no-solicitation/no-hire provision in the A E Agreement between Crown and HES is only void with respect to Brown because HES does not have a noncompetition agreement with her. If HES had had a noncompetition agreement with Brown, the provision would have been enforceable to the extent that it did not impose a greater restraint than that noncompetition agreement."
In its petition for a writ of certiorari, HES first contended that the Court of Civil Appeals' holding that the no-hire provision was void because HES did not have a noncompetition agreement with Brown conflicts with this Court's holding inSoutheast Cancer Network, P.C. v. DCH HealthcareAuthority,
HES next contended that the Court of Civil Appeals' holding that Crown Castle had standing to challenge the no-hire provision *418
also conflicts with Southeast Cancer, in which this Court questioned whether one of the parties had standing to invoke §
Finally, HES contended that the Court of Civil Appeals' refusal to hold that Crown Castle was equitably estopped from asserting the invalidity of the no-hire provision conflicts withPierce v. Hand, Arendall, Bedsole, Greaves Johnston,
Blue Cross Blue Shield of Alabama v. Hodurski,"The standard of review applicable to a determination of standing was accurately set forth by Judge Crawley in Medical Association of the State of Alabama v. Shoemake,
, 656 So.2d 863 865 (Ala.Civ.App. 1995) ('No presumption of correctness exists as to the trial court's application of the law to the facts. Jayroe v. Hall,(Ala. 1993). The issue of standing presents a pure question of law, and the trial court's ruling on that issue is entitled to no deference on appeal. Richards v. Cullen, 624 So.2d 522 , 152 Wis.2d 710 712 ,, 449 N.W.2d 318 319 (App. 1989).')."
Waddell Reed, Inc. v. United Investors Life Ins.Co.,"When reviewing a ruling on a motion for a JML, this Court uses the same standard the trial court used initially in deciding whether to grant or deny the motion for a JML. Palm Harbor Homes, Inc. v. Crawford,
(Ala. 1997). Regarding questions of fact, the ultimate question is whether the nonmovant has presented sufficient evidence to allow the case to be submitted to the jury for a factual resolution. Carter v. Henderson, 689 So.2d 3 (Ala. 1992). The nonmovant must have presented substantial evidence in order to withstand a motion for a JML. See § 598 So.2d 1350 12-21-12 , Ala. Code 1975; West v. Founders Life Assurance Co. of Florida,, 547 So.2d 870 871 (Ala. 1989). A reviewing court must determine whether the party who bears the burden of proof has produced substantial evidence creating a factual dispute requiring resolution by the jury. Carter,. In reviewing a ruling on a motion for a JML, this Court views the evidence in the light most favorable to the nonmovant and entertains such reasonable inferences as the jury would have been free to draw. Id. Regarding a question of law, however, this Court indulges no presumption of correctness as to the trial court's ruling. Ricwil, Inc. v. S.L. Pappas Co., 598 So.2d at 1353(Ala. 1992)." 599 So.2d 1126
HES argues that only those parties who have a direct interest in the application of §
In response, Crown Castle argues that this Court should reject HES's argument that Crown Castle lacked standing to challenge the no-hire provision. Crown Castle points out that inDyson and Defco the corporations alleged to have violated the no-hire agreements were permitted to argue the invalidity of those agreements. Crown Castle maintains that this Court has never held that a party to an invalid agreement, who has been sued for violation of that agreement, lacks standing to defend the case based on the invalidity of the agreement. Crown Castle argues that an employer sued for hiring an employee in violation of §
Section
"[T]his Court has long held that not every contract which imposes a restraint on trade or competition is void. Contracts which impose only a partial restraint on competition are permitted when the public welfare is not injured and the contract is properly restricted as to persons and territory affected. In Terre Haute Brewing Co. v. McGeever,
, 198 Ala. 474 (1916), this Court held that a contract, whereby a retailer agreed to buy all the beer he needed from the other party, was not void as a restraint on commerce or competition, because it amounted only to a partial restraint on trade and did not affect the public interest. Denton v. Alabama Cotton Co-op. Ass'n, 73 So. 889 , 30 Ala.App. 429 (1942), involved `an agreement by cotton warehousemen to recognize only the classification of cotton made by a cotton classer of their own selection to the exclusion of all other licensed classers.' 7 So.2d 504 "In Denton, the Court of Appeals held that `it is not unlawful for any number of persons, without an unlawful object in view, to associate and agree that they will not work for, employ or deal with certain individuals or classes of individuals.'
, 30 Ala.App. at 4327 So.2d at 507 ."
In Tomlinson, Humana and a pathology practice group entered into a contract giving the practice group exclusive privileges. A pathologist with the practice group, once he was no longer employed with the group, sought staff privileges at Humana for the purpose of practicing pathology, and Humana refused to extend privileges, citing its exclusive agreement with the pathology practice group. This Court declined to find a violation of §
Notwithstanding the foregoing established law, inDyson, supra, and Defco, supra, this Court invalidated even partial restraints of trade by upholding such restraints only where, and implicitly because of, an agreement between the employer and employee imposed a restraint that was permitted by an exception in §
The Dyson Court attempted to harmonize those lines of cases as follows:
"We recognize that this Court has often said that contracts in partial restraint of trade may be allowed. Tomlinson v. Humana, Inc.,
(Ala. 1986); Hoppe v. Preferred Risk Mutual Ins. Co., 495 So.2d 630 (Ala. 1985); Famex, Inc. v. Century Ins. Services, Inc., 470 So.2d 1161 (Ala. 1982); Hibbett Sporting Goods, Inc. v. Biernbaum, 425 So.2d 1053 (Ala. 1980); Terre Haute Brewing Co. v. McGeever, 391 So.2d 1027 , 198 Ala. 474 (1916). This statement has always come in the context where the one who is restrained from engaging in some aspect of a trade or business has entered into a contract, for a consideration, with the party seeking to enforce the contract. We do not see how the principle that allows `partial restraints' can apply to restrain employees from competing with their former *421 employers without the employees' having entered into such an agreement." 73 So. 889
"By this opinion, we hold that a `partial restraint of trade' is subject to §
8-1-1 , but will be upheld when it is properly restricted as to territory, time, and persons and where it is supported by sufficient consideration."
Then, in Southeast Cancer, this Court reviewed an agreement between DCH Healthcare and Oncology Associates, a practice group of oncology physicians, which provided that the practice group had the exclusive right to staff privileges for oncology services at DCH. The trial court upheld the restriction in an action brought by Southeast Cancer, a rival practice group. This Court summarized Southeast Cancer's contention that the contract conferring exclusive rights on Oncology Associates at DCH was invalid as follows:
". . . Southeast argues that the trial court erred in its application of the law and that the contract between DCH and Oncology Associates should be declared void under §
8-1-1 , Ala. Code 1975, because that contract prohibits Southeast's oncologists from practicing oncology at DCH facilities."
"`[T]his Court has long held that not every contract which imposes a restraint on trade or competition is void.' Tomlinson v. Humana, Inc.,, 495 So.2d 630 631-32 (Ala. 1986). The fact that a contract ` "may affect a few or several individuals engaged in a like business does not render it void [under §8-1-1 , Ala. Code 1975]."' Reed v. Herren,, 423 So.2d 139 142 (Ala. 1982) (quoting Terre Haute Brewing Co. v. McGeever,, 198 Ala. 474 480 ,, 73 So. 889 891 (1916)). Every contract' "to some extent injures other parties; that is, it necessarily prevents others from making the sale or sales consummated by such contract."' Reed,(quoting Terre Haute Brewing Co. v. McGeever, 423 So.2d at 142, 198 Ala. 474 480 ,, 73 So. 889 891 (1916))."
In this case, the Court of Civil Appeals upheld the line of cases holding even partial restraints of trade illegal and thus reversed the judgment of the trial court, relying on our pre-Southeast Cancer cases in which we held that partial restraints of trade were illegal under §
"`We recognize that this Court has often said that contracts in partial restraint of trade may be allowed. This statement has always come in the context where the one who is restrained from engaging in some aspect of trade or business has entered into a contract, *422 for a consideration, with the party seeking to enforce the contract. We do not see how the principle that allows "partial restraints" can apply to restrain employees from competing with their former employers without the employees' having entered into such an agreement'"Crown Castle,
HES argues that the Court of Civil Appeals erred in holding that the no-hire provision in the agreement between HES and Crown Castle was invalid because it imposed a partial restraint of trade in violation of §
Crown Castle argues that this issue is controlled not bySoutheast Cancer, but by Dyson andDefco, with which, it says, the Court of Civil Appeals' opinion is entirely consistent. Crown Castle states that in bothDyson and Defco this Court held that "no-switching" agreements, by which employers agree not to hire each other's employees, are unenforceable under §
After reviewing the conflicting lines of cases, we conclude that the line of cases represented by Tomlinson andSoutheast Cancer, holding that a partial4 restraint of *423
trade is not void under §
Because we hold that the line of cases culminating inSoutheast Cancer is the better reasoned, to the extent that Dyson, Defco, and Sevier conflict with this opinion, they are hereby overruled. We acknowledge that HES did not ground its petition for a writ of certiorari on Rule 39(a)(1)(E), Ala. R.App. P., by seeking to have overruled the controlling precedent relied upon by the Court of Civil Appeals. Nevertheless, because Dyson, Defco, and Sevier have been sub silentio overruled by SoutheastCancer, we need not require a specific request to overrule the conflicting line of precedent.
REVERSED AND REMANDED.*
NABERS, C.J., and SEE, HARWOOD, WOODALL, STUART, SMITH, and BOLIN, JJ., concur.
"(a) Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is to that extent void.
"(b) . . . [O]ne who is employed as an agent, servant or employee may agree with his employer to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a specified county, city, or part thereof so long as the buyer, or any person deriving title to the good will from him, or employer carries on a like business therein."
(Emphasis added.)
