James C. Greene Co. v. Arnold

HiggiNS, J. The distinction between the contract now before us and the contract reviewed in Greene Co. v. Kelley, 261 N.C. 166, 134 S.E. 2d 166, is this: Kelley’s contract was without consideration. Arnold’s contract was based on a valid consideration. As in Kelley, “The defendant admitted he signed a paper writing containing a provision that he would not engage in competition in the manner alleged. He admitted he had not observed these restrictions. The admission made out a prima facie case. . . .” When either party appeals to the courts, each case must be decided on its own facts. “The Courts generally have held that restrictive covenants not to engage in competitive employment are in partial restraint of trade. And hence to be enforced they must be (1) in writing; (2) supported by valuable consideration; and (3) reasonable as to terms, time, and territory. Failure in either requirement is fatal.” (Citing cases, to which may be added Noe v. McDevitt, 228 N.C. 242, 45 S.E. 2d 121; Comfort Springs Corp. v. Burroughs, 217 N.C. 658, 9 S.E. 2d 473). “The general rule with respect to enforceable restrictions is stated in 9 A.L.R. 1468, 'It is clear that if the nature of the employment is such as will bring the employee in personal contact with patrons or customers of the employer, or enable him to acquire valuable information as to the nature and character of the business and the names and requirements of the patrons or customers, enabling him by engaging in a competing business in his own behalf, or for another, to take advantage of such knowledge of or acquaintance with the patrons and customers of his former employer, and thereby gain an unfair advantage, equity will interpose in behalf of the employer and restrain the breach . . . providing the covenant does not offend against the rule that as to time ... or as to the territory it embraces, it shall be no greater than is reasonably necessary to secure the protection of the business or good will of the employer.” Asheville Associates v. Miller, 255 N.C. 400, 121 S.E. 2d 593. [89] After reviewing the record in the light of the cases cited above and those referred to in other cases, we are of the opinion that the covenant not to compete which the parties wrote into and made a part of their written agreement should not be declared void by the Court as being unreasonable as to time or territory, or as unfair to the defendant, or as against public policy. The time fixed — four years — approaches the maximum which this Court is inclined to approve for the type of restriction here involved. The defendant laid the foundation for his success as an adjuster in and around Elizabeth City by virtue of his work in the field while he was plaintiff’s employee. The jury having found the contract was based upon a valid consideration, we think the restrictions are valid and the contract should be enforced. The judgment entered in the Superior Court is Affirmed.