Opinion
22413.
ARGUED MARCH 10, 1964.
DECIDED APRIL 9, 1964. REHEARING DENIED APRIL 21, 1964.
Petition for injunction. Fulton Superior Court. Before Judge Pharr.
Fine Rolader, D. W. Rolader, Joseph J. Fine, A. J. Block, Jr., for plaintiff in error.
Peek Blackburn, Peek, Whaley Blackburn, J. Corbett Peek, Jr., Glenville Haldi, contra.
The restriction in the employment contract in the present case against the defendant working or obtaining employment in any capacity with a competitor of the petitioner was not reasonably necessary for the protection of the petitioner, and the restrictive covenants are void and unenforceable.
ARGUED MARCH 10, 1964 — DECIDED APRIL 9, 1964 — REHEARING DENIED APRIL 21, 1964.
Stein Steel Supply Company sought to enjoin Doyle E. Tucker, a former employee, from violating restrictive covenants contained in a contract of employment between the parties. The trial judge sustained a general demurrer to the petition and dissolved a temporary restraining order, and the exception is to this judgment.
The employment agreement recited that the petitioner "is engaged in the business of selling and furnishing plumbing fixtures, plumbing supplies, bar joists, structural steel, steel building products, building supplies, and designing, fabricating and manufacturing certain steel products, and has established a valuable and extensive trade in same in the Counties of Fulton, DeKalb, Cobb, Douglas, Clayton, Fayette, Henry and Gwinnett, State of Georgia, ..."
The three paragraphs containing the restrictive covenants are as follows:
"(5) Said Employee hereby further expressly covenants and agrees, and which covenant and agreement is of the essence of this contract, that at no time during the term of his employment, or for a period of twenty-four (24) months immediately following the termination of his employment (regardless of whether said termination of this employment be voluntary), will be for himself, or on behalf of any other person, persons, partnership or corporation, call upon any customer of said Company for the purpose of selling any products as commonly sold by the Company, nor will he in any way, directly or indirectly, for himself or on behalf of or in conjunction with any other person, persons, firm, partnership, company or corporation, solicit, divert or take away or attempt to take away any such customers of said Company during the term of this employment, or any renewal employment with the Company, or for twenty-four (24) months immediately following the termination of his employment.
"(6) Said Employee further agrees that at no time during the term of this employment, or for twenty-four (24) months immediately following the termination of this employment (regardless of whether such termination is voluntary or involuntary), will he for himself, or on behalf of any other person, persons, partnership, company or corporation, engage in the plumbing supply business or any business of similar purport as that engaged in by Company, either as an employee or officer of any person, partnership, company or corporation in the Counties of Fulton, DeKalb, Cobb, Douglas, Clayton, Fayette, Henry or Gwinnett, State of Georgia, nor will he, directly or indirectly, for himself, or on behalf of or in conjunction with any person, persons, partnership, company or corporation, purchase or sell steel or fabricated steel products similar to the products bought and sold by the Company, nor solicit or attempt to solicit the business of any person, persons, firm, company or corporation within said territory above set out and within said time for the purpose of selling any products or merchandise as sold by the Company, nor will said Employee disclose to any person whomsoever any of the secrets, methods or systems used by the Company in and about its business.
"(7) Said Employee further covenants and agrees that he will not, during the term of this employment, nor for twenty-four (24) months immediately following the termination of this employment (regardless of whether said termination is voluntary or involuntary), service accounts, customers or work or obtain employment with any other person, firm, company, partnership or corporation, either directly or indirectly or in conjunction with any other person, firm, company, partnership or corporation engaged in the fabrication of structural steel, steel bar joists, and certain steel products or the selling of plumbing supplies, plumbing fixtures, bar joists, structural steel, steel building products as now being handled or as sold by said Company, within the counties of Fulton, DeKalb, Cobb, Douglas, Clayton, Fayette, Henry or Gwinnett, State of Georgia."
Whether the restraints imposed by a contract in partial restraint of trade are reasonable presents a question of law for determination by the court, and not one of fact for the jury. Kutash v. Gluckman, 193 Ga. 805 (2), 807 ( 20 S.E.2d 128). "In determining the reasonableness of a restrictive covenant, greater latitude is allowed in those covenants relating to the sale of a business, or dissolution of a partnership, than in those covenants ancillary to an employment contract." Orkin Exterminating Co., Inc. of South Georgia v. Dewberry, 204 Ga. 794, 803 ( 51 S.E.2d 669).
In Dixie Bearings, Inc. v. Walker, 219 Ga. 353 ( 133 S.E.2d 338), a restrictive covenant in an employment contract was held to be void and unenforceable "because the agreement is indefinite and vague as to the nature, kind and character of activity the employee would not engage in and is unreasonable because of the absolute prohibition of the employee working in any capacity for a competitor in positions unrelated to trade secrets or customers." In discussing the latter basis for holding the covenant void, this court (at page 357) stated: "Under the ancillary employment contract the defendant was prohibited for one year following the termination of his employment from engaging as owner, partner, or otherwise or becoming associated as an officer, employee, agent or otherwise in any business competitive with the plaintiff or its subsidiaries within a radius of 50 miles of any city in which he had worked as an employee of the plaintiff or any of its subsidiaries during a period of five years preceding termination of employment. Under these provisions the defendant would be prevented from accepting employment as a truck driver, night watchman or any other position which might be totally unrelated to trade secrets or sales to customers."
In paragraph 7 of the employment contract in the present case the defendant agreed that for a period of 24 months immediately following the termination of his employment he would not "work or obtain employment with any other person, firm, company, partnership or corporation, either directly or indirectly or in conjunction with any other person, firm, company, partnership or corporation engaged in the fabrication of structural steel, steel bar joists, and certain products or the selling of plumbing supplies, plumbing fixtures, bar joists, structural steel, steel building products as now being handled or as sold by said Company," within eight named counties.
The restrictions imposed on the defendant by this language of the contract "were larger than were necessary for the protection of the promisee." Rakestraw v. Lanier, 104 Ga. 188, 202 ( 30 S.E. 735, 69 ASR 154). The trial judge properly sustained the general demurrer to the petition and dissolved the temporary restraining order.
Judgment affirmed. All the Justices concur, except Duckworth, C. J., Candler and Mobley, JJ., who dissent.
I do not agree that the restriction in the employment contract against the defendant's working or obtaining employment in any capacity with a competitor of petitioner was not reasonably necessary for the protection of the petitioner and that the restrictive covenant is for that reason void and unenforceable. An employee who had obtained trade secrets or sales information from his employer could disclose such to his next employer, while serving as a truck driver, night watchman, or in any other position, the same as if he were holding a position similar to that held with the former employer. In my opinion the nature of employment is not the controlling factor, since he could as well make use of sales information, trade secrets, etc., of his former employer in one position as in another. I must admit that this court in Dixie Bearings, Inc. v. Walker, 219 Ga. 353 ( 133 S.E.2d 338), held contrary to this, and I concurred in that opinion. However, there was a special concurrence by Chief Justice Duckworth, and the judgment there rendered would, therefore, not be binding.
Chief Justice Duckworth and Mr. Justice Candler authorize me to state that they concur in this dissent.