Inland Rubber Corporation v. Helman

237 So. 2d 291, 1970 Trade Cas. (CCH) 73,264, 1970 Fla. App. LEXIS 6163
CourtDistrict Court of Appeal of Florida
DecidedJuly 7, 1970
DocketL-479
StatusPublished
Cited by14 cases

This text of 237 So. 2d 291 (Inland Rubber Corporation v. Helman) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Inland Rubber Corporation v. Helman, 237 So. 2d 291, 1970 Trade Cas. (CCH) 73,264, 1970 Fla. App. LEXIS 6163 (Fla. Ct. App. 1970).

Opinion

237 So.2d 291 (1970)

INLAND RUBBER CORPORATION, Appellant,
v.
Leonard HELMAN, Appellee.

No. L-479.

District Court of Appeal of Florida, First District.

July 7, 1970.

*292 George L. Hudspeth, of Mahoney, Hadlow, Chambers & Adams, Jacksonville, for appellant.

E. Charles Oberdorfer, of Reinstine, Reinstine & Panken, Jacksonville, for appellee.

SPECTOR, Judge.

Appellant, the former employer of appellee, seeks reversal of an adverse summary final judgment in a declaratory judgment action brought by the latter holding that certain provisions of an employment contract between the two parties were invalid.

By his complaint, appellee alleged that on January 1, 1963, he entered into an employment agreement with appellant whereby he was employed as sales manager of Fleet Tire Mart, National Fleet Service, a division of appellant corporation. The said agreement contained a clause by the terms of which appellee agreed to abstain and forebear while so employed and for a period of two years thereafter from making known to any person or firm any confidential information from the files and records of the appellant employer. Further, it provides that during the term of employment and two years thereafter the appellee-employee would not own, operate or control or be a director, trustee, partner, officer, employee or consultant of any person, firm or corporation which is in the business of the manufacture or sale of tires or tubes and which solicits the sale of tires or tubes or sells the same to any person, firm or corporation which has been a customer of the appellant employer during the two year period preceding the termination of the employment.

The complaint concluded with the contention that the employment agreement is violative of the laws of this State in that the same is an agreement in restraint of *293 trade and restrains the plaintiff-appellee from exercising a lawful trade or business in violation of Section 542.12, Florida Statutes, F.S.A.

Appellant filed its anwer denying generally the contentions of appellee and further counterclaimed for the issuance of an injunctive order restraining appellee from violating any of the provisions of the employment contract described hereinabove and grounded such prayer upon the contention that the subject contract was valid under the provisions of Section 542.12(2), Florida Statutes, F.S.A.

Section 542.12(1) (2), Florida Statutes, F.S.A., is as follows:

"(1) Every contract by which anyone is restrained from exercising a lawful profession, trade or business of any kind, otherwise than is provided by subsections (2) and (3) hereof, is to that extent void.
"(2) One who sells the good will of a business, or any shareholder of a corporation selling or otherwise disposing of all of his shares in said corporation, may agree with the buyer, and one who is employed as an agent 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 reasonably limited time and area, so long as the buyer or any person deriving title to the good will from him, and so long as such employer continues to carry on a like business therein. Said agreements may, in the discretion of a court of competent jurisdiction be enforced by injunction." (Emphasis supplied)

The trial court held that the contract provision related above was unenforceable in that the same is in violation of the cited statute; and, therefore, the agreement is void and not binding on appellee Helman. In its final judgment, the court stated as the basis for its ruling that the contract provision was violative of the statute because of the absence of any designated territorial limitation in the contract as to which the restriction would be operative. In support of the trial court's ruling in his favor, appellee cites Capelouto v. Orkin Exterminating Company of Florida, Inc., 183 So.2d 532 (Fla. 1966); McQuown v. Lakeland Window Cleaning Co., 136 So.2d 370 (Fla.App. 1962), and like cases. We have no quarrel with such cases and the principles of law set forth in them. However, there is a significant factual distinction between the case at bar and the cases appellee relies upon.

In each of those cases, as well as the case authorities upon which they were decided, the contract that had been entered into between the employer and the employee contained the latter's agreement not to compete with the former by carrying on or engaging in a similar business as that being carried on by the employer. However, the contract entered into by the parties in this case did not contain a clause prohibiting the employee from engaging in a competing business. The only prohibition or restraint agreed to by the parties related to the use of the appellant employer's active customer lists. Appellee was not precluded by the contract from establishing a tire store across the street from appellant's place of business. The only protection contracted for by appellant and agreed to by the appellee related to the customer lists and not business competition itself.

None of the cases cited in the briefs nor discovered by our own research involves the application of Section 542.12, Florida Statutes, F.S.A., to an agreement between employer and employee relating only to customer lists. Most of the cases applying the statute center upon the reasonableness of the time and area limitation provided by the contract upon the employee's agreement not to engage in a competing business. No case has been cited or found which squarely holds, as did the trial court here, that the absence of a territorial limitation, vel non, renders void an agreement not to use the employer's customer list as *294 opposed to an agreement not to engage in a competing business. On the contrary, appellant argues that in Fountain v. Hudson Cush-N-Foam Corp., 122 So.2d 232 (Fla.App. 1960), the court enforced an agreement by an employee which had no territorial limitation not to reveal certain trade secrets relating to manufacturing processes gained during his employment by enjoining the employee not only from making the prohibited revelations but also enjoined him from being employed by a competing manufacturer on the assumption that Fountain's knowledge of his former employer's trade secrets would eventually result in their disclosure during his employment with the competitor.

In Fountain, supra, the object of the agreement between the employer and employee seemed to be the preservation of trade secrets or confidential information gained by the employee during the term of his employment.

In the case at bar, a similar intent appears to be the object of the contract between appellant and appellee. While the contract in question has many of the attributes of the usual "noncompete agreement", close inspection of the contract indicates that the parties intended the so-called "noncompete agreement" to relate only to the use by the employee of the customer lists of the employer. In Renpak, Inc. v. Oppenheimer, 104 So.2d 642 (Fla. App. 1958), the court had before it a contention by the appellant that it was entitled to enjoin the appellees, one of whom was a former officer and managing employee, from engaging in a business in competition with the former employer as well as to enjoin the use of the latter's customer lists.

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Bluebook (online)
237 So. 2d 291, 1970 Trade Cas. (CCH) 73,264, 1970 Fla. App. LEXIS 6163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/inland-rubber-corporation-v-helman-fladistctapp-1970.