International Paper Co. v. Brooks

63 Va. Cir. 494, 2003 Va. Cir. LEXIS 248
CourtRoanoke County Circuit Court
DecidedDecember 23, 2003
DocketCase No. CL03-497
StatusPublished
Cited by3 cases

This text of 63 Va. Cir. 494 (International Paper Co. v. Brooks) is published on Counsel Stack Legal Research, covering Roanoke County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Paper Co. v. Brooks, 63 Va. Cir. 494, 2003 Va. Cir. LEXIS 248 (Va. Super. Ct. 2003).

Opinion

By Judge Charles N. Dorsey

This matter comes on upon the demurrer of the defendant.

Facts

John Ashley Brooks worked as Sales Manager for International Paper Co.’s (“PC”) Roanoke office from May 1998 through 1999, when he continued to work for IPC as a sales representative. He worked as a sales representative until he terminated his employment on January 6,2003. Bill of Compl. at ¶ 2. In connection with his employment with PC, Mr. Brooks executed aNon-Compete Agreement that provides:

24. Anti-Solicitation. Employee agrees, in consideration of the mutual covenants set forth herein, that he/she will agree not to solicit' other employees of the Employer to join Employee (new employer) in a newly formed business, in direct competition with Employer.

Id. at ¶ 4.

Upon leaving his employment with PC, Mr. Brooks began working for its competitor, Unisource. IPC alleges that Mr. Brooks then began to solicit PC’s sales employees to leave IPC and work for Unisource. These individuals are alleged to have met on several occasions to discuss their leaving PC en masse and taking then customer accounts to Unisource. On June 6, 2003, Mr. [495]*495Gilliam resigned, and, on June 9,2003, two other IPC employees resigned. All three began working for Unisource. In the following week, all three contacted sales associates at IPC to offer employment with Unisource. Id. at ¶¶ 5-14. Mr. Brooks is alleged to have told a mutual acquaintance “have Rob call me because legally I cannot call him.” Id. at ¶ 15.

On June 26,2003, IPC filed its Bill of Complaint against Mr. Brooks. In it, IPC asserts four claims: Count I alleges Breach of the anti-solicitation portion of the Non-Compete Agreement; Count II alleges Tortious Interference with Contract; and Count III and IV allege Conspiracy to Injure Business and Common Law Conspiracy.

Analysis

When ruling on a demurrer, the Court must determine whether the factual allegations in the bill of complaint are sufficient to state a cause of action or facts upon which relief can be granted. Va. Code § 8.01-273(A) (2003). The Court is required to consider as true all material facts that are properly pleaded or implied and all reasonable inferences that can be drawn from these facts. Riverview Farm Assocs. v. Board of Supervisors, 259 Va. 419, 427, 528 S.E.2d 99, 103 (2000). “A demurrer does not test matters of proof and, unlike a motion for summary judgment, does not involve evaluating and deciding the merits of a claim; it tests only the sufficiency of factual allegations to determine whether the pleading states a cause of action.” Welding, Inc. v. Bland County Serv. Auth., 261 Va. 216, 227-28, 541 S.E.2d. 909, 914 (2001). In making this determination, the Court may examine both the substantive allegations contained in the complaint and any accompanying exhibits. CaterCorp, Inc. v. Catering Concepts, Inc., 246 Va. 22, 24, 431 S.E.2d 277, 279 (1993). As long as a claim contains sufficient allegations of material fact to inform the respondent of its true nature and character, it will withstand demurrer. Id. The demurrer standard does not, however, admit the correctness of the conclusions of law found in the challenged pleading. Fuste v. Riverside Healthcare Assn., 265 Va. 127, 131, 575 S.E.2d 858, 861 (2003).

A. Breach of Anti-Solicitation Clause

In support of its claim for breach, IPC has produced the Anti-Solicitation clause of a Non-Compete Agreement executed between IPC and Mr. Brooks, which is reproduced above. Mr. Brooks contends that the clause is invalid on its face and unenforceable, or, alternatively, if valid, inapplicable.

Assuming the employee anti-solicitation clause is severable from the other non-compete provisions of the agreement, such a clause still remains a type of [496]*496restrictive covenant between employer and employee. The nature of the clause is that the employee, upon leaving his employment, agrees to refrain from soliciting certain people for hire who are not parties to the contract. The Supreme Court has held that a similar agreement to forgo the ability to hire non-parties to the contract “is a contract in restraint of trade and will be held void as against public policy if it is unreasonable as between parties or is injurious to the public.” Therapy Serv., Inc. v. Crystal City Nursing Ctr., Inc., 239 Va. 385, 388, 389 S.E.2d 710, 711 (1990). Although an agreement not to solicit other employees for hire is slightly narrower than an agreement not to hire those employees, it is still a form of restraint on trade and subject to the stricter standards adopted by the Supreme Court. See Anteon Corp. v. BTG, Inc., 62 Va. Cir. 41, 2003 Va. Cir. LEXIS 85, (Fairfax 2003) (“a non-solicitation clause must be narrowly tailored, as “covenants in restraint of trade are not favored” and are to be “strictly construed.”).

“Covenants in restraint of trade are not favored, will be strictly construed, and, in the event of an ambiguity, will be construed in favor of the employee.” Modern Environments, Inc. v. Stinnett, 263 Va. 491, 493, 561 S.E.2d 694, 695 (2002). Further, the employer has the burden to show that the restraint is reasonable. It must be “no greater than necessary to protect a legitimate business interest... not unduly harsh or oppressive in curtailing an employee’s ability to earn a livelihood, and ... reasonable in light of sound public policy.” Id. (citing Roanoke Engineering Sales Co. v. Rosenbaum, 223 Va. 548, 552, 290 S.E.2d 882, 884 (1982)). Central to this reasonableness inquiry are limits on duration, geographic area, and scope of the restrictions. Simmons v. Miller, 261 Va. 561, 581, 544 S.E.2d 666, 678 (2001).

IPC argues, as it must, that the anti-solicitation clause “reasonably protects International Paper’s legitimate business interest in preventing former employees from cherry-picking its most promising and highly trained employees.” frit’l Paper’s Mem. in Opp. to Dem. at 11. But, although the scope of the clause is more limited than a general non-compete provision, its restrictions are not narrowly tailored to accomplish its purpose. The clause contains no limits in duration or geography. IPC’s legitimate interest in keeping its employees would not ordinarily justify a clause restricting a former employee from soliciting any IPC employee in perpetuity and worldwide.

The fact that critical limitations concerning duration and geography are missing is significant. Their absence supports the conclusion that the specific language used in the anti-solicitation clause, “employee agrees ... that he/she will agree

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Cite This Page — Counsel Stack

Bluebook (online)
63 Va. Cir. 494, 2003 Va. Cir. LEXIS 248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-paper-co-v-brooks-vaccroanokecty-2003.