Orkin Exterminating Co. v. Pelfrey

227 S.E.2d 251, 237 Ga. 284, 1976 Ga. LEXIS 1233

• Court: Supreme Court of Georgia
• Decided: July 9, 1976
• Docket: 31151
• Status: Published

Opinions

Undercofler, Presiding Justice.

Ronald L. Pelfrey entered into an employment contract with Orkin Exterminating Company, Inc., effective September 16, 1971, as a serviceman-salesman for the territory composed of the cities of Chamblée, Atlanta, Sandy Springs, East Point, Decatur, Conyers, Lawrenceville, Covington, Jonesboro, McDonough, Norcross and Palmetto, and a radius of 10 miles from the boundaries of the cities. The contract provided that for a period of two years immediately following the termination of the contract the. employee would not solicit business in this area. The contract also provided: "The Employee recognizes and agrees with the Company that in this contract between the Company and the Employee, the Company has the right, at any time, for reasons sufficient to the company, to change the territory assigned to the Employee, resulting in the Employee being changed from the assigned territory to an entirely different territory, and in the event of such change, that the conditions, terms and provisions of this agreement shall pertain and apply in every particular to any territory in which the Employee is assigned and has worked for the Company during any part of the twelve (12) month period next preceeding the termination of this agreement for any reason whatsoever. The Employee does expressly understand and agree that in the event of a change of territory to which he may be assigned by the Company, his responsibilities and obligations as to each and every covenant as set forth in Paragraph 8 above shall pertain and apply in every particular ... to any territory to which the Employee is assigned and has worked for the Company during any part of the twelve (12) month period next preceeding the termination of this agreement for any reason whatsoever.”

The evidence shows that the employee was transferred by the company to Florida on May 15, 1974, for eight weeks and then was transferred hack to the Decatur Branch of the Company, where he remained until March 31, 1975, when he resigned. He became an employee and owner of a competing company in the prohibited territory.

The trial court restrained the employee from competing with the employer for a period of two years from May 15, 1974 (the date he was transferred to Florida). The appeal is from this judgment. Held:

Georgia law provides that contracts in restraint of trade or tending to lessen competition are against public policy and therefore, void. Code § 20-504; Ga. Constitution, Art. IV, Sec. IV, Par. I (Code Ann. § 2-2701).

Covenants against competition contained in employment contracts are considered in partial restraint of trade and are to be tolerated only if strictly limited in time and territorial effect and otherwise reasonable considering the business interest of the employer sought to be protected and the effect on the employee. Orkin Exterminating Co. v. Dewberry, 204 Ga. 794 (51 SE2d 669) (1949); Rakestraw v. Lanier, 104 Ga. 188 (30 SE 735, 69 ASR 154) (1898). "Whether the restraints imposed by an employment contract are reasonable is a question of law for determination by the court.” Taylor Freezer Sales Co. v. Sweden Freezer Eastern Corp., 244 Ga. 160, 162 (160 SE2d 356) (1968).

1. In our opinion the provisions of an employment contract which allow the employer to assign the employee to any territory it desires with the restrictive covenants following the employee is too indefinite to be enforced. "Such a contract is overly broad, and the result is that it is not enforceable in even the smallest area specified, though that smaller area would be a legitimate and enforceable restricted area standing alone.” Wulfhorst v. Hudgins & Co., 231 Ga. 170, 172 (200 SE2d 743) (1973); Rita Personnel Services v. Kot, 229 Ga. 314 (191 SE2d 79) (1972).

2. In Division 1 we have held the contract here is void. However, since two years from May 15, 1974, have expired the question relating to the injunction is now moot. Therefore, the trial court’s judgment will not be disturbed.

Argued June 15, 1976 Decided July 9, 1976 Rehearing denied July 20, 1976. Richard P. Decker, for appellant. Bailey & Bohannon, Clifton O. Bailey, for appellee.

Judgment affirmed.

All the Justices concur, except Jordan, J., who concurs in the judgment only, and Hill, J., who concurs specially.