Sanborn Manufacturing Co. v. Currie

500 N.W.2d 161, 8 I.E.R. Cas. (BNA) 1012, 1993 Minn. App. LEXIS 584, 1993 WL 172421
CourtCourt of Appeals of Minnesota
DecidedMay 25, 1993
DocketC1-93-301
StatusPublished
Cited by22 cases

This text of 500 N.W.2d 161 (Sanborn Manufacturing Co. v. Currie) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sanborn Manufacturing Co. v. Currie, 500 N.W.2d 161, 8 I.E.R. Cas. (BNA) 1012, 1993 Minn. App. LEXIS 584, 1993 WL 172421 (Mich. Ct. App. 1993).

Opinion

OPINION

CRIPPEN, Judge.

Appellant Charles Currie challenges the trial court's temporary injunction prohibiting him from breaching a noncompetition agreement. Appellant argues that respondent Sanborn Manufacturing Company failed to show irreparable harm and a likelihood of success on the merits, and thus it was not entitled to a temporary injunction. We agree that Sanborn failed to show any likelihood of success on the merits and we reverse.

FACTS

Appellant Charles Currie worked as a marketing manager for respondent San-born Manufacturing Company for more than four years. Before working for San-born, Currie had been employed in a similar capacity at Ingersoll-Rand in North Carolina. Currie stated that he and Sanborn reached an agreement on the terms of his employment in April 1988, and at that time there was no discussion of a noncompetition agreement. Sanborn has not disputed this statement. Sanborn sent Currie a written offer of employment dated May 2, 1988, which does not mention a noncompetition agreement. The written offer was for a marketing manager position to begin May 24, 1988. The compensation package included $43,000 in base pay, a bonus program, relocation expenses, a 401K plan, two weeks of vacation, and Sanborn’s current family health, dental and disability program. Currie accepted the offer, quit his job with Ingersoll-Rand and signed a purchase agreement to sell his home.

On May 23,1988, Currie flew to Minnesota to fill out employment forms. At that *163 time he was presented with a noncompetition agreement dated May 24, 1988, which stated that consideration for the agreement included Currie’s “employment, continued employment, promotion, increase in compensation, and other benefits now or hereafter paid or made available.” It was accompanied by a cover sheet, which stated that as consideration for Currie’s execution of the agreement, he would receive the compensation package he had already accepted: $43,000 in base pay, the profit-sharing, pension, medical and hospitalization plan, and two weeks of vacation. Cur-rie expressed concern about signing the agreement, noting that he had never been asked to sign such an agreement before. He decided to sign it, however, because he had already quit his job and sold his home, and thus he “didn’t really have any choices at the time.”

Currie stated that he had been recruited by Sanborn’s vice president of marketing, Tony Everette, who had previously worked at Ingersoll-Rand. During negotiations, Currie was told that as Sanborn’s marketing manager he would do essentially the same things that he had done as a technical product manager at Ingersoll-Rand, including product line management, new product definition and introduction, market planning, pricing, and product presentation. Everette stated that “in his capacity as Marketing Manager,” Currie obtained confidential information about Sanborn’s product specifications, pricing and cost structure, merchandising and packaging decisions, marketing and strategic planning decisions, research and development efforts, and its customer base.

Currie was never promoted at Sanborn. However, Everette states that Currie’s advancement in the company was evident because he was given supervisory responsibilities and his income increased by $11,600. Sanborn has not refuted Currie’s statement that he received excellent performance evaluations at Sanborn.

In 1988, Currie received an offer from Quincy Compression to become its National Accounts Manager, a position involving marketing and selling Quincy’s products. Quincy manufactures and sells air compressors primarily to the industrial and commercial markets. Sanborn manufactures and sells air compressors primarily to the consumer market. When Currie gave notice to Sanborn, he was informed that his acceptance of the position at Quincy constituted a breach of the noncompetition agreement. When he decided to take the position anyway, Sanborn obtained a preliminary injunction. This appeal followed.

ISSUE

Was it error to issue a temporary injunction in the circumstances of this case respecting whether it was likely that Sanborn would prevail on the merits?

ANALYSIS

A trial court may grant a temporary injunction if the party seeking it establishes that there is no adequate remedy at law and that denial of the injunction will result in irreparable injury. Cherne Indus., Inc. v. Grounds & Assocs., Inc., 278 N.W.2d 81, 92 (Minn.1979). The purpose of a temporary injunction is to preserve the status quo until a trial can be held on the merits. Pickerign v. Pasco Mktg., Inc., 303 Minn. 442, 446, 228 N.W.2d 562, 565 (1975). When reviewing a trial court’s decision on a preliminary injunction, we are to consider five factors: (1) the relationship of the parties; (2) the relative harm to the parties if the injunction is or is not granted; (3) the likelihood of success on the merits; (4) public policies expressed in statutes; and (5) the administrative burdens in supervising and enforcing the decree. Dahlberg Bros., Inc. v. Ford Motor Co., 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (1965). This court will affirm the trial court’s decision absent a clear abuse of discretion. Id. at 274, 137 N.W.2d at 321; Cherne, 278 N.W.2d at 91. In this case only two of the Dahlberg factors are in dispute: the harm to the parties and the likelihood of success on the merits. Because we view the latter consideration as dispositive, our opinion is confined to that subject.

Appellant argues that the trial court erred in granting the injunction because *164 Sanborn is unlikely to prevail on the merits. He contends the noncompetition agreement is not supported by independent consideration and is overly broad. Because the noncompetition agreement must fail for lack of consideration, we need not address the overbreadth issue.

Noncompetition agreements are not favored at law because they partially restrain trade. See National Recruiters, Inc. v. Cashman, 323 N.W.2d 736, 740 (Minn.1982). These agreements are invalid unless bargained for and supported by adequate consideration. Id. Where a noncom-petition agreement is not ancillary to an employment contract, it must be supported by independent consideration to be enforceable. Id. This requirement reflects the fact that employers and employees have unequal bargaining power. When the employer fails to inform prospective employees of noncompetition agreements until after they have accepted jobs, the employer “takes undue advantage of the inequality between the parties.” Id. at 741.

Sanborn has not refuted the fact that Currie accepted the offer of employment before Sanborn asked him to sign the noncompetition agreement. Sanborn argues that its only obligation was to execute the noncompetition agreement before Cur-rie began work. That argument is not supported by law.

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Bluebook (online)
500 N.W.2d 161, 8 I.E.R. Cas. (BNA) 1012, 1993 Minn. App. LEXIS 584, 1993 WL 172421, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sanborn-manufacturing-co-v-currie-minnctapp-1993.