Whelan Security Co. v. Kennebrew

379 S.W.3d 835, 34 I.E.R. Cas. (BNA) 408, 2012 WL 3627773, 2012 Mo. LEXIS 167
CourtSupreme Court of Missouri
DecidedAugust 14, 2012
DocketNo. SC 92291
StatusPublished
Cited by54 cases

This text of 379 S.W.3d 835 (Whelan Security Co. v. Kennebrew) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whelan Security Co. v. Kennebrew, 379 S.W.3d 835, 34 I.E.R. Cas. (BNA) 408, 2012 WL 3627773, 2012 Mo. LEXIS 167 (Mo. 2012).

Opinion

PATRICIA BRECKENRIDGE, Judge.

Whelan Security Company appeals a trial court’s grant of summary judgment in favor of Charles Kennebrew, Sr., and W. Landon Morgan on its action to enforce the non-compete agreements it had with Mr. Kennebrew and Mr. Morgan. On appeal, Whelan claims that the trial court erred in concluding that the non-competition and non-solicitation clauses were invalid as overbroad and unreasonable as to time and space. This Court granted transfer after opinion by the court of appeals. Mo. Const, art. V, sec. 10. This Court determines that the non-compete agreements were unreasonable as written but modifies the terms of the agreements to give effect to the intent of the parties in entering the non-compete agreement. The case is remanded for determination of genuine issues of material fact.

Factual and Procedural History

Whelan is a Missouri corporation that provides security guard services nationwide. It has 38 branches in 23 states. In December 2006, Whelan executed an employment agreement with Mr. Morgan to employ him as a branch manager for its Nashville, Tennessee, office. As a branch manager, Mr. Morgan was responsible for handling operations, sales, and marketing, which required him to meet with clients and gave him access to client records and employee files. In November 2007, Whe-lan also executed an employment contract with Mr. Kennebrew. Whelan hired Mr. Kennebrew in part because of his reputation in the security business in Houston, Texas, and assigned him to work as the director of quality assurance for Whelan’s Dallas, Texas, office.1 Mr. Kennebrew’s duties included managing the operations, clients, and customers of the office. With his position, Mr. Kennebrew had access to employee and financial records of the company. He was in contact with Whelan’s customers in various parts of Texas, but the parties dispute whether Mr. Kenne-brew provided services for Whelan in Houston. Both Mr. Kennebrew’s and Mr. Morgan’s employment contracts contained non-competition and employee non-solicitation clauses.

The non-competition and employee non-solicitation clauses in Mr. Kennebrew’s employment contract stated:

During the term of this Agreement, and for a period of two (2) years thereafter, whether the termination of this Agreement is initiated by EMPLOYER or EMPLOYEE, EMPLOYEE shall not, without the prior written consent of EMPLOYER, in any manner, directly or indirectly, either as an employee, employer, lender, owner, technical assistant, partner, agent, principal, broker, advisor, consultant, manager, shareholder, director, or officer, for himself or in behalf of any person, firm, partnership, entity, or corporation, or by any agent or employee:
(a) Solicit, take away or attempt to take away any customers of EMPLOYER or the business or patronage of any such customers or prospective customer(s) whose business was being sought during the last twelve (12) months of EMPLOYEE’S employment; or
[840]*840(b) Solicit, interfere with, employ, or endeavor to employ any employees or agents of EMPLOYER.
(c) Work for a competing business within a fifty (50) mile radius of any location where EMPLOYEE has provided or arranged for EMPLOYER to provide services.
(d) Work for a customer of EMPLOYER or prospective customer(s) whose business was being sought during the last twelve (12) months of EMPLOYEE’S employment, if the work would included providing, or arranging for, services the same as, or similar to, those provided by EMPLOYER.
“Competing business” means any business engaged in providing guard and/or security services the same as, or similar to, those offered by EMPLOYER.

The non-competition and employee non-solicitation clauses in Mr. Morgan’s employment contract were similar, except that Mr. Morgan’s employee non-solicitation clause had a one-year prohibition instead of a two-year prohibition.

Mr. Morgan and Mr. Kennebrew resigned from Whelan in December 2008 and March 2009, respectively, although Mr. Kennebrew continued to work for Whelan at its request until August 2009. Whelan was aware that Mr. Kennebrew intended to start his own security company, called Elite Protective Services LLC, but Whelan did not believe that Elite would be in direct competition with its services. Mr. Morgan joined Elite a short time after it started.

In November and December 2009, Mr. Kennebrew solicited the business of Park Square Condominiums, a client of Whelan in Houston. On behalf of Elite, Mr. Ken-nebrew signed a contract to provide security services for Park Square on December 17, 2009. The next day, Mr. Morgan provided employment packets for Elite to Whelan’s employees at Park Square. Park Square terminated its relationship with Whelan in January 2010, and Elite retained several of Whelan’s employees at Park Square.

Whelan brought action seeking to enjoin Mr. Kennebrew and Mr. Morgan from violating the terms of their employment contracts. It also sought damages for breach of contract, unjust enrichment, and civil conspiracy. After a hearing, the trial court denied Whelan’s request for a preliminary injunction. Whelan filed a motion to modify the agreement, followed by each party filing motions for summary judgment. The trial court granted summary judgment in favor of Mr. Kennebrew and Mr. Morgan and overruled Whelan’s alternative motions for summary judgment or modification of the agreement. The trial court stated that “the employment agreements at issue in this case, as written, are overbroad, not reasonable as to time and space and therefore are not valid.” Whe-lan appeals the trial court’s grant of summary judgment.

On appeal, Whelan asserts five points of error. It claims that the trial court erred in granting summary judgment for Mr. Kennebrew and Mr. Morgan because: (1) the non-competition and non-solicitation clauses are not overly broad and are reasonably limited as to time and geographic scope under Missouri law; (2) Mr. Kenne-brew violated a reasonable covenant not to compete by operating a competing company within 50 miles of Whelan’s office in Houston and within two years of his resignation; (3) Mr. Kennebrew and Mr. Morgan violated a reasonable covenant not to solicit Whelan’s customers by soliciting Park Square within two years of their resignations; (4) Mr. Kennebrew and Mr. Morgan violated a reasonable covenant not to solicit Whelan’s employees by soliciting its employees at Park Square; and (5) the trial court failed to modify the agreement [841]*841to restrict Mr. Kennebrew from competing with Whelan in a 50-mile radius of Houston.

Standard of Review

Summary judgment is appropriate only when the moving party demonstrates that “there is no genuine dispute as to the facts” and that “the facts as admitted show a legal right to judgment for the movant.” ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 380 (Mo. banc 1993). The movant bears the burden of establishing both a legal right to judgment and the absence of any genuine issue of material fact required to support the claimed right to judgment. Id. at 378. The propriety of summary judgment is purely an issue of law, and this Court’s review is essentially de novo. Id. at 376.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
379 S.W.3d 835, 34 I.E.R. Cas. (BNA) 408, 2012 WL 3627773, 2012 Mo. LEXIS 167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whelan-security-co-v-kennebrew-mo-2012.