Williamson v. Hess

16 V.I. 284, 1979 V.I. LEXIS 18
CourtSupreme Court of The Virgin Islands
DecidedMay 19, 1979
DocketCivil No. 66-1978
StatusPublished
Cited by2 cases

This text of 16 V.I. 284 (Williamson v. Hess) is published on Counsel Stack Legal Research, covering Supreme Court of The Virgin Islands primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williamson v. Hess, 16 V.I. 284, 1979 V.I. LEXIS 18 (virginislands 1979).

Opinion

HODGE, Presiding Judge

MEMORANDUM OPINION

I.

In this declaratory judgment action plaintiff, the employer, seeks enforcement of a covenant-not-to-compete which was contained in a June 30, 1977, employment contract with defendant, the employee. The defendant asserts that this noncompetition covenant is void and unenforce[288]*288able because, among other things, it is contrary to public policy and is violative of the Virgin Islands Antimonopoly Law. Thus, the question presented is whether the covenant is void or unenforceable. For the reasons discussed in this opinion, the Court declares that the covenant is valid and enforceable.

II.

The following chronology of events leading to the filing of this action constitutes the findings of facts as determined by the Court, based upon the testimony and exhibits of record.

Plaintiff has practiced veterinary medicine in the Virgin Islands since 1965. During this time, he has developed a successful practice with regular clientele and has established internal operating procedures, including administrative and surgical techniques, to properly serve his clients. Substantial goodwill has been generated by his practice and, consequently, he has been able to extend his services to Tortola, British Virgin Islands, on a part-time basis.

In 1974, defendant first came to St. Thomas from New York on vacation. At that time he was employed in New York as a veterinarian performing animal cancer research. It was during this vacation period that the parties first met through a mutual friend, and they subsequently discussed the possible future employment of defendant by plaintiff. Accordingly, on December 5, 1975, they signed their first of two employment agreements. The first agreement1 provided, in part, that defendant would be employed on a trial basis for eighteen months, commencing January 1, 1976, and that upon termination he would not compete with plaintiff for three years in the entire U.S. Virgin Islands.

[289]*289The employment relationship commenced as agreed, but during and at the end of this eighteen-month trial period, plaintiff expressed his dissatisfaction with both the quality and quantity of services rendered by defendant. However, in order to afford defendant another opportunity to correct the deficiencies noted, the parties executed their second contract on June 30, 1977, which they termed “Extended Employment Agreement”.2 In this contract, the parties agreed, in part, that they would renew their employment relationship for another six months; that during this period, if their relationship proved to be compatible, a formal partnership would be formed; and that if they could not work compatibly, the relationship would terminate on January 1, 1978, and defendant would thereafter refrain from competing with plaintiff in the private practice of veterinary medicine for a period of three years on the islands of St. Thomas and St. John only.

Because of their continued incompatibility, the contract expired on January 1, 1978, without extension or a partnership agreement, thereby triggering the commencement of the three-year period of the covenant-not-to-compete in St. Thomas and St. John.

At that time, as now, there were six licensed veterinarians in the Virgin Islands, three of whom practiced privately on St. Thomas. Two additional veterinarians were employed by the V.I. Government. The Court finds that these were and are sufficient, at this time, to meet the community needs for veterinary services on St. Thomas and St. John. Besides, defendant was originally employed by plaintiff, not as an additional veterinarian, but as a substitute for plaintiff who had planned to take an extended period of study leave, which never materialized. Nevertheless, defendant became privy to all of plaintiff’s business [290]*290operations, including clients and client lists, and he had full access to plaintiff’s practice techniques.

Prior to his initial employment with plaintiff, defendant had discussed the first contract with an attorney in New York, who advised him that the three-year covenant-not-to compete would be unenforceable. With that advice in mind, defendant executed the first contract, and later the Extended Employment Agreement, with no apparent intention of complying with that provision. Although the three-year period has not expired, defendant now threatens to establish his own private practice of veterinary medicine on St. Thomas, in direct competition with plaintiff. In addition, since the expiration of the extended contract, defendant has rendered private veterinary services to patients on St. Thomas who were clients of plaintiff’s practice and who had met defendant as an employee of plaintiff. Defendant engaged in these instances of private practice although at the time he was employed as a lab technician with another employer.

Accordingly, plaintiff seeks a declaratory judgment as to the validity and enforceability of the restrictive covenant.

III.

Where a noncompetition covenant is in issue, it is unenforceable unless it is ancillary or incidental to a lawful contract. See, generally, 54 Am. Jur.2d, Monopolies, Restraints of Trade and Unfair Trade Practices, § 514 (1956), and cases cited therein. Thus, the threshold to whether the contract executed by the parties is prohibited by law.

Among other contentions, defendant asserts that the contract is unlawful because it is violative of the Virgin Islands Antimonopoly Law (11 V.I.C. Ch. 29), and that, therefore, the restrictive covenant is unenforceable. I disagree. Nothing in Virgin Islands law prohibits an em[291]*291ployer and employee from executing an employment contract, nor from inserting a covenant-not-to-compete in their employment contract. Indeed, the Virgin Islands antimonopoly law addresses itself to contracts among competitors which restrain trade because of monopolistic or oligarchic practices.

In this case, plaintiff has not conspired nor contracted with other veterinarians to monopolize the field of veterinary medicine. In fact, defendant does not even make such a claim. No evidence whatsoever was offered by defendant to substantiate this contention. Instead, the evidence shows that the field is wide open for any veterinarian, who qualifies under the provisions of 27 V.I.C. Ch. 3, to enter into such private practice throughout the Virgin Islands. Defendant, in substance, is urging the Court to hold that his exclusion from private practice on St. Thomas and St. John during the restrictive period, and nothing more, constitutes a monopolistic practice by plaintiff which violates the antimonopoly law, vitiates the employment contract, and thus renders null and void the noncompetition covenant. For the reasons stated above, I conclude that there is no merit to this contention.

IV.

Defendant’s main contention is that the covenant in question is void and unenforceable because it is contrary to public policy. But he paints with too broad a brush, for public policy is violated only where the covenant is unreasonable.

The covenant in issue states the following:

Dr. Paul W.

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Cite This Page — Counsel Stack

Bluebook (online)
16 V.I. 284, 1979 V.I. LEXIS 18, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williamson-v-hess-virginislands-1979.