Title: Summits 7, Inc. v, Kelly

State: vermont

Issuer: Vermont Supreme Court

Document:

Summits 7, Inc. v, Kelly (2004-242); 178 Vt. 396; 886 A.2d 365

2005 VT 97

[Filed 19-Aug-2005]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2005 VT 97

                                No. 2004-242

  Summits 7, Inc.	                         Supreme Court

                                                 On Appeal from
       v.	                                 Chittenden Superior Court

  Staci Kelly	                                 March Term, 2005

  Matthew I. Katz, J.

  Wanda I. Otero-Ziegler of Paul Frank + Collins P.C., Burlington, for
    Plaintiff-Appellee.

  E. William Leckerling and Christina A. Jensen of Lisman, Webster,
    Kirkpatrick & Leckerling, P.C., Burlington, for Defendant-Appellant.

       PRESENT:	Reiber, C.J., Johnson and Skoglund, JJ., and Crawford, Supr.
  J. and Allen, C.J. (Ret.),
  Specially Assigned

        
       ¶  1.  ALLEN, C.J. (Ret.), Specially Assigned.   Defendant Staci
  Lasker (FN1) appeals the superior court's order enjoining her from working
  for a competitor of her former employer, plaintiff Summits 7, Inc., based
  on the terms of a noncompetition agreement entered into by the parties
  during Lasker's at-will employment with Summits 7.  The principal issue in
  dispute is whether there was sufficient consideration to support the
  agreement.  The superior court ruled that either Lasker's continued
  employment or the promotions and increased pay she received during her
  employment with Summits 7 was sufficient consideration to support the
  agreement.  We agree with the superior court that Lasker's continued
  employment constituted sufficient consideration.  Further, we discern no
  basis for granting Lasker's request that we reverse the superior court's
  judgment and remand the matter for the court to consider whether the
  geographic scope of the agreement's restrictions was unreasonably broad.

       ¶  2.  Summits 7, which is located in Williston, Vermont, provides
  printing, copying, and other related services to its customers.  In January
  2000, the company hired Lasker, who had an associate's degree in graphic
  arts technology, to work in its customer services department for ten
  dollars an hour.  In April 2000, Lasker became a sales assistant and
  received a fifteen percent raise.  Within the next three months, she
  received another promotion and raise and, in November 2000, she was
  assigned to the sales department and given a $30,000 salary plus
  commissions.  Lasker continued to assume greater and greater
  responsibilities with Summits 7, eventually becoming a supervisor.  Her pay
  increased along with the additional responsibilities, reaching $39,000 in
  2001, $49,000 in 2002, and $19,000 for the first three months of 2003
  before she left her employment.

       ¶  3.  In January 2001, one year after Summits 7 hired her, Lasker
  signed a noncompetition agreement prohibiting her from working in Vermont,
  New Hampshire, or a designated part of New York for any direct or indirect
  competitor of Summits 7 for a period of twelve months "following
  termination of your employment for cause or a voluntary termination of
  employment."  Lasker signed a second agreement containing similar language
  in October 2002 after Summits 7 purchased another company and expanded the
  kinds of services it provided.  In April 2003, Lasker voluntarily
  terminated her employment with Summits 7.  Two months later, in June 2003,
  she began working for Offset House, Inc., a competitor of Summits 7 located
  in nearby Essex Junction, Vermont.
   
       ¶  4.  In October 2003, Summits 7 filed a complaint seeking to
  enjoin Lasker from working for Offset House.  Following a trial in April
  2004, the superior court entered judgment in favor of Summits 7.  The court
  enjoined Lasker from working for Offset House, extended the effective terms
  of the noncompetition agreement until March 30, 2005, and awarded Summits 7
  $11,552 in attorney's fees.  With respect to the principal point in
  dispute, the court opined that Lasker's continued employment with Summits 7
  was sufficient consideration to support the noncompetition agreement, but
  concluded that it was unnecessary to reach that question because the
  substantial promotions and raises that Lasker received during her
  employment with Summits 7 were more than reasonable consideration to
  support enforcement of the covenant.  The court also concluded that it did
  not need to determine whether the geographic scope of the agreement was
  unduly broad because even a narrow construction of the agreement would
  preclude Lasker from accepting work for a direct competitor of Summits 7
  located within a short geographic distance from, and in a market served by,
  Summits 7.

       ¶  5.  On appeal, Lasker argues that the trial court erred by
  enforcing the noncompetition agreement because (1) the agreement was not
  supported by consideration, and (2) the court failed to consider the
  unreasonably broad geographic scope of the agreement.  According to Lasker,
  in an at-will employment context, continued employment means nothing
  because the employer has the right to terminate the employment at any time
  for any reason.  Lasker further contends that the promotions and raises she
  received were not ancillary to the noncompetition agreements that she
  signed.

                                     I.
   
       ¶  6.  We start by examining the legal backdrop of the case.  The
  common-law policy against contracts in restraint of trade is longstanding
  and firmly established, dating back to the time when the apprenticeship
  system ruled.  See Lake Land Employment Group of Akron LCC v. Columber, 804 N.E.2d 27, 30 (Ohio 2004); Hopper v. All Pet Animal Clinic, Inc.,