Case Name: Eureka Laundry Company, Appellant, vs. Long, Respondent
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1911-05-02
Citations: 146 Wis. 205
Docket Number: 
Parties: Eureka Laundry Company, Appellant, vs. Long, Respondent.
Judges: 
Reporter: Wisconsin Reports
Volume: 146
Pages: 205–213

Head Matter:
Eureka Laundry Company, Appellant, vs. Long, Respondent.
April 7 —
May 2, 1911.
Contracts: Validity: Master and servant: Restrictive covenants: Restraint of trade: Equity: Injunction.
1. In a contract for the employment of defendant as driver of a laundry wagon for plaintiff over a specified route in the city of Milwaukee, a stipulation to the effect that defendant will not during such employment nor for two years thereafter solicit laundry trade from any of plaintiff’s customers supplied hy him while so employed, nor engage directly or indirectly in the laundry business in that part of the city included in such route, is reasonable and valid.
2. Such restrictive covenants, if not otherwise contrary to public policy, must he held valid when they appear to be reasonably necessary for the fair protection of the employer’s business or rights and do not unreasonably restrict the right of the employee, due regard being had to the subject matter of the contract and the circumstances and conditions under which it is to be performed.
3. An action in equity will lie to restrain the breach of a restrictive agreement of this character, since an action at law would not furnish an adequate remedy.
4. The doctrine that negative enforcement by injunction of a contract for personal services will not be decreed unless the services belong to a class that may be termed “unique, peculiar, individual, or extraordinary,” has no application to such a case, where the employer claims no damages by reason of the employee having left his employ and does not seek to retain such employee in his service.
Appeal from an order of tbe circuit court for Milwaukee ■county: WabbeN D. TabbaNt, Circuit Judge.
Reversed.
Suit in equity. On tbe lltb of April, 1909, tbe plaintiff and defendant entered into a contract for an indefinite period whereby tbe defendant for a consideration therein named agreed to drive a laundry wagon for tbe plaintiff on a specified route in tbe city of Milwaukee. Tbe portion of tbe contract material to tbis case is as follows:
“Tbe said party of tbe second part also agrees that be will not at any time while be is in tbe employ of tbe said party of tbe first part, or within two years after leaving its service, for himself or any other person, persons or company, call for and deliver laundried and unlaundried goods, to any person or persons who shall have been customers of said party of tbe first part, and supplied by said party of tbe second part during any time be may have been employed under tbis contract, nor will be in any way, directly or indirectly, solicit, divert, take away or attempt to solicit, divert or take away any of tbe ■custom, business or patronage of such customers within such two years, and said party of tbe second part further agrees that be will not at any time while be is in the- employ of tbe said party of tbe first part, or within two years after leaving its service, for bimself or any other person, persons or company, engage in the laundry business, or call for and deliver any laundried or unlaundried goods, either directly or indirectly, in that portion of the city of Milwaukee, Wisconsin, known as Route Bj between Lake Michigan, East and North Water streets, Wisconsin street and Keefe avenue (said portion of the city containing the laundry route or territory especially intrusted by said party of the first part to party of the second part).”
On September 10, 1910, defendant voluntarily left the ■employ of the plaintiff, and this suit is brought to restrain him from violating the portions of the contract set out above. A court commissioner issued an injunction restraining the defendant, until the further order of the court, from “either ■for himself or any other person, persons or company, calling for or delivering laundried and unlaundried goods to any person or persons who shall have been customers of the plaintiff and as such supplied by the defendant during any time he was in the plaintiff’s employment, and from in any way, directly or indirectly, soliciting, diverting, taking away from or attempting to solicit, divert or take away from any of the •customs, business or patronage of the plaintiff’s customers and from, for himself or any other person, persons or company, •engaging in the laundry business and calling for or delivering laundried or unlaundried goods, either directly or indirectly, in that portion of the city of Milwaukee situated and bounded by Lake Michigan on the east, Wisconsin street on the south, East and North Water streets on the west, and Keefe avenue on the north.” The trial court dissolved the injunction, and the plaintiff appealed.
Eor the appellant there was a brief by Olwell & Drought, attorneys, and Bossiter Lines, of counsel, and oral argument by L. A. Ohuell.
They cited Mitchel v. Beynolds, 1 P. Wms. 181; Horner v. Graves, 7 Bing. 735; Gibbs v. Consolidated ■Gas Go. 130 U. S. 396; Oregon Steam New. Go-, v. Winsor, 20 Wall. 64; Harrison v. Glucose S. B. Go. 116 Fed. 304; Anchor E. Go. v. Hawlces, 171 Mass. 101; Myers v. Steel M. Go. 67 N. J. Eq. 300; McGall Go. v. Wright, 133 App. Div. 62, 117 N. T. Supp. 776; and other cases.
Eor tbe respondent there was a brief by John S. Kaney and Churchill, Bennett & Churchill, and oral argument by W. H. Ghurchill.

Opinion:
ViNJE, T.
Tbe first question raised by tbe appeal is tbe validity of tbe portion of tbe contract set out in tbe foregoing statement of facts wherein tbe defendant agrees, during tbe term of bis employment and for two years thereafter, not to solicit laundry trade from any customers of tbe plaintiff who have been supplied by him during bis employment, and that be will not, during such employment and for two years thereafter, either directly or indirectly engage in tbe laqndry business in that part of Milwaukee known as Route 13. Were this a ease where tbe defendant bad sold plaintiff tbe laundry business and bad made tbe covenants above referred to, no question as to the validity of tbe contract would arise under tbe decisions of our own state. Cottington v. Swan, 128 Wis. 321, 107 N. W. 336; My Laundry Co. v. Schmeling, 129 Wis. 597, 109 N. W. 540, and cases cited on page 606. It meets all tbe requirements of tbe rule laid down in Tecktonius v. Scott, 110 Wis. 441, 86 N. W. 672, to tbe effect that such contracts, in order to be valid, must be limited as to time, space and extent of trade, to what is reasonable under tbe circumstances of tbe case. And it is much more limited as to time and space than tbe contract held valid in Gotiington v. Swan, supra.
Tbe question arises, Does it make any substantial difference whether tbe thing of value bargained for is contained in a contract of sale or in a contract of hiring ? If it is lawful and proper to protect a business just about to be acquwed from certain acts by tbe seller who is familiar with such business, why is it not equally lawful and proper to protect an established business from sucb acts by one wbo bas become familiar tberewitb ? We perceive no difference in principle. The purchaser says to the seller: You are familiar with this business; you know your customers; your personal acquaintance with them is such that you could divert their trade from me if you saw fit; now I will purchase your business upon the express condition that you will agree for a limited length of time not to engage in a like business in this locality; at the expiration of that time I shall know my business and my customers well enough to be able to protect myself. So the owner of an established business says to a prospective employee : In the employment you will become familiar with the customers of my business in a way that I cannot'; you will meet them frequently while I see them rarely if ever; now I will hire you upon the express condition that you will agree for a limited length of time not to solicit trade from such of my customers as you may have supplied while in my employ, and will not engage in my business within a limited time in the territory you have occupied; at the end of that time my new employees will be sufficiently well acquainted with my customers to protect my business. Why is not one contract as valid as the other ? Both are based upon valuable considerations. If it be said that the latter contract tends unreasonably to hamper employees in their quest for employment, the answer is: Whatever is reasonably necessary for the protection of a legitimate business promotes the best interests of the employees of that business. No doubt experience has shown that owners of a business like that of plaintiff need such' protection in a large city, where the customers as a rule come in contact only with the employee, and that his personality and his acquaintance with them has much to do with the retention of their patronage. Freedom to contract must not be unreasonably abridged. Neither must the right to protect by reasonable restrictions that which a man by industry, skill, and good judgment has built up; be denied. If the restrictions are not otherwise contrary to' public policy they must be held to be valid when they appear to be reasonably necessary for the fair protection of the employer's business or rights, and do not unreasonably restrict the rights of the employee, dne regard being had to the subject matter of the contract and the circumstances and conditions under which it is to be performed. My Laundry Co. v. Schmeling, 129 Wis. 597, 109 N. W. 540; Gibbs v. Consolidated Gas Co. 130 U. S. 396, 9 Sup. Ct. 557; Anchor E. Co. v. Hawkes, 171 Mass. 101, 50 N. E. 509; Harrison v. Glucose S. R. Co. 116 Fed. 304.
If the restrictive covenants of the contract are held valid, it is apparent that an action at law for their breach would no more furnish an adequate remedy than would an action at law for the breach of similar covenants in a contract for the sale of a business. That equity alone can furnish an adequate remedy in such cases is well settled. My Laundry Co. v. Schmeling, supra.
Counsel for respondent grounds his case upon the fact that negative enforcement by injunction of a contract for personal services will not be decreed unless the services belong to a class that may be called unique, peculiar, individual, or extraordinary and cites the following cases to sustain the proposition: H. W. Gossard Co. v. Crosby, 132 Iowa, 155, 109 N. W. 483; Chain Belt Co. v. Von Spreckelsen, 117 Wis. 106, 94 N. W. 78; Wm. Rogers Mfg. Co. v. Rogers, 58 Conn. 356, 20 Atl. 467; Strobridge L. Co. v. Crane, 12 N. Y. Supp. 898; Burney v. Ryle & Co. 91 Ga. 701, 17 S. E. 986; Osius v. Hinchman, 150 Mich. 603, 114 N. W. 402; Cort v. Lassard, 18 Oreg. 221, 22 Pac. 1054.
In the case of H. W. Gossard Co. v. Crosby, 132 Iowa, 155, 109 N. W. 483, 6 L. R. A. n. s. 1115, the contract contained no negative covenants, and it was there sought to restrain the defendant, who had agreed to work for the plaintiff for a specified time, from entering into the same employment with any one else, namely, that of demonstrating and selling front-lace corsets.
In the case of Chain Belt Co. v. Von Spreckelsen, 117 Wis. 106, 94 N. W. 78, it was held that there was no abuse of discretion in dissolving an in junctional order restraining an expert mechanic, under contract of employment with plaintiff, from entering into the service of another company. No negative covenants were contained in the contract of service, and it was not controverted that the defendant had acquired his knowledge and skill before he entered the employ of the plaintiff.
In William Rogers Mfg. Co. v. Rogers. 58 Conn. 356, 20 Atl. 467, the court refused to enjoin defendant from leaving the employment of the plaintiff or engaging generally in other business in violation of his contract. In that case he had agreed not to engage, or allow his name to be employed in any manner, in any other or similar business, and the court very properly held that such a restriction was an unreasonable one.
In the case of Strobridge L. Co. v. Crane, 12 N. Y. Supp. 898, the court refused to restrain the defendant from working for another firm or for another person or corporation as a lithographic designer, it appearing that the purpose of the injunction was to retain the defendant in the employ of the plaintiff and there being no proof that his place could not be adequately supplied by someone else.
In Burney v. Ryle & Co. 91 Ga. 701, 17 S. E. 986, the court held that plaintiff was not entitled to an injunction restraining the defendant from working for others, even though the contract of employment contained a negative covenant, where it was apparent that plaintiff sought that remedy in order to receive the benefit of an affirmative covenant to serve him exclusively for a specified time, the services there not being individual or peculiar.
In the case of Osius v. Hinchman, 150 Mich. 603, 114 N. W. 402, tbe court evidently treated tbe purpose of tbe injunction to be to retain tbe employee in tbe service of tbe plaintiff, for tbe court says:
"After eliminating tbe matter of trade secrets, tbe contract sought to be enforced is a contract of employment containing this negative agreement, requiring no special skill other than that wbicb could be rendered by an ordinary dentist. A breach by an employee of such a contract will not be enjoined, for the reason that a substitute can be readily supplied and tbe. remedy at law is adequate."
So that apparently was a case where tbe plaintiff sought by' injunction to retain tbe defendant in its employ, or at best to protect himself from damages by reason of tbe defendant leaving bis employment.
In Cort v. Lassard, 18 Oreg. 221, 22 Pac. 1054, 6 L. R. A. 658, tbe court refused to issue an injunction restraining tbe defendant, who was an ordinary acrobat, from entering tbe employment of others, though be bad contracted to perform exclusively for tbe plaintiff for a certain length of time. Tbe opinion went on tbe ground that tbe plaintiff could readily procure another acrobat to perform tbe services theretofore rendered by tbe defendant.
In all tbe cases above referred to tbe plaintiffs alleged damages to their businesses by reason of tbe fact that tbe defendants left their employ. We have no.such case here. In this case it is not claimed that tbe plaintiff has in any way been damaged or injured by reason of tbe fact that defendant has left its employ, and no damages are sought on that account, nor is it sought, either directly or indirectly, to retain tbe defendant in tbe employ of tbe plaintiff as in many of tbe cases cited by respondent. On tbe contrary, tbe defendant is sought to be restrained from committing certain acts, after be has left tbe employment of-tbe plaintiff, wbicb will directly inj are plaintiff's business, and wbicb, in bis contract of employment, be specifically agreed that be would not do. So it is appar ent that tbe eases cited by tbe respondent bave no application to tbe case at bar. Tbe trial court properly found that tbe services of tbe defendant in tbis case were ordinary services sucb as could be performed by any one. But tbis case presents no question as to tbe character or kind of service to be rendered. It does not lie in tbe mouth of tbe defendant to say that any one, whether skilled or unskilled, could cause similar damage to plaintiff's business after leaving its employ. He agreed not to cause sucb damage. Tbe agreement was a reasonable and valid one, and a court of equity will enforce it.
By the Gourt. — Order reversed, and cause remanded for further proceedings according to law.