Opinion ID: 2391841
Heading Depth: 1
Heading Rank: 3

Heading: Protection of the Promisee's Legitimate Interests.

Text: The court concludes there is no legitimate business interest of Mobile which the covenant is necessary to protect. 725 S.W.2d 172. The court then proceeds to create a new principle by distinguishing between business goodwill of the franchisor and personal goodwill of the franchisee. The court also suggests that the goodwill developed by the franchisee on behalf of the franchisor belongs to the franchisee, and that the franchisor cannot legitimately seek to protect that goodwill. This principle is inconsistent with Texas law. The authorities that have considered this issue have uniformly determined that goodwill developed by either a franchisee or an employee accrues to the benefit of the franchisor or employer, respectively, and is an interest in which the franchisor or employer is entitled to protect. In Henshaw v. Kroenecke, 656 S.W.2d at 418, we stated: Henshaw had a right to protect himself from the possibility that Kroenecke would establish a rapport with the clients of the business and upon termination take a segment of that clientele with him.... Henshaw had a legitimate interest to protect, and therefore, the covenant was reasonable. See Weatherford Oil Tool Co. v. Campbell, 340 S.W.2d at 951; Spinks v. Riebold, 310 S.W.2d at 669. See also Gill v. Guy Chipman Co., 681 S.W.2d 264, 268 (Tex. App.-San Antonio 1984, no writ) (employee restraint necessary to protect diversion of employer's business); Investors Diversified Servs., Inc. v. McElroy, 645 S.W.2d 338, 339 (Tex.App.-Corpus Christi 1982, no writ) (injury is the diversion of customers and goodwill from the employer); Leck v. Employers Casualty Co., 635 S.W.2d 450, 453-54 (Tex.App.-Fort Worth 1982, no writ) (protecting employer from harm to the business by employee diverting customers); Dittmer v. Source EDP, Texas, Inc., 595 S.W.2d 877, 880 (Tex.Civ.App.-Dallas 1980, no writ) (contacts with employer's customers were protectable assets); Kidde Sales & Serv., Inc. v. Peairson, 493 S.W.2d 326, 329-30 (Tex.Civ.App.-Houston [1st Dist.] 1973, no writ) (covenant valid where employee acquires special influence over employer's customers giving employee advantage over employer in competition for customer's business); Hospital Consultants, Inc., v. Potyka, 531 S.W.2d 657, 661 (Tex.Civ.App.-San Antonio 1975, writ ref'd n.r.e.) (employer has sufficient interest in retaining customers to support covenant not to compete). Even the Utah Supreme Court, which is relied upon by the court, has held that the goodwill created by an employee at the expense of the employer belongs to the employer even though a large measure of that goodwill was due to the personality and efforts of the employee. See System Concepts, Inc. v. Dixon, 669 P.2d 421, 426 (Utah 1983); Allen v. Rose Park Pharmacy, 120 Utah 608, 237 P.2d 823, 827 (1951). Other jurisdictions are in accord. See Gafnea v. Pasquale Food Co., 454 So.2d 1366, 1369 (Ala.1984); Snelling and Snelling, Inc. v. Dupay Enters., Inc., 125 Ariz. 362, 609 P.2d 1062, 1064 (App.1980); Watson v. Waffle House, Inc., 253 Ga. 671, 324 S.E.2d 175, 177-78 (1985); Shakey's Inc. v. Martin, 91 Idaho 758, 430 P.2d 504, 509-10 (1967).