Court Opinion

ID: 2643732
Source: CourtListenerOpinion
Date Created: 2013-11-22 19:31:54.46292+00
Date Added: 2024-06-11T12:52:14.639851
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 12-2085

DEVIN HAMDEN,

                Plaintiff - Appellee,

           v.

TOTAL CAR FRANCHISING CORPORATION,

                Defendant - Appellant.

Appeal from the United States District Court for the Western
District of Virginia, at Roanoke.     James C. Turk, Senior
District Judge. (7:12-cv-00003-JCT)

Argued:   September 19, 2013            Decided:   November 22, 2013

Before NIEMEYER, GREGORY, and FLOYD, Circuit Judges.

Affirmed in part; reversed in part by unpublished opinion.
Judge Gregory wrote the opinion, in which Judge Niemeyer and
Judge Floyd joined.

ARGUED:    Thomas Meredith Winn, III, WOODS ROGERS P.L.C.,
Roanoke, Virginia, for Appellant. Robert Edwin Dean, II, FRITH
& ELLERMAN LAW FIRM, PC, Roanoke, Virginia, for Appellee.    ON
BRIEF:   Frank K. Friedman, Frank H. Hupfl, III, WOODS ROGERS,
P.L.C., Roanoke, Virginia, for Appellant. T. Daniel Frith, III,
Lauren M. Ellerman, FRITH & ELLERMAN LAW FIRM, PC, Roanoke,
Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
GREGORY, Circuit Judge:

       Appellant Total Car Franchising Corporation d/b/a Colors on

Parade (“TCF”) appeals the district court’s order finding that a

franchising agreement’s restrictive covenants do not apply to a

former   franchisee.         The   contract      at        issue   dictated      various

restrictions that would occur upon termination of the agreement.

The issue before us is whether the natural end of the contract

qualifies   as    termination.          We    find    that     the   district     court

correctly     defined    termination           within         this    context,      but

termination was not necessary to trigger one of the restrictive

covenants at issue.      Accordingly, we affirm in part and reverse

in part.

                                         I.

       Appellee Devin Hamden operated a TCF franchise in Virginia

and West Virginia from 1996 until 2011.                    TCF is a South Carolina

corporation      providing    auto   repair          and    restoration     services,

focusing on paint restoration and paintless dent repair.                         Hamden

learned of TCF through a friend, Phil Barker, who worked for

TCF.     Hamden     worked    as   an    apprentice          to    Barker   in    1995.

Subsequently, TCF offered Hamden an opportunity to become a TCF

franchisee.

                                         2
      On May 9, 1996, Hamden executed two documents granting him

status as a TCF franchisee performing paintless dent repair. 1

The first of these was the Limited Rights Franchise Agreement

(“Franchise Agreement”).         The Franchise Agreement set the term

of the agreement at fifteen years.            It further noted that Hamden

could renew the agreement at the end of the fifteen-year term if

he provided notice of his intent to do so during a certain time

period “before this Agreement’s expiration[.]”                      The Franchise

Agreement    further    designated   the      area   in     which    Hamden   could

provide paintless dent repair services.

      Section 9 of the Franchise Agreement, entitled “Rights and

Duties of Parties Upon Expiration, Termination or Non-renewal,”

contained a post-term non-competition clause operational “[f]or

2   years   following   the   termination      of    this    Agreement.”      This

covenant     prohibited       Hamden’s       participation          in   a    paint

restoration business.         Section 9 also imposed certain duties,

such as the return of TCF property, upon termination of the

Agreement “for any reason.”

      1
       The parties agreed to certain modifications deviating from
TCF’s standard franchise agreement.     Having consulted with an
attorney prior to entering into the agreements, Hamden lowered
the royalty fees due to TCF from 40% to 27%.         Hamden also
included a provision protecting his unrestricted right to use,
upon cessation of his franchisee status, any knowledge, skills,
and training acquired prior to signing the agreements.

                                         3
      The   parties    contemporaneously     executed   a   Non-Competition

and   Confidentiality     Agreement       (“Confidentiality    Agreement”),

which the Franchise Agreement incorporated by reference.               The

Confidentiality Agreement contained three relevant restrictive

covenants. 2     The    Confidentiality      Agreement’s    non-competition

clause provided that

      If the Franchise Agreement is terminated before its
      expiration date, or if you assign or transfer your
      interest in the Franchise Agreement, to any person or
      business organization except according to Section 7 of
      the Franchise Agreement, then You covenant, for a
      period of 2 years after termination, transfer or
      assignment, not to engage as an owner, operator, or in
      any managerial capacity, in any business engaged in
      the same or similar type of appearance technologies
      within the metropolitan statistical area in which the
      Franchise Agreement’s Designated Marketing Area is
      located, other than as an authorized franchisee or
      employee of another Colors on Parade franchise.

The non-disclosure clause stated, in pertinent part, that

      During the term of the Franchise Agreement and
      thereafter, you agree not to communicate directly or
      indirectly, divulge to or use for your benefit or the
      benefit of any other person or legal entity, any trade
      secrets which are proprietary to Colors on Parade or
      any   information,   knowledge    or    know-how   deemed
      confidential   under  Section   5    of   the   Franchise
      Agreement, except as we permit.         If there is any
      termination of this Agreement, You agree that you will
      never use our confidential information or trade
      secrets, in the design, development or operation of

      2
         The  Confidentiality   Agreement   also  contained   a
severability clause, providing for enforcement of the remainder
of the agreements in the event any given provision or clause is
stricken.

                                      4
        any business specializing in appearance technologies
        as Colors on Parade applies them.

The non-solicitation clause provided that

        During the term of the Franchise Agreement and for 2
        years after its termination or after its assignment or
        transfer, You agree that You will neither directly nor
        indirectly solicit, induce, divert or take away any
        customer within the statistical marketing area in
        which the DMA is located where [Hamden] actually
        served during the term of this Agreement.

        Hamden performed paintless dent repair as a TCF franchisee

for the entirety of the fifteen-year term, which ended May 9,

2011.      Unaware    of   the   term’s       end,   Hamden   continued   working

thereafter as a franchisee.          Only upon receiving an email from

TCF in October 2011, reminding him that the term ended and he

could still renew the Franchise Agreement, did Hamden realize

the term ended.       On November 30, 2011, having decided to pursue

his own business, Hamden, through a conversation with Barker,

informed TCF he would not seek renewal.                 Hamden reiterated this

position a few days later in a meeting with TCF Chief Executive

Officer     Jeffrey   Cox.       Hamden’s       franchisee    status   ended   on

December 3, 2011.          TCF informed Hamden of its intent to pursue

an injunction and damages in the event Hamden proceeded with his

business.      Hamden thereafter sought a declaratory judgment in

the district court.

                                          5
      After a one-day bench trial, the district court held that

the restrictive covenants did not bind Hamden. 3                      The district

court first held that “termination” as used in the restrictive

covenants did not encompass an “expiration” brought about by the

natural end of the term.              On this basis, the district court

found     the    non-competition      and       non-solicitation      clauses   non-

binding on Hamden.        With respect to the non-disclosure covenant,

the district court held that Hamden either complied with the

covenant by his return of TCF property or was not bound by it

due     to   lack   of   termination.            The   district    court     further

concluded that Section 9’s post-term restriction applied only to

“paint restoration,” not the paintless dent repair work Hamden

performed.

      TCF       timely   filed   an     appeal         over   which     we   retain

jurisdiction pursuant to 28 U.S.C. § 1291.

                                        II.

      In reviewing rulings from a bench trial, we review factual

findings for clear error and conclusions of law de novo.                     Helton

v. AT&T Inc., 709 F.3d 343, 350 (4th Cir. 2013).                   Conclusions of

      3
       The district court denied Hamden’s request for attorney’s
fees and costs, a ruling that is not on appeal.

                                            6
law include contract construction.              Roanoke Cement Co. LLC v.

Falk Corp., 413 F.3d 431, 433 (4th Cir. 2005).

                                        III.

     TCF advances two arguments supporting its position that the

district court erred with respect to the non-disclosure and non-

solicitation      provisions.       First,     TCF    avers    that    termination

under     the   agreements     encompasses      the    natural        end    of    the

contract.       As such, all of the restrictive covenants requiring

termination of the agreements should apply to Hamden.                        Second,

TCF contends that the restrictive covenants impose reasonable

limitations on Hamden and are thus enforceable.

     We     apply       Virginia   interpretation        principles         to    this

dispute, as state law governs contractual matters.                          James v.

Circuit City Stores, Inc., 370 F.3d 417, 421-22 (4th Cir. 2005).

Under Virginia law, we “construe the contract as a whole” when

ascertaining      the    meaning   of    any   portion    or    provision         of   a

contract, such as those situations where parties dispute the

meaning of a term or phrase.            Doctors Co. v. Women’s Healthcare

Assocs., Inc., 740 S.E.2d 523, 526 (Va. 2013); Am. Spirit Ins.

Co. v. Owens, 541 S.E.2d 553, 555 (Va. 2001).                         An agreement

“complete on its face” is unambiguous and thus precludes the

need for any search beyond the instrument itself in construing

the contract.       Ross v. Craw, 343 S.E.2d 312, 316 (Va. 1986).

                                         7
Any   ambiguity   that    arises   in     the   contractual    language   is

construed against the drafter.          Doctor’s Co., 740 S.E.2d at 526.

However, a contractual provision is not ambiguous merely because

the parties disagree as to the provision’s meaning.             TM Delmarva

Power, L.L.C. v. NCP of Va., L.L.C., 557 S.E.2d 199, 200 (Va.

2002).    Virginia law presumes parties do not include meaningless

contract provisions.      Ross, 343 S.E.2d at 317.            Thus, we will

not interpret a clause in a manner rendering it meaningless so

long as a reasonable meaning can be attributed thereto.               Hitachi

Credit Am. Corp. v. Signet Bank, 166 F.3d 614, 624 (4th Cir.

1999) (citing Berry v. Klinger, 300 S.E.2d 629, 633 (Va. 1965)

and Winn v. Aleda Constr. Co., 315 S.E.2d 193, 195 (Va. 1984)).

      Ascertaining   enforceability      requires   us   to   first   address

the   threshold   issue   of   whether     termination    encompasses     the

expiration of the Franchise Agreement at the end of its fifteen-

year term.    Only then may we consider which provisions, if any,

are applicable and whether they are enforceable. 4

                                    A.

      TCF argues that this threshold issue may be resolved by a

straightforward application of dictionary definitions and cases

      4
       Finding that “termination” did not include “expiration”,
the district court held that the provisions were not triggered,
and thus did not address the enforceability of the provisions’
substantive restrictions.

                                    8
finding    no    difference     between        “terminate”    and    “expire”     when

construing a contract.           TCF further contends that the language

of the contract as a whole presents an expansive definition of

termination, evidenced by its use of the broad modifier “any”

when referring to termination.

     Hamden       counters     by    reasoning        that    “termination”         and

“expiration” are not necessarily analogous, and the contract’s

use of both indicates a different meaning for the terms.                            In

light of the fact that another section within the contract used

“expiration” to refer to the natural end of the fifteen-year

term,    Hamden   maintains      that     “terminate”      and     “expire”     carried

different meanings in the parties’ agreements. 5

     In    the    lexicological          sense,     termination      would      include

expiration, as the latter is a type of termination.                       Black’s Law

Dictionary      defines      termination       as   both    “the    act    of   ending

something”      and   “the    end   of    something    in    time    or    existence;

     5
       We decline Hamden’s invitation to find ambiguity simply
because the contractual language could be understood as bearing
multiple meanings. Hamden cites Lincoln National Life Insurance
Company v. Commonwealth Corrugated Container Corporation, 327
S.E.2d 98 (Va. 1985), where the Supreme Court of Virginia held
that ambiguous language within an insurance policy should be
construed strictly against an insurer. Id. at 101. However, we
must find more than mere disagreement between the parties;
ambiguity must arise from the contract as a whole, not from the
consideration of isolated terms or provisions within a vacuum.
Resource Bankshares Corp. v. St. Paul Mercury Ins. Co., 407 F.3d
631, 636 (4th Cir. 2005).

                                           9
conclusion or discontinuance.”                  Black’s Law Dictionary 1609 (9th

ed. 2009).           It exemplifies this meaning by stating that the

termination      of    employment         is   “the       complete    severance        of    an

employer-employee relationship.”                    Id.    The unqualified nature of

“conclusion or discontinuance,” without tying such conclusion to

an   affirmative       act,       could    reasonably        encompass          the   natural

expiration      of    an   agreement.           “Expiration”         is    defined     as    “a

coming to an end; esp., a formal termination on a closing date.”

Id. at 660.      This definition clearly suggests that expiration is

reasonably      viewed       as    a    form   of    termination,         rather      than    a

distinctly different event altogether.                      See Mountain Fuel Supply

v. Reliance Ins. Co., 933 F.2d 882, 890 n.11 (10th Cir. 1991)

(citing     cases      for        the   proposition         that,     in        contrast     to

cancellation, “[e]xpiration is the natural termination of the

policy at [a date] set forth in the policy’s own terms”).                                 We do

not find that the mere use of both terms within the agreements

necessitates a different meaning for each.                           See NaturaLawn of

America, Inc. v. West Group, LLC, 484 F. Supp. 2d 392, 401 (D.

Md. 2007) (finding that the use of expiration and termination

“does     not   undercut          th[e]    conclusion”        that        the     terms     are

analogous).

     Viewed as a whole, however, the contract provides support

for the notion that termination correlates to an affirmative act

and the terms are thus distinct here.                      TCF relies primarily upon

                                               10
NaturaLawn; however, that case, like other cases cited by the

parties,     holds     limited      persuasive          value    because         not   all

contracts use the same terms in the same manner.                            Unlike the

contract   in    NaturaLawn,       no    covenant       TCF    attempts     to    enforce

explicitly purports to apply upon expiration.                         Cf. id. at 397

(NaturaLawn’s         contract     language        unequivocally            noted      the

restrictions applied “for two years after the termination or

expiration of the Franchise Agreement”).                      Thus, we consider how

the   Franchise        Agreement        defines    and        uses    the    terms      in

ascertaining whether the parties use them interchangeably in a

manner similar to that in NaturaLawn.

      Lacking     a    section     defining       the     terms,      the    Franchise

Agreement’s sole indicator of what constitutes a termination is

Section 8.      Section 8 states that all rights granted to Hamden

would terminate automatically upon the occurrence of the events

listed therein.         Section 8 also granted Hamden the ability to

terminate the agreement voluntarily so long as he remained in

compliance      with    the   remaining         terms    of     the   agreement        and

provided     proper     notice.          Expiration,       while      not    explicitly

defined, appears in Section 2, which explains that renewal could

occur if Hamden provided notice within a set time frame “before

this Agreement’s expiration.”

      Under Virginia law, it is fair to read the contract as

indicating that termination only occurred upon the occurrence of

                                           11
these listed events in Section 8, none of which were the natural

end of the term.            See Clinch Valley Physicians, Inc. v. Garcia,

414 S.E.2d 599 (Va. 1992).            In Clinch Valley, the Supreme Court

of Virginia found a non-competition provision inapplicable to

nonrenewal where the provision indicated its applicability to

termination “for any reasons whatsoever.”                        Id. at 601.           The

court    reasoned       that   the   section      defining       termination      solely

referenced the employer’s right to terminate the contract for

cause.    Id.      Therefore, the court held, “any reasons” must be

construed with respect to any of the reasons for which the party

invoking termination might end the employment contract, and not

as inclusive of mere nonrenewal.                  Id.     Turning to the case sub

judice,   Section       8    indicates     that       termination     occurs    upon    an

action:    either Hamden’s violation of the Franchise Agreement or

his notice of his intent to terminate.                    Applying Clinch Valley’s

principles, the Franchise Agreement’s failure to indicate that

termination      arises        passively     through       expiration,         which    it

recognizes    as    a    separate    event       in    Section   2,   indicates        that

expiration      does    not    trigger     the    restrictive       covenants.         Cf.

Specialty Rental Tools & Supply, LP v. Shoemaker, 553 F.3d 415,

421 (5th Cir. 2008) (limiting “terminate” to an affirmative act

rather than the mere passage of time where the contract referred

to the end of the employment “as ‘ending’—not as ‘terminating’”

on a particular date, and the section defining termination only

                                           12
listed a number of affirmative acts, available to both parties,

necessary to end the agreement).

     While its binding effect on Hamden is not at issue, we

consider Section 9 in ascertaining the meaning of “termination.”

The rights and duties in Section 9 apply “[i]f this Agreement

terminates for any reason, and regardless of any dispute which

may exist between [Hamden] and [TCF].”                   Virginia courts afford

an expansive interpretation where a broad modifier such as “any”

is used.      See Sussex Cmty. Servs. Ass’n v. Va. Soc. for Mentally

Retarded      Children,     Inc.,    467   S.E.2d      468,   469-70       (Va.    1996).

When considered in isolation and applying the plain meaning of

“terminate” and “expire,” one may find that termination envelops

expiration. 6      However, we consider the modification power of

“any”    in   light    of   Clinch    Valley’s        holding      noted    above,   and

remain mindful that “any” may broadly apply to any reason for an

affirmative act of termination.

     The Confidentiality Agreement contains two non-competition

clauses,      which,   like   Section      9,   are    not    at    issue    for   their

     6
       We remain unconvinced by TCF’s argument that Section 9’s
heading proves the broad meaning of “termination.” Section 9’s
heading refers to “Expiration, Termination or Non-Renewal,” yet
nowhere in the text of Section 9 are the terms “expiration” or
“non-renewal.”   Thus, Section 9 can be read as inferring that
“termination” refers to any of those three terms. However, for
the reasons stated below, we find that the contextual use of the
terms does not support this conclusion.

                                           13
binding effect but are informative in ascertaining the context

for term construction.             In its use of “termination,” the non-

competition clause in this agreement suggests that termination

does       not   encompass      expiration.         The      second      clause   of     this

provision        indicates      that    “[i]f     the     Franchise          Agreement     is

terminated before its expiration date, or if [Hamden] assign[s]

or transfer[s] [his] interest in the Franchise Agreement, . . .

then       [Hamden]      covenant[s],    for    a    period         of   2    years    after

termination, transfer or assignment.”                        This language certainly

contemplates the agreement ending before the expiration fifteen-

year       term.        Based    upon   this    language,           “termination”         and

“expiration” bear two separate meanings.                        The prefatory clause

limits the later use of “termination” to include only the end of

the    parties’         relationship    prior     to      the   natural        expiration.

Considering           its    argument      that         termination          means       “the

relationship ends, for whatever reasons,” TCF’s reading would

render “before its expiration date” superfluous.                          If termination

included an expiration, then there would be no need to note its

application        to    a   termination   prior        to    the     expiration       date. 7

Thus, in this context, the terms bear different meanings in the

Confidentiality Agreement’s non-competition provisions.

       7
       Under TCF’s interpretation, the clause could arguably be
read as “expiration before the expiration date.” This would be
nonsensical.

                                           14
        The   non-disclosure         provision        also       contains    two       clauses

employing different triggering language.                           The first clause of

the non-disclosure provision notes its applicability “[d]uring

the   term    of   the    Franchise      Agreement          and    thereafter.”             This

language      undisputedly        contemplates            the     natural    end       of    the

fifteen-year       term    and    thus      binds    Hamden        from    the    moment      he

signed    the    Franchise       Agreement         into    perpetuity.           The    second

sentence, however, begins “[i]f there is any termination of this

Agreement,” suggesting an event necessarily different and apart

from the natural ending implied by the first clause.                               Thus, if

the first non-disclosure provision references the natural end,

then this second provision implicitly requires an ending prior

to May 9, 2011.           Had TCF intended for this second provision to

apply    regardless       of   how    the     parties’          relationship      ended,      it

would have reiterated or modified the language introducing the

first non-disclosure provision.

      Furthermore,        reading     “any         termination”       as    broader         than

simply “terminate” or “termination” in other places within the

contract would create more ambiguities than it would solve.                                  As

noted    above,    “termination”         in    the    Confidentiality            Agreement’s

non-competition provision does not encompass an expiration.                                   In

light    of     Clinch    Valley’s       principles         noted     above,       a    narrow

construction of “termination”—applying only to the active rather

than passive use—would be appropriate.                      To read “termination” in

                                              15
this second clause more broadly than in other provisions would

force a signatory to determine whether a term actually carries

multiple definitions at different places on the same page of the

same document.

      The non-solicitation provision restricted Hamden “[d]uring

the term of the Franchise Agreement and for 2 years after its

termination or after its assignment or transfer[.]”                          Not having

any reference to expiration, one may find reason to believe that

termination broadly refers to the point at which the Franchise

Agreement    ceased       to    govern           the     parties’       relationship.

Application only where the parties ended the relationship before

the   full   term     would    be    nonsensical,          as     businesses           would

reasonably   seek    to   protect        their    interests      and    client         bases

regardless   of     the    reason        for     the     end    of     the       franchise

relationship.        However,       we    cannot       read     this    provision        in

isolation from other instances that suggest that expiration is

not   necessarily     a   termination.            We     must    afford      a    uniform

definition   to   “terminate”       so     as    to    avoid    creating         ambiguity

through a patchwork of rights dependent upon various triggers

for the restrictive covenants.

      Having considered the context of the agreements, we find

that “termination,” as used in the agreements before us, does

not   encompass     expiration.           The      renewal      clause       cites      the

expiration   of     the   agreement,       not     the    termination,           and   thus

                                          16
suggests         that     the     terms    sufficiently     differ.            Section    8

identifies a number of actions giving rise to a termination.

The    Confidentiality            Agreement’s      non-compete    provision       plainly

limits     its     use       of   termination      internally,    by    the     prefatory

clause’s     use        of    “termination    before     expiration.”           The   non-

disclosure provision first contemplates the natural end of the

Franchise         Agreement,        then     introduces     “if        there     is      any

termination” in a manner suggestive that the phrases references

an event different and apart from “the term of the Agreement and

thereafter.”            The non-solicitation provision does not internally

reference expiration in an either explicit or implicit manner

like       the     non-competition           and     non-disclosure        provisions.

However, guided by both the need for a consistent definition and

the holding in Clinch Valley, we must construe it narrowly such

that “termination” excludes “expiration”.                        Thus, we read the

agreements to mean that “termination” refers to the end of the

parties’ relationship prior to May 9, 2011. 8

                                             B.

       Having      concluded        that    “termination”    does       not     encompass

expiration under this set of agreements, we find unenforceable

       8
        Furthermore, even assuming that the context did not
demonstrate the material difference in the terms, ambiguities
are construed against the drafter, in this case, TCF. Doctor’s
Co., 740 S.E.2d at 526.

                                             17
the non-disclosure and non-solicitation provisions to the extent

they rely upon the Franchise Agreement’s termination.

                                     1.

      The second clause of the non-disclosure provision requires

“any termination” and could thus only apply in the event that

the   parties’   ended   the   agreement    prior   to   May    9,   2011,   the

natural expiration of the fifteen-year term.                   Being that the

agreement reached its natural conclusion, TCF may not enforce

the second clause of the non-disclosure provision, although this

does not affect its ability to enforce the first clause. 9                   The

non-solicitation     clause     is   similarly      unenforceable      against

Hamden, as it only applied during Hamden’s time as a franchisee

and “for 2 years after [the agreement’s] termination or after

its assignment or transfer[.]”            Thus, having read “expiration”

      9
        The unenforceability of this second clause may not
substantively reduce TCF’s ability to protect its confidential
information.       The  first    clause   prohibits   Hamden    from
1) communicating TCF’s trade secrets to another or 2) otherwise
using them for his gain, unless TCF permits him to do so. The
second clause    requires   Hamden    to  “never”   use   the   same
information to design, develop, or operate any business
“specializing   in   appearance   technologies.”      The   use   of
information to design, develop, or operate a business in the
same business as TCF would require either communication to
another or use for Hamden’s own gain.             The substantive
difference appears to be that a natural expiration of the
Franchise Agreement could result in permissive use of TCF’s
confidential information, whereas a premature end would not
leave such a possibility.     Accordingly, it seems unlikely that
Hamden could perform the actions proscribed in the second clause
in a manner than does not run afoul of the first.

                                     18
as   falling       beyond    the    bounds     of    “termination,”       the    non-

solicitation clause does not apply to Hamden.

                                          2.

     However, the district court erred in finding that the first

non-disclosure clause did not apply to Hamden. 10                  The first non-

disclosure clause operates “[d]uring the term of the Franchise

Agreement    and     thereafter[.]”          The    parties   agree     that    Hamden

fulfilled      his     requirements        and      the   franchisor-franchisee

relationship endured for the full fifteen-year term.                      Unlike the

remaining clauses in dispute, termination is not required to

trigger     this     restriction.         Accordingly,        at   no   time    after

entering    the    agreement       can   Hamden,    without    TCF’s    permission,

“communicate directly or indirectly, divulge to or use for [his]

benefit or the benefit of any other person or legal entity”

TCF’s     proprietary       and    confidential      trade     secrets.         Hamden

concedes the validity of this first clause of the non-disclosure

provision and its application to him.                At no point does he argue

that the substantive restrictions imposed thereby rendered it

     10
        The district court’s discussion did not explicitly find
error in the first clause. Rather, the court noted, only after
analyzing both clauses, that “Hamden has either already complied
with the non-disclosure clause or is not bound by its
restrictions.”    However, the district court concluded its
opinion by finding that “he is not bound by any of the
restrictive covenants in the Franchise Agreement or Non-
Competition Agreement.”    Thus, we read the court’s ruling to
have stricken the entirety of the non-disclosure clause.

                                          19
unenforceable.      The fact that Hamden fully complied with the

covenant as of the time of the district court’s decision does

not   lift   the   restriction.    “Thereafter”   denotes   indefinite

continuance in the future.        Thus, the district court’s ruling

that the first clause of the non-disclosure provision no longer

applied was erroneous.

                                  IV.

      To conclude, we find that termination did not encompass

expiration at the end of the fifteen-year term.        However, part

of the non-disclosure covenant applies upon expiration.        Hence,

Hamden remains bound by the first sentence of the non-disclosure

provision.

                                                    AFFIRMED IN PART;
                                                     REVERSED IN PART

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