Court Opinion

ID: 9569347
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:13:04.379264+00
Date Added: 2024-06-11T11:50:23.868177
License: Public Domain

*225Justice Meyer
dissenting.
Plaintiffs first claim against defendant in this lawsuit sounds in tortious interference with contract. In its opinion in this case, the majority holds in part that, because competition in business constitutes a justification for interfering with the contractual relationships of others, plaintiffs lawsuit against defendant must fail as a matter of law. It is my sincere belief that the law of North Carolina is not now, nor should it ever be, that business competition is recognized as a legal justification for behavior such as that displayed by defendant here. This case, in my view, was for the jury, and accordingly, I dissent.
The case, as a procedural matter, is before us by virtue of the trial judge’s decision to grant defendant Hooks’ motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. I note as an initial matter that the burden of the movant in a case such as that before us is substantial. A claim for relief should clearly not suffer dismissal unless it affirmatively appears that plaintiff is entitled to no relief under any state of facts which could be presented in support of the claim. See Presnell v. Pell, 298 N.C. 715, 260 S.E. 2d 611 (1979). Moreover, in construing the complaint, the accepted rule is to construe it liberally, with every reasonable intendment and presumption in favor of the plaintiff. Childress v. Abeles, 240 N.C. 667, 84 S.E. 2d 176 (1954).
As the majority opinion correctly indicates, this Court, in its opinion in Childress, explained the nature of a claim for tortious interference with a contract. We defined its elements as follows:
First, that a valid contract existed between the plaintiff and a third person, conferring upon the plaintiff some contractual right against the third person. Second, that the outsider had knowledge of the plaintiffs contract with the third person. Third, that the outsider intentionally induced the third person not to perform his contract with the plaintiff. Fourth, that in so doing the outsider acted without justification. Fifth, that the outsider’s act caused the plaintiff actual damages.
Id. at 674, 84 S.E. 2d at 181-82 (citations omitted). The majority, concluding in essence that under no set of facts presented by plaintiff could defendant have acted without justification, held *226proper the trial court’s decision to grant defendant’s motion to dismiss pursuant to Rule 12(b)(6). I simply do not agree, for, in my view, all five of these prerequisites were potentially satisfied, and the case was therefore for the jury.
Before reaching the question of justification, I note as an aside that there is no question but that, employment contracts at will are not treated any differently vis-a-vis the action in question here. In Childress v. Abeles, 240 N.C. 667, 84 S.E. 2d 176, this Court held that the mere status of the contract as terminable at will does not defeat the plaintiffs cause of action for tortious interference. In so holding, our Court relied on the reasoning of the United States Supreme Court in the case of Truax v. Raich, 239 U.S. 33, 60 L.Ed. 131 (1915). In that case, it stated that “[t]he fact that employment is at the will of the parties, respectively, does not make it one at the will of others. . . . [B]y the weight of authority, the unjustified interference of third persons is actionable although the employment is at will.” Id. at 38, 60 L.Ed. at 134.
As for the question of justification, I believe strongly that the majority is incorrect in its conclusion that competition in business such as that allegedly motivating defendant in this case is, under North Carolina law, a legal justification serving to eviscerate this or any other plaintiffs cause of action for tortious interference with contract. In my view, the law in this State is, and should be, that business competition is not such a justification and that, accordingly, cases such as that before us are not dismissible as a matter of law, but rather, are best left with a jury for decision.
It is admitted that this issue — specifically, whether business competition is a justification for interfering with the contractual relations of others — has produced divergent points of view amongst the jurisdictions of this nation. The majority quite correctly indicates that the law of several states and the view of the Restatement (Second) of Torts are supportive of its position in this matter. Moreover, citing dicta in this Court’s decision in Childress v. Abeles, 240 N.C. 667, 84 S.E. 2d 176, it claims further that the law of our own State is consistent with the idea of business competition as a legal justification for contract interference. I take issue with this latter claim in the majority opin*227ion. In fact, the law currently is, and certainly should continue to be, to the contrary.
Though this Court has not addressed anything approaching the issue before us today since the Childress case, our own Court of Appeals has applied the reasoning from that decision on several occasions. In Overall Corporation v. Linen Supply, Inc., 8 N.C. App. 528, 174 S.E. 2d 659 (1970), for example, plaintiff and defendant were corporate competitors in the industrial laundry business. Defendant induced one of plaintiffs employees to breach an employment contract as a route salesman with plaintiff and to enter a similar contract with defendant. The employee in question then solicited the business of plaintiffs customers, inducing them thereby to breach their contracts with plaintiff for laundry service. The Court of Appeals, in upholding plaintiffs award against defendant for tortious interference with contract, made the following significant statement:
We see no valid reason for holding that a competitor is privileged to interfere wrongfully with contractual rights. If contracts otherwise binding are not secure from wrongful interference by competitors, they offer little certainty in business relations, and it is security from competition that often gives them value.
Id. at 531, 174 S.E. 2d at 661. This position, which the Court of Appeals subsequently affirmed in Moye v. Eure, 21 N.C. App. 261, 204 S.E. 2d 221 (1974), is one with which I agree.
If there is uncertainty as to what the law is in North Carolina on this question, there can be, in my view, no question as to what the law should be. The majority’s position — that business competition justifies interference with contract — is, it seems to me, wrong for a number of significant policy reasons. First, the majority’s holding today is severely at odds with the longstanding and historic principle of freedom of contract. The principle of freedom of contract rests on the premise that it is in the public interest to accord individuals broad powers to order their affairs through legally enforceable agreements. A. Farnsworth, Contracts § 5.1 (1982). In North Carolina, this vitally important principle has long been a part of our jurisprudential heritage. Under our law, parties are free to contract to anything as long as it is not illegal, unconscionable, or against the public interest. Bicycle *228Transit Authority, Inc. v. Bell, 314 N.C. 219, 333 S.E. 2d 299 (1985).
Here, plaintiff sought to “order [its] affairs” by the insertion of legally enforceable covenants not to compete into its employment contracts with defendant and with those employees defendant eventually hired away. By virtue of these employment contracts, the affected employees were forbidden “to work upon or in any way interfere with any part of any account or territory upon which the Agent previously worked in the same State for the Company” for a period of one year. It is undisputed, moreover, that defendant induced the employees not only to terminate their employment contracts with plaintiff, but also to breach the non-compete clauses contained in those contracts. Yet, we are told by the majority that defendant’s egregious conduct which induced the breach was a justifiable and nonactionable action because it was done in the name of business competition. This, in my view, is completely at odds with the important principle of freedom of contract.
Second, the majority opinion, which frustrates the covenant not to compete in this case and will also no doubt frustrate countless others already in existence, is not consistent with this Court’s previous decisions concerning such covenants. Covenants not to compete, in the wake of the majority opinion here, will be eviscerated upon a showing that the breach in question was induced by a party citing business competition as his motivation. This will be particularly unfortunate where, as in some cases, though admittedly not here, defendant’s new employer has gone to such lengths in inducing the breach as to completely insulate the breaching employee from liability by offering to pay any legal fees incurred and any judgment taken against him.
This insidious state of affairs hardly seems to jibe with this Court’s oft-repeated conditional approval of covenants not to compete. Under the law of North Carolina, covenants not to compete are in fact valid and enforceable upon a showing that they are (1) in writing, (2) made a part of a contract of employment, (3) based on reasonable consideration, (4) reasonable both as to time and territory, and (5) not against public policy. See A.E.P. Industries v. McClure, 308 N.C. 393, 302 S.E. 2d 754 (1983). The majority’s position in this case is clearly inconsistent with this tradition.
*229I take final issue with the majority’s position that to allow a claim such as that pursued by plaintiff here would be to severely impede commerce. The majority states specifically that “to restrict an employer’s right to entice employees . . . from their positions with a competitor or to restrict where those employees may be put to work once they accept new employment savors strongly of oppression.” In my view, the majority’s statement is grossly exaggerative, particularly given the facts of the case before us. In essence, under the terms of the covenants not to compete, defendant need wait only a year — a mere twelve months — before “stealing” plaintiff s employees to the benefit of his new employer’s operation. This delay, giving credence to plaintiffs freedom to enter into and expect the enforcement of such agreements, could hardly be considered oppression.
In summary, the majority, in its opinion in this case, holds in part that because business competition is a legal justification for interfering with the contractual relationships of others, plaintiffs cause of action against this defendant must fail as a matter of law. In my view, this is not the law, nor should it be the law, in North Carolina. This case was for the jury, and the trial court therefore erred in entering judgment for defendant pursuant to Rule 12(b)(6). Accordingly, and with due respect, I must dissent.