Court Opinion

ID: 9586880
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:16:05.223537+00
Date Added: 2024-06-11T17:32:54.667438
License: Public Domain

NEELY, Justice
dissenting:
I dissent because today’s decision opens the door for vexatious litigation that will frustrate legitimate business interests and make it impossible for both employers and employees to bargain about their commercial relationship. In Reddy v. Community Health Foundation, 171 W.Va. 368, 298 S.E.2d 906 (1982), this court held that reasonable covenants not to compete are not *218contrary to public policy. We further held that the reasonableness of any particular covenant is a question of fact. Thus, it is quite possible for an employer to enter into an agreement with a good-faith belief that it is proper only to learn later that a court has declared it unlawful. In fact, the employer may enter into the agreement with the willing compliance of the employee. The record indicates that the current case fits this scenario. Nevertheless, the majority opinion would allow an employee who breaches such a deal to sue his employer for a tort!
The majority’s opinion holds that a mutual, voluntary commercial agreement becomes a tortious act when a court finds the contract unenforceable. Neither precedent nor logic supports such a holding. If a buyer enters into a contract with a seller to purchase 500 bushels of wheat and the entire wheat crop is devastated by drought, a court may hold the contract unenforceable under the doctrine of impossibility. It could not, however, require the buyer to pay damages to the seller for placing him in that unenviable but unforseen position. Under the logic of today’s opinion, however, such an award would be allowed.
The majority admits in their opinion that they are unable to find case law directly supporting their position. I hope I can be forgiven if I do not feign surprise. Most cases involving interference with contractual relations involve three parties: an employee who breaches or contemplates a breach, an employer against whom the breach is perpetrated, and a third party who seeks to enter into an agreement with the breacher. There are a good many cases in which the party against whom the breach is perpetrated sues the third party alleging interference with an established contractual relationship. There are also numerous decisions in cases where the third party has sued the employer for precluding him from negotiating with the prospective breacher. There is, however, an understandable dearth of cases in which the breacher attempts to sue the victim of the breach for allowing him to make a bargain that the breaching party no longer finds satisfying. As the ancient legal principle reminds us: “Nemo ex proprio dolo consequitur actionem. ”
The majority is apparently undisturbed when it confounds this sound principle of law. Indeed today’s opinion makes it not only possible but probable that parties will profit from their own wrongs. In Reddy, supra, we noted that it is dangerous to void all covenants not to compete. Striking all such covenants would: (1) deter employers from providing valuable training to their employees because they could not be assured of adequate compensation; (2) make the protection of trade secrets difficult; and, (3) allow employees to carry away to competitors goodwill that was purchased with the assets of a former employer. Yet today’s decision does not stop at creating a system in which employers must be leery about the enforcibility of their bargains with employees: it advocates a system in which employees have a positive incentive to enter into agreements that they have no intention of keeping because their own decision to breach will give them a right to sue for damages under a tort theory.
The law we make concerning the resolution of in-court litigation has a dramatic effect on the way commercial parties organize their affairs outside of court. Precedents like today’s have a chilling effect on commerce. Business entities must operate according to predictable rules if the wheels of commerce are to turn smoothly. If a corporation can enter into an agreement with an employee that safeguards its business secrets or assures that its investment in the employee’s training in some specialized field will not be used to the profit of its competitors, it is in the interests of the company to provide such training and to enhance human potential. Corporations are not charitable associations, however, and it would be unfair to their stockholders to expect them to extend such valuable training if the attempt to protect their investment will be treated as a wrongful, tortious act.
The majority recognizes that today’s decision will inevitably “severely curb” the use of restrictive covenants in employment *219contracts. They argue that the effect will be to lead to narrowly drawn covenants not to compete and to avoid “frivolous” ones. The majority’s sublime belief that a carefully drafted covenant not to compete will always be found acceptable hardly comports with experience. The one constant about trials is their unpredictability. By giving a party who breaches a covenant not to compete the blunt instrument of tort damages to wield against his or her employer, this court’s ruling assures that courts will often face the nebulous question of reasonableness, or alternatively that employers will be forced into settling claims that have little or no merit. In short, by turning a contractual breach into a tortious injury this court has made a form of agreement that can be beneficial to both employers and employees so fraught with danger and uncertainty that it is no longer a viable commercial option.
The law of contracts and the law of torts have entirely different ramifications. When a contract is held invalid for any reason — lack of consideration, unconsciona-bility, impossibility, unreasonableness, vagueness — the measure of loss is limited by the value of the contract. The risk that such a loss will occur is measureable and predictable. In tort law by contrast, the loss is measured by criteria completely within the control of the party sustaining the loss.
If Ms. Torbett had received an offer of a $500,000 a year salary, from an employer and had turned it down because of her idiosyncratic desire to remain with Wheeling Dollar Savings and had later changed her mind, she would be entitled to recover that entire lost salary as damages in a tort action because it is hornbook law that the tort feasor takes his victim as he finds her. There is no duty to mitigate damages. In fact, the tort “victim” could seek punitive damages from the dastardly robber-barron who extracted an agreement of job security from her in exchange for a mere 25% raise. Consider the pain and suffering! It is hard to overstate the amount of uncertainty that such a rule introduces into commercial dealings.
Furthermore, the case before us presents a singularly inappropriate instance for formulating extraordinary employee remedies. It is possible to imagine cases in which a worker is hopelessly overmatched in negotiations with his employer and is forced to sign a Draconian restrictive covenant, but those are not the facts of this case. Ms. Torbett had been employed in a responsible position with the defendant for more than five years. The negotiations that led to the contract she now breaches were commenced at her insistence. It was Ms. Tor-bett, and not the bank, who went into those bargaining sessions with the trump card. She had been offered another job and insisted that her salary be raised twenty-three percent and that she be given an assistant. The bank acceeded to both of those demands. When she was later asked to sign a formal written agreement, that contract also included the restrictive covenant. She was aware of the clause at the time and protested its inclusion; but because the agreement was on balance so beneficial to her interests she chose not to cavil over one unattractive clause. Given the terms she was being offered, one can hardly characterize her determination as ill-advised or the resulting agreement as unconscionable.
I do not believe that it is unreasonable for an employer who has acceded to an employee’s demand for a salary increase of twenty-three percent and has also agreed to incur the additional expense of hiring an assistant for her in order to retain her services in a department that is notoriously dependent on customer goodwill to request some formal assurance from her that she will not sell the bank’s goodwill to another bank by leaving and taking customers with her. Although that is my understanding of the facts of this case, I would not quarrel with a court decision voiding the restrictive covenant. Reasonable men can differ on the interpretation of facts in a particular case. This court’s decision goes beyond reason, however, when it establishes a general rule that such a clause is a tortious injury to the person who voluntarily accept*220ed it. That is bad law; but it is even worse business practice. I must dissent.