Court Opinion

ID: 9540103
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:12:49.511371+00
Date Added: 2024-06-11T14:59:36.861494
License: Public Domain

Manoukian, J.,
concurring:
I agree with this court’s determination that Torres is not bound under the purported prohibitory covenant. I also agree that we should not disturb on appeal a correct decision of a lower court even if it is based on erroneous grounds. Nelson v. Sierra Constr. Corp., 77 Nev. 334, 343, 364 P.2d 402, 406 (1961). However, in affirming the declaratory judgment, I believe it is imperative to identify the legal theory upon which the case should have been decided. It is particularly important to do so here, because our decision will reach well beyond the instant case. This state’s main industry is gaming and there is intense and sometimes unwholesome competition among major establishments and among key gaming employees. The significant public interest in this case does not determine its outcome, but such interest does warrant identification of the dispositive legal theory.
The Riviera and Torres entered into an employment contract under which he was to serve as Riviera’s chief operating officer for five years. Prior to the expiration of the employment period, Torres learned that the contract he had signed apparently contained a lifetime post-employment covenant not to compete. In the final year of Torres’ employment, Riviera offered him subsequent employment, however, the two parties could not agree on terms. After completing his five year commitment, Torres terminated his employment.
During the trial, the court assumed that the employment contract contained a lifetime post-employment prohibition against competition. Based upon this assumption, the trial *404judge ruled that the covenant not to compete was unreasonable and unenforceable.
An agreement by an employee not to compete is generally considered in restraint of trade and therefore unenforceable, unless reasonable in scope and breadth. Ellis v. McDaniel, 95 Nev. 455, 458, 596 P.2d 222, 224 (1979); Hansen v. Edwards, 83 Nev. 189, 191, 426 P.2d 792, 793 (1967). “[Pjost employment anti-competitive covenants are scrutinized with greater care than are similar covenants incident to the sale of a business.” Ellis, supra, at 459, 596 P.2d at 224.
As the majority notes, however, the trial court’s interpretation of subsection 4.1 as creating a life-time prohibition against Torres from competition with the Riviera was erroneous, and thus, we are not required to assess the reasonableness of the covenant.
It is important to point out that the trial court’s error was its failure to perceive the conditional nature of the contract provision in question. Generally, provisions of a contract will be construed as mutually dependent and concurrent promises and not as conditions precedent, unless the language “plainly requires” the latter construction. Rubin v. Fuchs, 459 P.2d 925, 928 (Cal. 1969). The language of subsection 4.1 explicitly provides that the non-competitive provision of the contract is effective only during “the period, if any,” in which Torres is receiving compensation pursuant to section 2.4.1 The non-competitive clause contains language that is clearly prefatory to any liability. Specifically, the terms made Torres’ election of retirement compensation a condition precedent to his being bound under the covenant not to compete. Torres chose not to receive such benefits and therefore was not bound by the covenant because there was no period of time “during which Torres [was] being compensated pursuant to Section 2.4.”
I agree that appellant’s remaining contentions are without merit, and concur in the result affirming the declaratory judgment.

Section 2.4 essentially provided that Torres could receive a $25,000 retirement annuity upon the completion of his employment with Riviera.