Summits 7, Inc. v. Lasker

Summits 7 v. Lasker, No. 1328-03 CnCv (Katz, J., Apr. 7, 2004)
[The text of this Vermont trial court opinion is unofficial. It has been
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STATE OF VERMONT SUPERIOR COURT
Chittenden County, ss.: Docket No. 1328-03 CnCv
SUMMITS 7, INC.
v.
STACI LASKER (KELLY)
FINDINGS OF FACT
CONCLUSIONS OF LAW
AND NOTICE OF DECISION
This matter came on for trial April 6, 2004. The parties stipulated
that the expedited hearing would be one on the merits of the claim.
Stipulated facts were submitted by the parties. We will not repeat them
here, although they are adopted and relied upon. We state only findings
additional to those stipulated.
FINDINGS OF FACT
29. Defendant Lasker was hired by Summits to be an accounts
clerk, and was to be paid $10 per hour, or approximately $21,000 per year.
30. Lasker had good experience and background in the graphic
arts.
31. She was put in a graphic arts position, to take advantage of her
knowledge and experience, approximately four months after starting.
32. Lasker assumed greater and greater responsibility in sales and
customer service with Summits, eventually becoming a supervisor. Her
pay grew in accordance with the increased responsibilities, reaching
$39,000 in 2001, $49,000 in 2002, and $19,000 for the first three months
of 2003, by the time she resigned.
33. Although Lasker is apparently correct in her contention that
she received no formal training in the graphic arts industry during her
employment with Summits, we are persuaded she did learn a good deal
about business. Her gracious letter of termination may have been written
with mixed motives, when it alludes to the opportunity to learn and grow.
But it is inherent in business that technical skills are not the be all and end
all of a successful career. Lasker was given new and higher levels of
responsibilities, and we are persuaded she must have learned a good deal
regarding how to handle those responsibilities—a significant business
advantage.
CONCLUSIONS OF LAW
1. Covenants not to compete are enforceable in Vermont.
Johnston v. Wilkins, 2003 Vt. 56 (remanded for issuance of injunction);
Fine Foods, Inc. v. Dahlin, 147 Vt. 599 (1987) (affirming issuance of
injunction).
1 . We have previously indicated that continuation of employment at
will constitutes sufficient consideration to support a newly executed
covenant not to compete. Camco, Inc. v. Baker, 936 P.2d 829, 832 (Nev.
1997) (noting that continuation of at will employment satisfying
consideration is the majority rule); see also F. Tinio, Sufficiency of
Consideration for Employee’s Covenant Not to Compete, Entered into
After Inception of Employment, 51 A.L.R.3d 825 (1973). We continue in
that view. In this case, however, it is really unnecessary to even reach that
conclusion. Defendant Lasker was given substantial promotions and
higher pay during her employment with plaintiff Summits. Either of these
constituted more than reasonable consideration for the required covenants,
even if they were not precisely timed to match the upward steps, or
presented to the employee as the price of such steps. See, e.g., Ikon
Office Solutions, Inc. v. Dale, 170 F. Supp. 2d 892 (D. Minn. 2001)
(consideration for covenant valid when real and additional advantages are
provided).
2 . The foregoing conclusion of course also necessarily rejects
defendant’s argument that she was somehow “coerced” into signing the
onerous covenant. Being required by an employer to enter into such an
agreement, on consideration of continued employment, or even
promotion, if as appears is a legal right of the employer, is not thereby
offensive coercion. See, e.g., Lake Land Emp. Group of Akron, LLC v.
Columber, 804 N.E.2d 27, 32 (Ohio 2004) (“It follows that either an
employer or an employee in an at-will relationship may propose to change
the terms of their employment relationship at any time.”).
3 . Although it may be that the geographic scope of the covenant in
this case is unduly broad, extending beyond the boundaries of Vermont,
we again need not reach this question. Defendant has pursued
employment with a direct competitor of plaintiff, within a short
geographic distance and in precisely the market served by plaintiff. Even
were we to accord a narrow construction to an ambiguous term regarding
the geographic scope of the covenant, it would surely extend beyond her
new employment venue.
4 . Defendant appeals to the court to not make her lose her present
employment, which offends the clear language of the contract, on the
basis of several family considerations. Implicitly at least, she indicated
that as a single mother the restrictions would fall more harshly upon her.
Were that the law, it would tend to cause employers to discriminate
against single mothers in job promotion, for the message would be clear
that covenants not to compete are more enforceable against that group.
We know of no precedent suggesting that the group of single mothers is
entitled to narrow enforcement of covenants not to compete than any other
group.
5 . Next, defendant suggests that her divorce agreement provides
that her substantial custody of two children would be jeopardized if she
had to move outside of Chittenden County. First, that would not be
anything which should be the responsibility of her former employer.
Second, we believe Vermont custody law is, in fact, quite forgiving of
custodial parents who chose to relocate. Lane v. Schenck, 158 Vt. 489(1992) (holding that mother’s decision to relocate to Iowa, to attend law
school, should not cause her to lose sole custody of the children).
6 . Defendant seemed to suggest by her evidence that she should not
be held to the covenants she signed, because the company was not doing
well at the time she chose to leave it. We are aware of no support in
precedent for such a “sinking ship” argument. Defendant’s own salary
and commissions were never either delayed or reduced. Indeed, the
evidence supports the conclusion that it was rising even though the
company may have had to reschedule some payables. Of course, buying
into her theory would jeopardize all sorts of businesses, by making any
temporary downturn the basis for stripping them of their most valuable
asset—the human resources built up and protected by covenants not to
compete.
NOTICE OF DECISION
Plaintiff is entitled to an injunction according to the terms of its
covenant not to compete, barring defendant Lasker from employment with
a direct competitor, such as Offset House, for the proscribed period.
Counsel shall submit such a proposed judgment.
Dated at Burlington, Vermont, _________________, 200__.
__________________________
Judge