Runzheimer Int'l, Ltd. v. Friedlen

862 N.W.2d 879 (2015)

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Nature of the Case

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Facts

D had worked for P for more than fifteen years when P required all of its employees to sign restrictive covenants. D was given two weeks to review the covenant, after which D was required to sign it or be fired. The restrictive covenant included the following terms: 1. Confidentiality Obligations. . . . After the end, for whatever reason, of Employee's employment with the Company, Employee will not directly or indirectly use or disclose any Trade Secret of the Company. For a period of 24 months following the end, for whatever reason, of Employee's employment with the Company, Employee will not directly or indirectly use or disclose any Confidential Information of the Company. Nothing in this Agreement shall prevent Employee, after the end of employment with the Company, from using general skills and knowledge gained while employed by the Company. 4. Post-Employment Non-Solicitation of Restricted Customers. For 24 months following the end, for whatever reason, of Employee's employment with the Company, Employee agrees not to directly or indirectly sell or attempt to sell to any Restricted Customers any goods, products or services of the type or substantially similar to the type Employee sold, marketed, produced or supported on behalf of the Company during the 12 months prior to the end of the Employee's employment with the Company. 5. Post-Employment Restricted Services Obligation. For 24 months following the end, for whatever reason, of Employee's employment with the Company, Employee agrees not to directly or indirectly provide to any Competitor Restricted Services or advice or counsel concerning the provision of Restricted Services in the geographic area in which, during the 12 months prior to the end of the Employee's employment with the Company, Employee provided services or assisted any Company employee or agent in the provision of services to or on behalf of the Company. D signed and worked for more than two years before being terminated in 2011. D then sought employment at Corporate Reimbursement Services (CRS), a competitor of P. P sued both D and CRS, alleging a breach of the restrictive covenant. Ds moved for summary judgment in that the covenant was unenforceable because it lacked consideration. It was eventually granted on a second motion. The court ruled that P's promise not to fire D immediately if he signed the restrictive covenant was an illusory promise and did not constitute consideration to support the agreement because P retained 'the unfettered right to discharge D at any time, including seconds after D signed the Agreement.' P appealed.