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Jewel Paint & Varnish Co. v. Walters





Appeal by defendant from the Circuit Court of Kane county; the Hon. CHARLES A. O'CONNOR, Judge, presiding. Heard in this court at the October term, 1949. Decree affirmed. Opinion filed January 10, 1950. Released for publication February 9, 1950.


In the summer of 1942, the defendant, John H. Walters, then seventeen years of age, was first employed by the plaintiff, Jewel Paint & Varnish Company, and worked in the shipping department in its Chicago factory. His duties consisted of packing and painting cases of paint for shipment. In 1943, he entered the military service of the United States and remained in service until discharged in December 1945. In March 1946, he resumed his work with the plaintiff, and at that time his duties consisted of taking care of the machinery, greasing, and painting it. In July 1946, he was transferred from the Chicago plant to the Elgin retail store of the plaintiff, and his duties there were to unpack the cartons of paint, put the paint on the shelves, wait on the trade, meeting the customers of the store and looking after the sale of the merchandise of the company. He continued in this work from July until November or December of that year. His hours of employment were from 7:30 in the morning to 5:30 in the afternoon, and his wages were $35 per week. His employer is a small chain of paint stores. Clarence Dagler was the manager of the store at Elgin, and Dominic Francimor was supervisor of the several retail stores of the plaintiff then located at Elgin, Aurora and Joliet. At the time of the hearing, in addition to those three stores, the company also had stores at Ottawa and Danville. In November or December 1946, defendant became manager of the Elgin store, and his duties were to wait on the trade, make up the daily reports, make records of the merchandise sold, unpack the paint, place it on the shelves, and also make up a daily report showing the amount of business done that day including the amount of cash sales and, also, the charge service. In addition to the daily reports, he also made up monthly and yearly reports, and for his services he received a salary of $45 per week which was subsequently increased to $55 per week.

On or about August 15, 1947, the following agreement was executed:

"This Agreement made and entered into this 15th day of August, 1947, between John H. Walters, hereinafter sometimes referred to as the `Employee' and Jewel Paint & Varnish Co., a corporation, organized and existing under the laws of the State of Illinois, having its principal place of business located at 345 North Western Avenue, Chicago Ill., hereinafter sometimes referred to as the `Company,'


That for and in consideration of the sum of One Dollar ($1.00) and other good and valuable considerations, the receipt whereof is hereby acknowledged, and the mutual covenants herein contained, It is Agreed as follows:

1. The Company does hereby employ John H. Walters, and said Employee does hereby agree to work for the Company as Manager of its retail paint and wallpaper store in Elgin, Ill., at a salary of Forty-Five Dollars ($45.00) per week. As additional compensation, the Company agrees to pay annually to the Employee after the close of the Company's books at the end of its fiscal year (November 30th) twenty per cent (20%) of the net operating profits earned by the store managed by the said Employee from December 1, 1946 to November 30th, 1947, and during the twelve (12) months preceding each November 30th thereafter.

The amount due the Employee as such additional compensation shall be based upon an audit by the firm of certified public accounts employed by the Company for general audit purposes.

2. In the event the Company transfers the Employee from one of its stores to another in the course of any fiscal year, the Employee shall receive his pro-rata share of the net operating profits of the store or stores managed by himself, according to the number of months the store or stores was or were under his management. For this purpose, any period of less than fifteen (15) days shall be considered one-half month, and any part of a month in excess of fifteen (15) days, shall be considered a full month.

3. Either the Employee or the Company may, at his or its option, terminate this agreement at any time, by two (2) weeks' notice either verbally or in writing. Such notice shall be given to the Company at 345 N. Western Avenue, Chicago, Ill., and to the Employee at his place of employment.

4. It is understood that the Company's fiscal year runs from December 1st to November 30th, and should the Employee elect to terminate this contract as of any date prior to November 30th of any year, he shall thereby waive any claim for the additional compensation referred to above, and shall be limited with respect to the fiscal year in which he so terminates this agreement to the weekly salary due him under this agreement.

5. In the event the Company elects to terminate this agreement prior to November 30th of any year, the Company shall, in addition to the weekly salary due at the date of termination, pay to the Employee within thirty (30) days after employment ceases, his pro-rata share of the twenty per cent (20%) of the net operating profit earned by the store or stores managed by him during the then current year, up to the date employment ceases, as shown by the Company's accounting records. This pro-rata payment of twenty per cent (20%) of said net earnings shall, together with the weekly salary as heretofore provided, constitute full and complete settlement of all claims and demands.

6. In consideration of the compensation arrangements hereby covenanted, the Employee hereby covenants and agrees to devote his full time, energies, knowledge and abilities to the management, operation and development of the business of the retail store at which he is employed, to the exclusion of all other personal business interests unless otherwise in writing agreed, and the Employee shall conscientiously and diligently perform all required acts and duties and faithfully discharge all responsibilities entrusted to him as store manager.

7. The Employee covenants and agrees that in event of the termination of his employment, either by himself, or by the Company, for any reason whatsoever, he shall not, either directly or indirectly on his own account, or in the service of others, engage in the sale distribution, or promotion of the sale of paint, wallpaper and decorating materials, or communicate any information about the Company's business to any person, firm or corporation, within two (2) years from the date his employment with the Company ceases, within an area of ...

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