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Aristocrat Window Co. v. Randell

FEBRUARY 25, 1965.

ARISTOCRAT WINDOW CO., A CORPORATION, PLAINTIFF-APPELLEE,

v.

RALPH RANDELL AND ARISTOBILT OF CHICAGO, INC., A CORPORATION, DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Cook County; the Hon. JOHN J. LUPE, Judge, presiding. Reversed and remanded with instructions.

MR. JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT.

Rehearing denied March 25, 1965.

The plaintiff herein filed a complaint in equity against Ralph Randell, a former employee of the plaintiff, and Aristobilt of Chicago, Inc., Randell's present employer, asking that defendant Randell be restrained from engaging in competition with the plaintiff for a period of five years within a radius of 300 miles from the place of business of plaintiff in Chicago, Illinois, and that defendant Aristobilt of Chicago, Inc. be restrained and enjoined from employing the defendant Randell for the same period of time and within a radius of 300 miles from the place of business of the plaintiff in Chicago, Illinois.

A motion for the issuance of a temporary injunction was referred to a Master, who heard evidence and filed his report recommending the issuance of the temporary injunction. The court on August 14, 1964, entered a temporary restraining order by which the defendant Randell was enjoined from engaging in any services similar to the type of business conducted by the plaintiff, and the defendant Aristobilt of Chicago, Inc., was restrained and enjoined from employing the said Ralph Randell until the further order of the court. The temporary injunction order of August 14, 1964, placed no limit as to area and on August 17, 1964, an order was entered amending the order entered on August 14, 1964, by inserting the following: "within a radius of 300 miles from the principal place of business of the plaintiff in Chicago, Illinois."

On August 20, 1964, defendant Randell filed a motion to vacate the order of August 14, 1964, and on August 21, 1964, defendant Aristobilt of Chicago, Inc. filed a motion to vacate the order of August 14, 1964. Motions were also made to vacate the order entered on August 17, 1964. The motions of the defendants to vacate the order of August 14, 1964, and the amended order of August 17, 1964 were denied on September 15, 1964, by the court. The defendants appeal from the order entered on September 15, 1964, denying the motions of the defendants Randell and Aristobilt of Chicago, Inc. to vacate the order of August 14, 1964, and the amended order of August 17, 1964, modifying the temporary injunction.

On July 21, 1962, the plaintiff, Aristocrat Window Co., an Ohio corporation, entered into a contract of employment with Ralph Randell, one of the defendants herein. The plaintiff, under the contract, employed the defendant, Ralph Randell, as a branch manager in charge of the company's operations at Chicago, Illinois. Paragraph VIII of the contract reads in pertinent part as follows:

"VIII. TERMINATION —

(a) Either party may terminate this agreement for any reason upon thirty (30) days prior notice in writing given to the other party by certified or registered mail. The Company reserves the right to terminate this contract at any time for cause.

(b) For a period of five (5) years after the termination of this Agreement, the employee will not, within a radius of three hundred (300) miles from the present place of business of the employer, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation or control of any business similar to the type of business conducted by employer at the time of the termination of this Agreement.

It is specifically understood between the parties hereto that in the event the employee shall leave voluntarily or involuntarily the employment of this Corporation, and shall directly or indirectly own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation, or control of any business similar to the type of business conducted by employer, and/or perform services for any person, firm or corporation engaged in a competitive line of business with the employer at the time of the termination of this Agreement, then the employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain damages for any breach of this Agreement, or to enforce the specific performance thereof by the employee, or to enjoin the employee from performing services for any such other person, firm, or corporation during the period herein contracted for; but nothing herein contained shall be construed to prevent such remedy in the courts, in case of any breach of this Agreement by the employee, as the employer may elect to invoke.

In furtherance of the foregoing employee acknowledges that his position is one of trust and that he will procure in the performance of his duties the knowledge concerning the trade methods and trade secrets of the employer, as well as information concerning its customers and pricing methods, and

Employee further acknowledges that he is competent by training and otherwise to procure employment in many other lines non-competitive with that of the employer."

Despite the fact that under the contract defendant Randell was employed as branch manager to be in charge of the company's operations at Chicago, Illinois, the evidence showed that he was in charge of only the north side branch of the company's operations at Chicago, Illinois.

The quoted portion of the contract provided for termination by either party upon thirty (30) days written notice by certified or registered mail, and that only the plaintiff reserved a right of termination for cause. It also provided for a restrictive covenant of non-competition, prohibiting defendant Randell upon termination from being connected in any manner or employed directly or indirectly in any business similar to the type of business of plaintiff for a period of five years thereafter and within a distance of 300 miles.

On March 16, 1963 the plaintiff discharged Randell without previous notice, written or otherwise. The plaintiff contends that Randell was discharged for cause. The defendants contend the contract is lacking in mutuality of obligation because the company is given the right to discharge the defendant Randell for cause, and there is no corresponding obligation on the part of the company, and that at any rate, Randell's discharge was not for cause.

In support of their contention that the contract lacks mutuality, the defendants cite Snyder v. Hamilton, 39 Ill. App.2d 352, 189 N.E.2d 97. In that case the court found that under the contract of employment the employer at any time could discharge the employee and there was no redress on the part of the defendant, and it also held that the law in Illinois is that as a general proposition where one of the parties to an agreement has the absolute right to arbitrarily terminate the contract, mutuality is lacking. However, in this case the contract does not give the employer the arbitrary right to terminate the contract. It gives the employer only a right to discharge the employee upon notice or for cause. We do not believe the law supports the defendants in their first contention and we ...


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