APPEAL from the Circuit Court of Winnebago County; the Hon.
JOHN E. SYPE, Judge, presiding.
MR. JUSTICE HALLETT DELIVERED THE OPINION OF THE COURT:
The plaintiff instituted this action against his former employer, Curtis 1000, Inc. (Curtis), seeking a declaration that a covenant in his employment contract restraining him from soliciting from former customers or in territory where he had formerly solicited was invalid. He also sought to recover certain sums under a territorial realignment agreement and under a profit-sharing retirement trust. The defendant counterclaimed, seeking injunctive relief. Although a temporary injunction was granted on August 5, 1974, the trial court, after a trial on the merits on October 8, 1974, held the restrictive covenant void as to all areas not involved in the territorial reassignment for want of a valid protectable business interest and awarded the sums sought by the plaintiff. The defendant appeals, contending that the restrictive covenant was valid and enforceable as to the whole territory, that plaintiff was not entitled to payments for the territorial realignment once his employment was terminated and that he forfeited his rights under the retirement fund when he violated the terms of the restrictive covenant. We disagree on all three points and therefore affirm.
At the hearing on the merits, the only testimony was that of the plaintiff, of Mr. Tobin, a Divisional and Regional Manager for Curtis and of Janice Maitland, an employee of Alpine State Bank. There was very little disagreement as to the material facts.
The plaintiff was hired by Curtis sometime in June, 1962, as a salesman, originally on straight salary. He was first sent to Minneapolis, Minnesota, for ten days' training and product familiarization program, during which time his salary was paid. On June 25, 1962, the two parties signed a form employment agreement which contained the following pertinent provisions:
(a) The Salesman's territory or accounts which he is authorized to sell, shall be as follows, subject to correction and modification by the Company:
The following counties in N.W. Illinois: Jo Davies, Carroll, Stephenson, Ogle, De Kalb, Winnebago (except S. Beloit).
(c) It is mutually understood and agreed that one or more additional salesmen may be assigned later in the general area in which the above described territory or accounts are located. When this does occur, the general area, including the above described territory or accounts, will be divided between the Salesman and such other additional salesman or salesmen.
If and when such geographical divisions or individual account reassignments are made, the Salesman protected by this agreement will be compensated during a limited period for the commission earnings on all established business which he relinquishes from the time that such division of territory or accounts becomes effective. The first month after this division becomes effective, the Company agrees to pay as compensation for such territory or account adjustments, a sum of money equal to the actual average monthly commission earnings for the previous twelve months on the established accounts that the Salesman relinquishes. Subsequent monthly payments will be on the following basis:
(i) When this average monthly commission earnings figure is less than $100, subsequent payments to the Salesman will diminish each month by ten percent of the first payment, until the payments run out.
(ii) When this average monthly commission earnings figure is from $100 to $200 inclusive, subsequent payments to the Salesman will diminish by $10 less each month until the payments run out.
(iii) When this average monthly commission earnings figure is more than $200, subsequent payments to the Salesman on the first $200 will be in accordance with (ii); subsequent payments on the amount in excess of $200 will diminish each month by four percent of the first payment, until the payments run out.
(c) The Salesman agrees to keep confidential such information as the Company may, from time to time, impart to him regarding its business affairs (including the names of customers), and agrees that he will not at any time disclose said information in whole or in part to any person not in the employ of the Company. Further, and in consideration of the time and expense incurred by the Company in training the Salesman, and recognizing the highly competitive nature of the Company's business, the Salesman covenants and agrees that, during his employment with the Company and for two years following the termination thereof, he will not, directly or indirectly, either on his own behalf or for others, take or solicit orders for printing, envelopes or other products he has been selling for the Company in any territory in which he has solicited business for the Company or from anyone from whom he has solicited such business."
The Salesman's Profit-Sharing Retirement Plan, inter alia, contained the following provision:
"9. Restrictive covenant. If any participant who has not received distribution of his entire interest in the plan shall commence competition with the Company, then such competition shall be sufficient cause for the discontinuance of any further payments to such participant, and shall result in a forfeiture of all remaining benefits due such participant, except for such amounts as are vested in such participant's accounts (pursuant to Section 3 of Article VII hereof) as the result of the termination of the plan or the discontinuance of contributions by the Company, which amounts may in no event be forfeited. For such purposes, competition shall be deemed to include the engaging as a principal, partner, agent, servant or employee in a business which competes with the business of the Company in any area of the United States served by the Company and in which such employee worked as an employee of the Company during any portion of two years prior to the termination of his employment with the Company and shall be limited to competition which occurs within a period of ...