Chicago, Illinois. The contract primarily was performed in Indiana at Fiber Bond's Michigan City, Indiana headquarters. Gutreuter did perform some of his employment duties in Ohio because it took approximately six months to wind down the Kleen Line business following the sale. Likewise, the situs of the subject matter of the contract was Indiana and Ohio. Fiber Bond is incorporated in Illinois; however, its principal place of business is in Indiana. The Gutreuters now reside in Kansas and Air Technologies is a Kansas corporation with its principal place of business in Kansas. The application of these factors demonstrates that Indiana has the most significant contacts with this litigation. Accordingly, this Court will apply Indiana law.
In Donahue v. Permacel Tape Corp., 234 Ind. 398, 127 N.E.2d 235 (1955), the Indiana Supreme Court discussed the validity and enforceability of agreements which restrict competition. In Donahue, the Indiana Supreme Court stated that the issue of the validity of an agreement in restraint of trade is a question of law which the courts must decide. Id., 234 Ind at , 127 N.E.2d at 239. In deciding this issue, courts must examine the language of the covenant and the circumstances surrounding its execution. Id., 234 Ind. at , 127 N.E.2d at 237. With respect to restrictive covenants which are ancillary to the sale of a business, such covenants will be enforced if the covenants are reasonable and if the covenants are limited to the area of the business sold. See Young v. Van Zandt, 449 N.E.2d 300, 304 (Ind. Ct. App. 1983). The reasonableness of the covenant is measured in terms of time, the geographic scope and the prohibited activity. Id. If the scope of the covenant is broader than is necessary to protect the goodwill of the business sold, the covenant is invalid. See Donahue, 234 Ind. at , 127 N.E.2d at 238; Young, Ind. App. at , 449 N.E.2d at 304. If the covenant is invalid, the court may not, under the guise of interpretation, modify its terms so that the covenant can be enforced, see Young, Ind. App. at , 449 N.E.2d at 304; however, where the covenant is separated into clauses and some clauses are enforceable, the court may strike the invalid clauses and enforce the valid clauses. Id. In this particular case, the terms of the Non-Competition Agreement are overbroad, not subject to redaction and, thus, unenforceable. In the Non-Competition Agreement, the Gutreuters and Kleen Line agreed not to compete with Fiber Bond for a period of four years following the sale of Kleen Line to Fiber Bond. In addition, Keith Gutreuter agreed not to compete with Fiber Bond for a period of two years after the termination of his employment relationship with Fiber Bond.
The Non-Competition Agreement precludes Keith Gutreuter from having an interest in or assisting in any way any "Filter Products Business within a radius of five hundred (500) miles of the City of Michigan City, Indiana or the City of Newark, Ohio, unless such Filter Products Business shall be confined to a single metropolitan statistical area." If we were to enforce the Non-Competition, Keith Gutreuter would be unable to seek employment in the filter products market in all of thirteen states and the District of Columbia and parts of thirteen other states and parts of Canada.
Clearly, this covenant is not limited in a way that protects the goodwill of Kleen Line, which was sold to Fiber Bond. Kleen Line manufactured pleated air filters. Fiber Bond concedes that it manufactures air filter products other than pleated air filters. Fiber Bond argues that the Non-Competition Agreement is drafted to protect both the Kleen Line goodwill Fiber Bond purchased and the confidential information and trade secrets which pertain to its other product lines. While goodwill can include confidential information or trade secrets, Keith Gutreuter has demonstrated that much of the information that Fiber Bond claims as confidential is in the public domain. Furthermore, Keith Gutreuter has demonstrated that he has obtained much of this "confidential knowledge" through his twenty-five year career in the filter products industries. As the Donahue court acknowledged, knowledge, skill and information gleaned over time by virtue of one's employment in a particular field becomes part of the employee's personal equipment. See Donahue, 234 Ind. at , 127 N.E.2d at 240. This knowledge may not be used by Fiber Bond to buttress an overbroad Non-Competition Agreement. Furthermore, the terms of the Non-Competition Agreement are not divisible. The "limiting" subclause which would allow Keith Gutreuter to operate a business in a single metropolitan statistical area is part of the clause defining the geographical scope of the covenant. This subclause is not divisible from the geographic definition and its inclusion does not "save" this Non-Competition Agreement. Accordingly, we hold that the Non-Competition Agreement is unenforceable because its geographic scope is overbroad.
For the reasons stated in this Opinion, plaintiff and counterdefendant Keith Gutreuter's motion for summary judgment on count II of his complaint is granted. Also, count IV of defendant and counterplaintiff Fiber Bond Corporation's counterclaim is dismissed without prejudice.
IT IS SO ORDERED.