Gordon Termite Control v. Terrones

Opinion

KINGSLEY, Acting P. J.

Defendant appeals from an adverse judgment in an action on an alleged contract not to compete. We reverse the judgment.

Defendant was employed by plaintiff as a “sales, service and managing” employee over a period of 10 years prior to March of 1972. His employment was terminated for one day when he was rehired under a written agreement reading as follows:

[178]

“Subject: Re-employment For Frank Terrones

“Mr. Frank Terrones is being re-employed as of March 3, 1972 after a termination of approximately 24 hours, at the same base salary and commission basis on which he was previously paid.

“The purposes of this agreement is a statement by Mr. Terrones that should he terminate with Gordon Termite Control at any time in the future that he will not call on any accounts called on while with Gordon Termite Control. Should this paragraph be breached, he agrees to pay Gordon Termite Control the sum of $50.00 per account that he calls on.”

He continued to work under that agreement until October 7, 1974. On October 9, 1974, plaintiff sold its pest control accounts to Stanley Pest Control Company for a consideration of $13,200, payable in three installments of $4,433.40. Allegedly because of defendant’s activities as an employee of a third pest control business, 211 of the Gordon accounts were cancelled. Gordon and Stanley settled Stanley’s claim for the cancellation of those accounts by cancelling (with Gordon’s consent) the final installment of the purchase price. Gordon then sued defendant for the amount thus lost to it and recovered judgment in that amount plus costs. We reverse that judgment.

I

Because we conclude that the agreement relied on by Gordon was illegal and void, we need not, and do not, discuss various collateral matters argued in the briefs.

Section 16600 of the Business and Professions Code, provides as follows: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”