Opinion
No. CV 03 081901
July 22, 2003
MEMORANDUM OF DECISION RE APPLICATION FOR TEMPORARY INJUNCTION
The plaintiff, Century 21 Access America, brings this action against a former employee, Nereida Lisboa, seeking a permanent injunction to enforce a covenant not to compete. Presently before the court is the plaintiff's application for a temporary injunction, filed on May 15, 2003.
Based on the evidence presented at an evidentiary hearing held on June 9, 2003, the court finds the following facts. The plaintiff is a residential real estate sales company with a principal place of business at 138 Broad Street, Milford, Connecticut. The defendant, a licensed real estate agent, became associated with the plaintiff as a salesperson in April 2002. At that time, the plaintiff and the defendant signed an independent contractor agreement on April 24, 2002, outlining the parties' respective rights and obligations. The defendant read and initialed each page of the agreement. Paragraph twelve of that agreement provides in relevant part: "Salesperson agrees and covenants that during the two . . . year period commencing on the date at termination of Salesperson's affiliation with Company, whether or not Salesperson's employment under this Agreement is terminated by either party and for any reason Salesperson shall not engage in or carry on, directly or indirectly any business within a fifteen (15) mile radius of Milford, Connecticut during the term that this Paragraph shall be in effect similar to or competing with any business or products carried on by Company, or any parent, subsidiary or affiliate or any successor now or at any time during Salesperson's employment."
In April 2003, approximately one year after being hired, the defendant gave written notice that she was resigning from her position with the plaintiff. The defendant immediately began working for William Raveis Real Estate, a direct competitor of the plaintiff with an office directly across the street from the plaintiff's Milford office where the defendant had worked. CT Page 8453-ei
On May 15, 2003, the plaintiff filed the present application for a temporary injunction seeking, inter alia, to restrain the defendant from any attempts to take the plaintiff's customers and from entering into competitive employment in violation of the covenant not to compete. Subsequent to the evidentiary hearing on June 9, 2002, the parties filed simultaneous post-hearing briefs on June 30, 2002.
DISCUSSION
"The principal purpose of a temporary injunction is to preserve the status quo until the rights of the parties can be finally determined after a hearing on the merits." (Internal quotation marks omitted.) Clinton v. Middlesex Mutual Assurance Co., 37 Conn. App. 269, 270, 655 A.2d 814 (1995). The standard for the granting of a temporary injunction in Connecticut is well settled. "In general, a court may, in its discretion, exercise its equitable power to order a temporary injunction pending final determination of the order, upon a proper showing by the movant that if the injunction is not granted he or she will suffer irreparable harm for which there is no adequate remedy at law . . . In exercising its discretion, the court, in a proper case, may consider and balance the injury complained of with that which will result from interference by injunction." (Citations omitted; internal quotation marks omitted.) Moore v. Ganim, 233 Conn. 557, 569, n. 25, 660 A.2d 742 (1995). There is a four-part test for the issuance of a temporary injunction: "(1) the plaintiff ha[s] no adequate legal remedy; (2) the plaintiff would suffer irreparable injury absent [the injunction]; (3) the plaintiff [is] likely to prevail . . .; and (4) the balance of the equities favor[s] the issuance of the injunction]." Waterbury Teachers Assn. v. Freedom of Information Commission, 230 Conn. 441, 446, 645 A.2d 978 (1994).
The standard for granting a temporary injunction to enforce a covenant not to compete, however, is somewhat different in that the plaintiff does not need to prove irreparable harm. "While ordinarily proof of imminent harm is essential, in this type of case there is no such requirement. It has long been recognized in this state that a restrictive covenant is a valuable business asset which is entitled to protection . . . Irreparable harm would invariably result from a violation of the defendant's promises . . . The reason for this is that such a plaintiff's actual injury is not susceptible of determination to its entire extent but is estimable largely by conjecture and prediction." (Citations omitted; internal quotation marks omitted) Sagarino v. SCI Connecticut Funeral Services, Inc., Superior Court, judicial district of New Britain, Docket No. 499737 (May 22, 2000, Aurigemma, J.), 27 Conn.L.Rptr. 281, quoting Gartner CT Page 8453-ej Group, Inc. v. Mewes, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. 118332 (January 3, 1992, Mottolese, J.) ( 7 C.S.C.R. 275), 5 Conn.L.Rptr. 411; see also Merryfield Animal Hospital v. Mackay, Superior Court, judicial district of New Haven, Docket No. 464586 (July 31, 2002, Hadden, J.T.R.), 32 Conn.L.Rptr. 652; Musto v. Opticare Eye Health Centers, Superior Court, Complex Litigation Docket at Waterbury, Docket No. 155663 (August 9, 2000, Hodgson, J.).
The standard is also different in that the plaintiff does not have to demonstrate that there is no adequate remedy at law. "[W]hile the plaintiff could maintain a claim for damages as to each violation that causes injury the difficulty of proof and the inefficiency of repetitive suits render inadequate the use of successive remedies at law, and injunctive relief is therefore warranted to protect the plaintiff from harm which the restrictive covenant was intended to prevent." (Citations omitted; internal quotation marks omitted.) Sagarino v. SCI Connecticut Funeral Services, Inc., Superior Court, judicial district of New Britain, Docket No. 499737 (May 22, 2000, Aurigemnia, J.), quoting Gartner Group, Inc. v. Mewes, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. 118332 (January 3, 1992, Mottolese, J.) ( 7 C.S.C.R. 275); see also Merryfield Animal Hospital v. Mackay, Superior Court, judicial district of New Haven, Docket No. 464586 (July 31, 2002, Hadden, J.T.R.); Musto v. Opticare Eye Health Centers, Superior Court, Complex Litigation Docket at Waterbury, Docket No. 155663 (August 9, 2000, Hodgson, J.). Thus, the present application only requires this court to determine that the plaintiff is likely to prevail and that the balance of the equities favors the issuance of the injunction.
I
With this standard in mind, the court now turns to the parties' substantive arguments. The defendant first argues that a temporary injunction should not issue as the language of the covenant is ambiguous, thus rendering it unenforceable. The court, however, finds this argument unpersuasive.
"In determining whether a contract is ambiguous, the words of the contract must be given their natural and ordinary meaning . . . [A] contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself . . . [A]ny ambiguity in a contract must emanate from the language used by the parties . . . If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous." (Citations omitted; internal CT Page 8453-ek quotation marks omitted.) United Illuminating Co. v. Wisvest-Connecticut, LLC, 259 Conn. 665, 670-71, 791 A.2d 546 (2002). "[I]t is generally accepted . . . when two or more meanings may fairly be given to language in a contract, the language is to be construed against the one who drew it . . . and, likewise, the language of a contract is typically construed most strongly against the party whose language it is and for whose benefit it was inserted. Before this rule of construction may be applied, there must be a determination that the terms of the contract are actually ambiguous." (Citation omitted; internal quotation marks omitted.) Dainty Rubbish Service, Inc. v. Beacon Hill Assn., Inc., 32 Conn. App. 530, 533, 630 A.2d 115 (1993).
Conversely, "[c]ontract language is unambiguous when it has a definite and precise meaning . . . concerning which there is no reasonable basis for a difference of opinion . . ." (Internal quotation marks omitted.) Levine v. Advest, Inc., 244 Conn. 732, 746, 714 A.2d 649 (1998). "[A] court will not torture words to import ambiguity, where the ordinary meaning leaves no room for ambiguity and words do not become ambiguous simply because lawyers or laymen contend for different meanings." (Internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 545, 791 A.2d 489 (2002). "When only one interpretation of a contract is possible, the court need not look outside the four corners of the contract . . ." (Internal quotation marks omitted.) Christian v. Gouldin, 72 Conn. App. 14, 20, 804 A.2d 865 (2002).
In this case, paragraph twelve of the contract provides in part: "Salesperson agrees and covenants that during the two . . . year period commencing on the date of termination of Salesperson's affiliation with Company, whether or not Salesperson's employment under this Agreement is terminated by either party and for any reason Salesperson shall not engage in or carry on, directly or indirectly, whether directly by Salesperson or by using any employee's (past or present) of Company or of a partnership or as a shareholder or investor (except for ownership only of securities not exceeding five percent of any class, of the issued and outstanding voting securities of a corporation any class of whose securities are traded on a national securities exchange or in the over-the-counter market) or as a director, employee, agent or consultant of a corporation (other than Company, or a parent, subsidiary or affiliate or any of them) any business within a fifteen . . . mile radius of Milford, Connecticut during the term that this Paragraph shall be in effect similar to or competing with any business or products carried on by Company, or any parent, subsidiary or affiliate or any successor now or at any time during Salesperson's employment." CT Page 8453-el
Although the covenant is neither a model of clarity or precise draftsmanship, the defendant fails to demonstrate how the covenant's language, in and of itself, is ambiguous. A party challenging the validity of a covenant not to compete bears the burden of proof. Scott v. General Iron Welding Co., 171 Conn. 132, 139, 368 A.2d 111 (1976); Milaneseo v. Calvanese, 92 Conn. 641, 642, 103 A. 841 (1918). The court finds that the defendant has not met her burden with respect to her claim that the covenant's language is ambiguous.
II
Additionally, the defendant argues that the covenant is ambiguous in that it conflicts with other sections of the agreement. Specifically, the defendant contends that while the covenant appears to take affect after the defendant's termination, paragraph sixteen allows her to terminate the entire agreement upon giving seven days prior written notice. Thus, the defendant argues, the two provisions conflict because if she were to terminate the contract under paragraph sixteen, the covenant would be rendered ineffective. This argument is unconvincing.
In this case, paragraph sixteen of the contract provides in relevant part: "The Agreement and the association created hereby, may be terminated by either party hereto at any time upon giving seven . . . days written notice to the other."
"When interpreting a contract, we must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result." (Internal quotation marks omitted.) Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., 258 Conn. 101, 118, 779 A.2d 737 (2001). Our Appellate Court has explained: "The rules of construction dictate giving effect to all the provisions of a contract, construing it as a whole and reconciling its clauses . . . Where two clauses which are apparently inconsistent may be reconciled by a reasonable construction, that construction must be given, because it cannot be assumed that the parties intended to insert inconsistent and repugnant provisions." (Internal quotation marks omitted.) Enfield Pizza Palace, Inc. v. Ins. Co. of Greater New York, 59 Conn. App. 69, 75, 755 A.2d 931 (2000), quoting Dainty Rubbish Service, Inc. v. Beacon Pill Assn., Inc., supra, 32 Conn. App. 534.
The court finds that if it were to adopt the defendant's suggested interpretation, the covenant would be meaningless. Either party would be allowed to terminate the contract, and thus, render the covenant ineffective. This interpretation of the contract is simply untenable. The CT Page 8453-em only reasonable interpretation is that paragraph sixteen simply allows the parties to terminate their employment relationship; it does not, however, allow them to terminate the covenant contained in paragraph twelve. That paragraph clearly and logically survives a termination of the parties' employment relationship. Thus, it is found that the covenant is unambiguous with respect to the claimed conflict with other provisions of the contract.
III
The defendant further argues that the contract is invalid as it lacks a mutuality of obligation. Specifically, the defendant argues that while the contract imposes extensive obligations on the defendant, the only obligations imposed on the plaintiff is that it provide the defendant with a key to the office and that it split any commissions that the defendant generated through her own efforts.
Mutuality of obligation has been described as "only a semantical exercise surrounding the real determinant of a contract, namely, consideration." Clausen v. Theo, Hamm Brewing Co., 395 F.2d 388, 389 (8th Cir. 1968). "The doctrine of consideration does not require or imply an equal exchange between the contracting parties. That which is bargained for by the promisor and given in exchange for the promise by the promisee is not made insufficient as a consideration by the fact that its value in the market is not equal to that which is promised. Consideration in fact bargained for is not required to be adequate in the sense of equality of value . . . The general rule is that, in the absence of fraud or other unconscionable circumstances, a contract will not be rendered unenforceable at the behest of one of the contracting parties merely because of an inadequacy of consideration." (Citations omitted; internal quotation marks omitted.) Osborne v. Locke Steel Chain Co., 153 Conn. 527, 532-33, 218 A.2d 526 (1956); see 1 Restatement (Second), Contract § 79, p. 200 (1981) ("[i]f the requirement of consideration is met, there is no additional requirement of `mutuality of obligation' "); see also 1 A. Corbin, Contract (1963) § 127; 3 S. Williston, Contracts (4th Ed. 1992) § 7:21, p. 383.
The defendant's argument notwithstanding, the court finds that the contract does impose obligations on the plaintiff. Paragraph one of the contract provides in part: "Company agrees to make available to Salesperson all current listings in the office, except those Company may find expedient to place temporarily in the exclusive possession of another Salesperson." The paragraph further provides: "At Salesperson's request and sole discretion, Company agrees to furnish such advice, information and full cooperation as Salesperson shall desire." CT Page 8453-en Additionally, paragraph two of the contract provides: "Company agrees to provide Salesperson with use, equally with other Salespeople, of all the facilities of one of the offices now operated by Company in connection with the subject matter of this Agreement." Finally, paragraph six states: "Company's and Salesperson's fees will be received by Company. Such fees, however, shall be payable to each party immediately upon collection or as soon hereafter as practicable. When the fees have been collected from the party or parties for whom the service was performed, at Salesperson's instruction, Company shall immediately pay Salesperson's fee." Based on these provisions, it can hardly be said that the contract did not impose any substantive obligations on the plaintiff. The court, therefore, finds that the contract does provide for a mutuality of obligation between the parties.
IV
Finally, the defendant argues that the covenant is unreasonable, and thus, invalid. The plaintiff contends otherwise.
Our Appellate Court has explained that "[a] covenant that restricts the activities of an employee following the termination of his employment is valid and enforceable if the restraint is reasonable." New Haven Tobacco Co. v. Perrelli, 18 Conn. App. 531, 533, 559 A.2d 715, cert. denied, 212 Conn. 809, 564 A.2d 1071 (1989). When determining whether a covenant is reasonable, "[t]he five factors to be considered . . . are: (1) the length of time the restriction operates; (2) the geographical area covered; (3) the fairness of the protection accorded to the employer; (4) the extent of the restraint on the employee's opportunity to pursue his occupation; and (5) the extent of interference with the public's interests." Robert S. Weiss Associates, Inc. v. Wiederlight, 208 Conn. 525, 529 n. 2, 546 A.2d 216 (1988). This test is "disjunctive, rather than conjunctive; a finding of unreasonableness in any one of the criteria is enough to render the covenant unenforceable." New Haven Tobacco Co. v. Perelli, supra, 18 Conn. App. 534. A party challenging the validity of a covenant not to compete bears the burden of proof. Scott v. General Iron Welding Co., 171 Conn. 132, 139, 368 A.2d 111 (1976); Milaneseo v. Calvanese, 171 Conn. 132, 137, 103 A. 841 (1918). The court will consider the aforementioned factors in reverse order.
A
With respect to the fifth factor, the defendant argues that the covenant is unenforceable as it unreasonably interferes with the public interest. "In order for such interference to be reasonable, it first must be determined that the employer is seeking to protect a legally CT Page 8453-eo recognized interest, and then, that the means used to achieve this end do not unreasonably deprive the public of essential goods and services." New Haven Tobacco Co. v. Perrelli, supra, 18 Conn. App. 536.
At the hearing, Kenneth Scala, the plaintiff's regional president, testified that the covenant was included because of concerns that, among other things, the defendant would use information gained from the plaintiff's client lists to solicit business for herself. It is well settled that "[a]n employer possesses a proprietary right to his customers that he is entitled to protect for a reasonable time." New Haven Tobacco Co. v. Perrelli, supra, 18 Conn. App. 536, citing May v. Young, 125 Conn. 1, 7, 2 A.2d 385 (1938). Thus, the court finds that the covenant seeks to protect a legally recognized interest.
Next, the court must determine whether the means used to achieve this end unreasonably deprive the public of essential goods and services. "In determining whether a restrictive covenant unreasonably deprives the public of essential goods and services, the reasonableness of the scope and severity of the covenant's effect on the public and the probability of the restriction's creating a monopoly in the area of trade must be examined." New Haven Tobacco Co. v. Perrelli, supra, 18 Conn. App. 536.
The sole issue addressed by the defendant is the scope of the restriction. The defendant argues that the scope of the covenant is unreasonable because it prohibits her from transacting any real estate business in the subject area, thereby depriving the consumers in the area of her services. Such a restriction, the defendant argues, is counter to her statewide license, which reflects a public policy of free competition throughout the state. The plaintiff, on the other hand, argues that the scope is not unreasonable because there are many real estate agents in the area.
In considering the covenant's scope, "the restrictions contained in the covenant must be examined to determine how large a section of the populace will be affected if the covenant is enforced. For example, a typical anticompetition covenant which restricts an employee from engaging in the same business as his employer in a given geographic area, effectively prohibits all consumers of that service, who are located in that area, from transacting business with the employee. If the covenant imposes an antisolicitation or antisales restriction, however, the infringement of the public's right only affects a limited number of individuals, namely, the former customers of the employer." New Haven Tobacco Co. v. Perrelli, 11 Conn. App. 636, 641, 528 A.2d 865 (1987).
The covenant at issue in this case is an anticompetition covenant. CT Page 8453-ep Although this type of covenant prohibits all consumers in the subject area from transacting business with the defendant, the court finds that under these circumstances, the covenant will not have a great effect as people do not sell their homes everyday. Furthermore, the covenant is limited to an area within a fifteen-mile radius of Milford. The covenant is also limited in that it is only effective for a limited period of time. Thus, the covenant is found to be reasonable in its scope.
Such a conclusion is not counter to the purpose behind the plaintiff's statewide license. General Statutes § 20-314 (a) provides: "Licenses shall be granted under this chapter only to persons who bear a good reputation for honesty, truthfulness and fair dealing and who are competent to transact business of a real estate broker or real estate salesperson in such manner as to safeguard the interests of the public." Thus, the purpose of the statewide licensing procedure is not to encourage statewide competition among real estate agents, but rather, to protect consumers against unscrupulous and incompetent real estate agents. For the foregoing reasons, the court also finds that the covenant does not unreasonably affect the public interest.
B
Next, the court turns to consider the reasonableness of the restraint on the employee's right to pursue her occupation. The defendant argues that the covenant is an unreasonable restraint in that it prevents her from working in the City of Milford, where she presently resides and her best business prospects lie. The defendant further argues that the covenant prevents her from earning a living as a real estate salesperson.
The plaintiff, however, counters that the covenant is a reasonable restriction on the defendant's professional activity. Specifically, the plaintiff contends that the defendant is free to practice as a real estate agent anywhere in the state outside the fifteen-mile radius.
Our Supreme Court has recognized that "[t]he interests of the employee [herself] must . . . be protected, and a restrictive covenant is unenforceable if by its terms the employee is precluded from pursuing [her] occupation and thus prevented from supporting [herself] and [her] family." Scott v. General Iron Welding Co., 171 Conn. 132, 137, 368 A.2d 111 (1976).
Here, the covenant does not deprive the defendant of the ability to earn a living. The covenant merely prevents her from being employed within a fifteen-mile radius of Milford for a specified period. The CT Page 8453-eq defendant certainly has the opportunity to work outside of the restricted area as a real estate agent. Although the court acknowledges that the defendant's best opportunities may lie within her city of residence, she does not provide any legal authority to support the proposition that the defendant somehow has an absolute right to be employed in the city in which her best business prospects lie notwithstanding the covenant not to compete which is the topic of this litigation. Thus, the subject covenant does not unreasonably restrain the defendant's right to pursue her occupation.
C
Next, the court must consider the fairness of the protection accorded the employer. The defendant argues that the protection accorded by the covenant is fundamentally unfair as it seeks to restrain an independent contractor for whom the plaintiff did not provide wages, benefits or workers' compensation insurance.
"In order to be valid and binding, a covenant which restricts the activities of an employee following termination of his employment . . . should afford only a fair protection to the interest of the party in whose favor it is made . . ." Scott v. General Iron Welding Co., supra, 171 Conn. 137. "If . . . a restriction is to be upheld and enforced it must be reasonably necessary for the fair protection of the employer's business, good will or rights . . ." May v. Young, supra, 125 Conn. 5. "[R]estrictions are valid when they appear to be reasonably necessary for the fair protection of the employer's business or rights . . . due regard being had to the subject-matter of the contract and the circumstances and conditions under which it is to be performed. Especially if the employment involves the imparting of trade secrets, methods or systems and contacts and associations with clients or customers it is appropriate to restrain the use, when the service is ended, of the knowledge and acquaintance, so acquired, to injure or appropriate the business which the party was employed to maintain and enlarge." Id. 6-7.
Although the defendant's argument may have some validity, the fact that the defendant was considered an independent contractor begs the question and does not address whether the covenant is reasonably necessary to protect the employer's business, good will or rights.
The defendant further argues that the plaintiff has failed to demonstrate how the covenant is necessary to protect its business. The plaintiff, on the other hand, contends that it deserves some protection from its former associates who had access to client lists and who may use CT Page 8453-er highly specialized training and advertising received during their employment to later compete with the plaintiff.
Although the defendant appears to place the burden of proof on the plaintiff, a party challenging the validity of a covenant not to compete bears the burden of proof. Scott v. General Iron Welding Co., 171 Conn. 132, 139, 368 A.2d 111 (1976); Milaneseo v. Calvanese, 171 Conn. 132, 137, 103 A. 841 (1918). Thus, in this case, the burden rests with the defendant.
The covenant in this case precludes the defendant from practicing in a fifteen-mile radius of Milford for a specific period of time. At the hearing, there was evidence that the reason the covenant was included in the contract was that the plaintiff was concerned not only with the defendant taking present clients, but also with the defendant competing for future clients. Mr. Scala testified that he was concerned with the defendant's taking current clients because she had access to the plaintiff's client lists throughout her employment. He also testified that he was concerned with the defendant taking future clients by virtue of certain training and advertising that the defendant had received while working for the plaintiff. Finally, he testified that there was a high level of competition among real estate agencies in the Milford area. Under these circumstances and given these legitimate concerns, the subject covenant is not unreasonable.
The court finds support for its conclusion in Robert S. Weiss Associates, Inc. v. Wiederlight, supra, 208 Conn. 525. In that case, the plaintiff, an insurance company, instituted an action against the defendant, a former insurance agent, for breach of a covenant not to compete. Id., 526. The covenant prohibited the defendant from "selling, soliciting or otherwise engaging in commercial insurance for himself or any other firm in Stamford or within a ten mile radius, excluding Long Island, New York, and areas north of Stamford, for two year following termination [and also] prohibited him from soliciting or selling commercial insurance to customers of the plaintiff, existing when [his] employment terminated, for two years following termination." Id., 530. The defendant argued that the covenant was unreasonable because, rather than simply preventing him from soliciting the plaintiff's current clients, it prevented him from any practice within the Stamford area for two years. Id., 532. The court, however, rejected this argument, holding: "The fact that an employer seeks to protect his interest in potential new customers in a reasonably limited market area as well as his existing customers at the time the employee leaves does not render the covenant unreasonable." Id., 533. The subject covenant is viewed by this court as a reasonable protection of the plaintiff's business interests. CT Page 8453-es
D
The court now must consider the geographical area covered by the covenant. The defendant argues that the plaintiff did not demonstrate which towns fall within the fifteen-mile radius provided for in the covenant. Furthermore, the defendant argues that the plaintiff has failed to demonstrate that it has, in fact, done business in each town that falls within the fifteen-mile radius.
The plaintiff counters that the fifteen-mile radius is reasonable as the plaintiff does business within that area. Alternatively, however, the plaintiff argues that the court may limit the geographical area to Milford, Trumbull, West Haven, Bridgeport and Stratford, the towns from which the plaintiff gains the majority of its business.
At the hearing, Mr. Scala testified that the plaintiff's clients generally come from Milford, Trumbull, West Haven, Bridgeport and Stratford. The plaintiff is not required to demonstrate that it does business in each and every town that is within the geographic area proscribed by the covenant. Instead, the "restrictive covenant must [simply] be confined to a geographic area that is reasonable in view of the particular situation . . . A restrictive covenant which protects the employer in areas in which he does not do business or is unlikely to do business is unreasonable with respect to area." (Citation omitted; internal quotation marks omitted.) New Haven Tobacco Co. v. Ferrelli, supra, 18 Conn. App. 534. Given the fact that the majority of the plaintiff's business comes from the aforementioned towns, it is likely that the plaintiff does business in each town within a fifteen-mile radius of Milford. Thus, the court finds that the geographic area proscribed by the covenant is reasonable.
E
Finally, the court must determine whether the covenant's two-year time period is reasonable. The defendant argues that the two-year period is unreasonable because the plaintiff's average customer listing lasts only six months and there is little repeat business.
The plaintiff, on the other hand, contends that the two-year prohibition is reasonable. Specifically, the plaintiff argues that the two-year period is reasonable as the defendant had access to client lists and benefitted from advertising and training that the defendant may now use to compete with the plaintiff. In this regard, the court is unpersuaded by the plaintiff's argument. CT Page 8453-et
As explained earlier, the covenant was reasonably necessary to protect the plaintiff's interest in its current and future clients. With respect to current clients, Mr. Scala testified that the average customer listing lasts only six months. He also testified that his office received little repeat business. Thus, after six months, the clients that were on the lists when the defendant was terminated would likely no longer be clients of the plaintiff. With respect to future clients, the defendant testified that, although she did receive training, it was not unique. Furthermore, Mr. Scala testified that, during the defendant's employment, the plaintiff only purchased two newspaper advertisements, which identified the defendant as an agent affiliated with the plaintiff's office. Under these circumstances, the court finds that a restriction of two years is unreasonable.
This finding, however, does not necessarily render the covenant unenforceable. "A restrictive covenant which contains or may be read as containing distinct undertakings bounded by different limits of space or time, or different in subject-matter, may be good as to part and bad as to part. But this does not mean that a single covenant may be artificially split up in order to pick out some part of it that can be upheld. Severance is permissible only in the case of a covenant which is in effect a combination of several distinct covenants." (Internal quotation marks omitted.) Beit v. Beit, 135 Conn. 195, 205, 63 A.2d 161 (1948). "Whether the promises in a contract will be treated as severable or not is primarily a matter of the intent of the parties, determined by a fair construction of all the provisions of the contract." Id., 204. This is the so-called "blue pencil rule." See Timenterial, Inc. v. Dagata, 29 Conn. Sup. 180, 184, 277 A.2d 512 (1971)
Here, the covenant provides, in part: "If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate covenants because the total time contained hereof shall be deemed to be excessive or unreasonable, then it is the intent of the parties hereto that such covenants which would otherwise be unenforceable due to such excessive or unreasonable period of time be enforced for such lesser period of time as shall be deemed reasonable and not excessive by such court." The parties' intent, therefore, is unmistakable — they intended the two-year time period to be severable. Thus, the court will treat it as such.
In the context of this case, the court finds that a one-year time period is reasonable. This period will protect the plaintiff's interest in its present clients as those clients will likely have closed on a property within one year. Furthermore, a one-year period will adequately CT Page 8453-eu protect the plaintiff's interest in future clients for this time period.
Based on the foregoing, the application for a temporary injunction is granted and it is hereby ordered: that the defendant shall refrain from carrying on, directly or indirectly, any business within a fifteen-mile radius of Milford, Connecticut, which is similar to or competing with any business or products carried on by the plaintiff, or any parent, subsidiary or affiliate or any successor for a period of one year from the date of her voluntary resignation and departure. Consequently, the defendant is enjoined from employment as a residential salesperson with the William Raveis Real Estate Office located at 179 Broad Street, Milford, Connecticut for a period of one year from the date of her voluntary termination and must adhere to all other terms and conditions provided for in the subject covenant.
THE COURT
RONAN, J.T.R. CT Page 8453-ev