A judge in Kansas City, Mo., has refused to enforce a noncompetition agreement signed by a dealership's former finance and insurance producer.
Jackson County Circuit Judge Preston Dean denied an injunction that Courtesy Chevrolet-Cadillac Inc. wanted to prohibit James McCall from working for another General Motors dealership, also in Kansas City.
McCall resigned from Courtesy in July 1997 and became an F&I producer and director at Cunningham Chevrolet-Oldsmobile-Geo. The dealerships are on opposite sides of the city and separated by the Missouri River. Courtesy is on the north side, Cunningham on the south.
Courtesy sued for an injunction and damages, contending McCall's contract barred him from working for one year for a competitor within 60 miles of Courtesy. McCall challenged the noncompete agreement, arguing that he held no trade secrets and asserting that Courtesy had constructively discharged him.
McCall's lawyer, Alan Markowitz of Kansas City, said there was evidence that the two dealers do not compete. For example, less than 5 percent of Courtesy's customers come from south of the river, while a smaller proportion of Cunningham's customers live north of the river.
After a one-day nonjury trial on the injunction request, Dean ruled against Courtesy, saying: 'The purpose of a restrictive covenant is to protect the employer, not to punish the former employee. It is not appropriate to impose unreasonable restraints on the former employee.'
He found that McCall quit 'due to unhappiness with the working conditions,' took no trade secrets or customer lists, and had received no special training from Courtesy.
'The work in all finance and insurance sections of car dealerships is done in essentially the same way,' Dean said. 'The success of an F&I producer turns on personality and salesmanship, not trade secrets.'
The judge said that although Courtesy and Cunningham are 'in the same line of business, they are not competing for the same customers. They are separated by a substantial distance and do not draw from the same pool of customers.'
Courtesy's lawyer, Clyde Meise of Kansas City, said, 'Injunctive relief is a difficult thing to get. We had some problems in the case, frankly, because the evidence wasn't there.'
The judge's order does not prevent Courtesy from going to trial on the remaining claim for monetary damages. Meise said his client has not yet decided whether to proceed on that claim.