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LABRIOLA v. POLLARD GROUP INC

Supreme Court of Washington,En Banc.

Anthony A. LABRIOLA, Petitioner, v. POLLARD GROUP, INC.,

Respondent.

No. 74002-0.

Decided: November 10, 2004

A. Richard Maloney, Seattle, for Petitioner. Eisenhower & Carlson, Stuart Morgan, Tacoma, for Respondent.

In this case we consider whether there was consideration for the formation of a

valid noncompete agreement signed by an employee, �ve years after he was hired,

when the employer offered no other additional bene�ts or promises to the

employee. Anthony Labriola (Employee) seeks a declaration that an agreement

not to compete is null and void against Pollard Group, Inc. (Employer), his former

Employer. A noncompete agreement entered into after employment has

commenced is validly formed only when there is independent consideration at the

time the agreement is reached. Finding that there was no independent

consideration at the time of the 2002 noncompete agreement, we reverse the trial

court's summary judgment ruling.

FACTS

In 1997, Employer hired Employee to work as a commercial print sales person, and

the parties entered into an employment agreement. Under the agreement,

Employer could terminate Employee without cause. Employee's compensation

consisted of a base salary and commission from sales. The agreement also

contained a restrictive covenant not to compete in the custom printing business

for a period of three years after employment ended. The agreement had no

geographical limitations.

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Nearly �ve years later, in April 2002, Employer requested and Employee executed a

“Noncompetition and Con�dentiality Agreement” (noncompete agreement). The

noncompete agreement required Employee to refrain from accepting employment

with a competitor for a period of three years within 75 miles of Employer's

business in Tacoma, Washington. Employee remained an “at-will” employee and

received no additional bene�ts. Employer incurred no additional obligations from

the noncompete agreement. The noncompete agreement also contained

clauses for con�dentiality, severability, and an award of attorneys fees and costs.

A few months later, in July 2002, Employer announced a new commission sales

compensation schedule. The new schedule raised the threshold sales level

required for commissions to be paid. The old schedule's threshold paid

commission when an employee generated sales of at least $25,000 for the month

while the new schedule paid commission to an employee only after sales for the

month exceeded $60,000. Employee determined that the new schedule would

reduce his income by about 25% and sought employment for a similar position

elsewhere. On November 12, 2002, Employer discovered Employee's intention to

seek employment with a competitor and terminated Employee. Employer sent a

letter to the competitor interested in hiring Employee, stating its intent to enforce

Employee's noncompete agreement. The competitor did not hire Employee.

Employee remains unemployed despite actively seeking a position similar to the

one he had held with Employer.

Employee initiated suit against Employer, seeking a declaratory judgment that the

noncompete agreement was null and void and that Employer tortiously interfered

with Employee's business. Employee moved for partial summary judgment that

the noncompete agreement was unenforceable. The trial court ruled against

Employee and upheld the agreement. The trial court also denied Employee's

motion that the trial court modify the 2002 noncompete agreement's time

restriction from three years to six months. Employee voluntarily dismissed his

tortious business interference claim following the trial court's decision on partial

summary judgment. Employee sought direct review of this court which was

granted.

STANDARD OF REVIEW

The issues before the court involve questions of law and the standard of review

on appeal is de novo. Nationwide Mutual Fire Ins. Co. v. Watson, 120 Wash.2d

178, 195, 840 P.2d 851 (1992). When reviewing an order of summary judgment,

the court engages in the same inquiry as the trial court. Marincovich v.

Tarabochia, 114 Wash.2d 271, 274, 787 P.2d 562 (1990). A summary judgment

motion can be granted only when no genuine issue as to any material fact exists,

and the moving party is entitled to judgment as a matter of law. Id. The court

must consider the facts in the light most favorable to the nonmoving party, and

the motion should be granted only if reasonable persons could reach only one

conclusion. Id.

ANALYSIS

Issue 1. Is there consideration for the formation of a contract when an employee,

already employed by the employer, executes a noncompete agreement but

receives no new bene�t and the employer incurs no further obligations?

Employee claims that the noncompete agreement fails for lack of consideration;

in other words, a contract was not formed. Employer contends that the

noncompete agreement is enforceable because future and continued employment

and/or job training served as the Employer's consideration in exchange for

Employee's execution of the noncompete agreement.

Courts enforce noncompete agreements that are validly formed and are

reasonable. Racine v. Bender, 141 Wash. 606, 615, 252 P. 115 (1927).

Consideration is “any act, forbearance, creation, modi�cation or destruction of a

legal relationship, or return promise given in exchange.” King v. Riveland, 125

Wash.2d 500, 505, 886 P.2d 160 (1994). Consideration is a bargained-for

exchange of promises. Williams Fruit Co. v. Hanover Ins. Co., 3 Wash.App. 276,

281, 474 P.2d 577 (1970). The Restatement (Second) of Contracts states:

(1) To constitute consideration, a performance or a return promise must be

bargained for.

(2) A performance or return promise is bargained for if it is sought by the

promisor in exchange for his promise and is given by the promisee in exchange for

that promise.

(3) The performance may consist of

(a) an act other than a promise, or

(b) a forbearance, or

(c) the creation, modi�cation, or destruction of a legal relation.

Restatement (Second) of Contracts § 71(1)-(3) (1981).

Courts generally do not inquire into the adequacy of consideration and instead

utilize a legal su�ciency test. Browning v. Johnson, 70 Wash.2d 145, 147, 422

P.2d 314, 430 P.2d 591 (1967). Legal su�ciency “is concerned not with the

comparative value but with that which will support a promise.” Id.

The general rule in Washington is that consideration exists if the Employee

enters into a noncompete agreement when he or she is �rst hired. Wood v. May,

73 Wash.2d 307, 310-11, 438 P.2d 587 (1968); Racine, 141 Wash. at 609, 252 P.

115; Knight, Vale & Gregory v. McDaniel, 37 Wash.App. 366, 368, 680 P.2d 448

(1984).

A noncompete agreement entered into after employment will be enforced if it is

supported by independent consideration. Rosellini v. Banchero, 83 Wash.2d 268,

273, 517 P.2d 955 (1974); Schneller v. Hayes, 176 Wash. 115, 118, 28 P.2d 273

(1934). Independent, additional, consideration is required for the valid formation

of a modi�cation or subsequent agreement. There is no consideration when

“one party is to perform some additional obligation while the other party is simply

to perform that which he promised in the original contract.” Banchero, 83

Wash.2d at 273, 517 P.2d 955 (citing 15 Walter H.E. Jaeger, Williston on Contracts

§ 1826 at 487 (3d ed.1972)). Independent consideration may include increased

wages, a promotion, a bonus, a �xed term of employment, or perhaps access to

protected information. Schneller, 176 Wash. at 118-19, 28 P.2d 273. Independent

consideration involves new promises or obligations previously not required of the

parties.

In Racine, the court concluded that a warranty not to compete signed by the

Employee on a weekly basis for 260 consecutive weeks created a valid contract.

Racine, 141 Wash. at 610, 252 P. 115. Racine employed Bender as a certi�ed

public accountant. At the time of hire, the parties made no mention of

restrictions on Bender's future employment. However, at the end of each week

during the employment, Bender was required to prepare a report and sign a

warranty agreeing not to compete against Racine for three years after the

conclusion of his employment. Id. at 607, 252 P. 115. We reasoned that

when each week [employee] signed the warranty which expressly provides in the

�rst three provisions in words that no man may misunderstand, ‘(a) my entire time

shall be devoted; (b) during such employment I shall not do[;] and (c) either during

or after leaving such employment I will not take any action,’ such a warranty

contained in each report was certainly a basis and a part consideration for future

employment.

Id. at 609, 252 P. 115. Although signed after the completion of one week's worth

of work, the warranty not to compete signed by Bender served as consideration

for future employment based upon the conduct of the parties each week for 260

weeks.

In Schneller, the court held a noncompete agreement that the employee signed

just after starting work lacked consideration because the employer failed to

advise Hayes, the employee, of a noncompete agreement at the time of the offer

for hire. Schneller, 176 Wash. at 118, 28 P.2d 273. Hayes promised not to

compete within one mile of the city of Walla Walla. The court reasoned there

was no consideration since Hayes's noncompete agreement made no promises to

the employee for future employment and stipulated nothing as to wages. The

employer reduced Hayes's salary after only four months on the job. After seven

months on the job, the employer announced he intended to reduce Hayes's salary

again. A few weeks later the Employer terminated Hayes's employment and

sought to enforce the noncompete agreement after Hayes set up a competing

business in Walla Walla.

In the present case, Employer contends that continued employment served as

consideration for the 2002 noncompete agreement. However, Racine and

Schneller do not support Employer's contention. We found in Racine, the

repeated signing of a warranty not to compete every week for 260 weeks served,

operated as a promise in exchange for prospective employment and therefore was

adequate consideration. In the present case, Employee signed only one

subsequent noncompete agreement, nearly �ve years after beginning work for

Employer. The conduct of Employer and Employee in this case does not support

the conclusion that continued employment served as consideration, as it did in

Racine. Employee's situation is very similar to Schneller where we found

consideration lacking. In Schneller, we concluded that consideration was absent

in a noncompete agreement where the employer promised nothing in the way of

future employment and nothing was stipulated as to wages. Schneller, 176 Wash.

at 118-19, 28 P.2d 273. This is precisely the situation here. Employee's

noncompete agreement made no promises as to future employment and wages.

Further, during deposition, Robin Pollard, Employer's president, conceded that “no

extra bene�ts or consideration or promises [were] made to [Employee] if he signed

the noncompete.”

Consideration is a bargained-for exchange of promises. A comparison of the

status of the employer before and after the noncompete agreement con�rms that

the 2002 noncompete was entered into without consideration. Employer did not

incur additional duties or obligations from the noncompete agreement. Prior to

execution of the 2002 noncompete agreement, Employee was an “at will”

Employee. After Employee executed the noncompete agreement, he still

remained an “at will” employee terminable at Employer's pleasure. We hold that

continued employment in this case did not serve as consideration by Employer in

exchange for Employee's promise not to compete.

Employer also argues that the training the Employee received after signing the

noncompete served as consideration for Employee's execution of the noncompete

agreement. Employer relies on Schneller and Wood in arguing that instruction

served as consideration for Employee's promise to not compete. The

noncompete agreement makes no mention that Employer's instruction served as

consideration in exchange for Employee's promise not to complete. This is so

because Employer did not intend to provide Employee with any additional bene�ts

or promises from the company. While Employer alleges that Employee received

training after signing the noncompete agreement, the Employer has not

demonstrated that the training received after signing the noncompete agreement

was any different from what he was entitled to under the 1997 employment

agreement. The Employer's president, Robin Pollard, conceded that there were

no new bene�ts or promises made to Employee in exchange for the Employee's

promise not to compete.

Schneller and Wood support the conclusion, that in the present case, Employer did

not promise instruction as consideration for Employee's promise not to compete.

In Schneller, we stated that the facts of the case did not support a �nding of

consideration by way of instruction because the Employee was a licensed optician

and did not undergo employment as an apprentice. Schneller, 176 Wash. at 120-

21, 28 P.2d 273. The Employee was experienced-prior to working for Schneller he

worked with an optical company. In contrast, in Wood, we determined that the

apprentice received an extensive amount of training after he signed a noncompete

agreement and that training was consideration in exchange for signing the

noncompete agreement. Wood, 73 Wash.2d at 308, 311, 438 P.2d 587. Unlike

Wood and more similar to Schneller, here the Employee was experienced when he

signed the noncompete agreement. Employee's previous job before joining

Employer was very similar to his job with Employer. Employee had already

received training in the �ve years he worked for Employer before he executed the

agreement. Employer's president made it quite clear that no promises were

made to Employee in exchange for signing the noncompete agreement. This

would include the promise to train or instruct the Employee.

Further, Employer relies on a decision by Division Two of the Court of Appeals,

Knight, 37 Wash.App. 366, 680 P.2d 448. The Court of Appeals enforced a

noncompete agreement that was executed after the employees were hired but

before the Employees started working because they knowingly signed the

noncompete agreement on the �rst day of work. Id. at 368-69, 680 P.2d 448.

Employer claims that in Perry v. Moran, 109 Wash.2d 691, 699-700, 748 P.2d 224

(1987), judgment modi�ed on recon., 111 Wash.2d 885, 766 P.2d 1096 (1989), this

court explicitly approved the Knight analysis that “[c]ontinued employment and

training are su�cient consideration for an employee's promise not to compete.”

Knight, 37 Wash.App. at 368-69, 680 P.2d 448. Employer's assertion is mistaken.

In Perry, we utilized Racine and Knight to determine whether a validly formed

noncompete agreement was reasonable. Perry, 109 Wash.2d at 700, 748 P.2d

224.

Unlike Knight, the Employee here did not sign the noncompete agreement before

the very �rst day of work. He was already employed for �ve years and received

no additional bene�ts than what he was entitled to under the 1997 employment

agreement. Employer simply promised to perform what he promised Employee

in the original 1997 employment agreement in exchange for Employee taking on

the additional promise to not compete against the Employer for three years within

a 75 mile radius of Tacoma.

Employer argues that continued employment and/or continued training has served

as su�cient consideration for the formation of a binding noncompete agreement

in Washington for over 70 years and that a decision by the court to reverse the trial

court changes longstanding law. Our decision today, contrary to Employer's

contention, follows this court's jurisprudence that independent consideration is

required at the time promises are made for a noncompete agreement when

employment has already commenced. Rosellini, 83 Wash.2d at 273, 517 P.2d

955; Schneller, 176 Wash. at 119, 28 P.2d 273. While continued employment

and/or continued training may serve as su�cient consideration, it certainly was

not the case here. Racine, 141 Wash. at 614, 252 P. 115; and Wood, 73 Wash.2d

at 310-11, 438 P.2d 587. Accordingly, we hold that the noncompete agreement is

not supported by consideration and is not enforceable.

Issue 2. Other issues concerning the 1997 employment agreement, attorney's

fees and costs, a�rmative defenses and counter claims, and CR 11 sanctions.

a. 1997 employment agreement

At oral argument, Employee conceded paragraph 10 of the 1997 agreement is

enforceable. Given that stipulation, we need not reach that issue.

b. Attorneys fees

Employee and Employer both request that the prevailing party be awarded

attorneys fees and costs in this matter. In Washington, attorney fees may be

awarded only when authorized by a private agreement, a statute, or a recognized

ground of equity. Fisher Properties, Inc., v. Arden-Mayfair, Inc., 106 Wash.2d 826,

849-50, 726 P.2d 8 (1986). RCW 4.84.330 states that where a contract provision

allows for the awarding of attorneys fees and costs to one of the parties, “the

prevailing party, whether he is the party speci�ed in the contract [ ] or not, shall be

entitled to reasonable attorneys fees in addition to costs and necessary

disbursements.” Id. Attorneys fees and costs are awarded to the prevailing party

even when the contract containing the attorneys fee provision is invalidated. See

Mt. Hood Beverage Co. v. Constellation Brands, Inc., 149 Wash.2d 98, 121-122, 63

P.3d 779 (2003); Herzog Aluminum, Inc. v. Gen. Am. Window Corp., 39 Wash.App.

188, 196-97, 692 P.2d 867 (1984); Yuan v. Chow, 96 Wash.App. 909, 915-18, 982

P.2d 647 (1999); and Stryken v. Panell, 66 Wash.App. 566, 572-73, 832 P.2d 890

(1992).

Paragraph 12 of the noncompete agreement contains a provision for an award

of attorneys fees and costs for the Employer. Employee, the prevailing party, is

entitled to an award of attorney fees under RCW 4.84.330, regardless of whether

the contract is invalidated in whole or in part. Mt. Hood Beverage Co., 149

Wash.2d at 121-22, 63 P.3d 779. As the prevailing party, we award Employee

attorneys fees and costs.

c. A�rmative defenses and counterclaims

The trial court issued an order granting Employer's partial motion for summary

judgment that the noncompete agreement was enforceable. But the trial court

also granted Employee's motion, dismissing Employer's two a�rmative defenses

and �ve counterclaims. Employer urges the court to reinstate its a�rmative

defenses and counterclaims, in the event that we decide that the noncompete

agreement is unenforceable. The two a�rmative defenses dismissed were

failure to mitigate damages and fault of a nonparty.

The doctrine of avoidable consequences, or mitigation of damages, prevents an

injured party from recovering damages that could have been avoided through

reasonable efforts. We have previously held the following text applicable:

[a] wide latitude of discretion must be allowed to the person who by another's

wrong has been forced into a predicament where he is faced with a probability of

injury or loss. Only the conduct of a reasonable man is required of him. If a

choice of two reasonable courses presents itself, the person whose wrong forced

the choice cannot complain that one rather than the other is chosen.

Hogland v. Klein, 49 Wash.2d 216, 221, 298 P.2d 1099 (1956) (emphasis omitted)

(quoting Charles T. McCormick, Handbook on the Law of Damages 35, at 134

(1935)). See also Cobb v. Snohomish County, 86 Wash.App. 223, 230, 935 P.2d

1384 (1997).

Here, there is no factual dispute. Posttermination, the Employee sought a

position similar to the one he held with Employer. During his deposition,

Employee stated that he applied for a sales position with companies such as

Johnson & Johnson, Solva Pharmaceuticals, Floud USA, Hubert Research, and the

Tacoma News Tribune. Employee also sought help from employment recruiters

as well. Despite these efforts, Employee remained unemployed. Employer

argues that Employee failed to mitigate damages because he did not seek part-

time employment or seasonal employment or any other employment outside the

75 mile radius restriction in the noncompete agreement. The doctrine of

avoidable consequences only requires the Employee to act reasonably to mitigate

his damages. Employee's job strategy to search for a similar position was

reasonable. We hold that the trial court did not err when it dismissed Employer's

failure to mitigate defense.

Employer's second a�rmative defense claims fault of a nonparty. This was a

defense to Employee's tortious business interference claim against Employer.

However, Employee voluntarily dismissed his tortious business interference claim

following the trial court's decision on partial summary judgment. Employee has

not sought to reinstate the tortious business interference claim. We a�rm the

trial court's decision to dismiss Employer's second a�rmative defense.

The trial court dismissed Employer's �ve counterclaims: breach of contract,

injunctive relief, breach of the duty of loyalty, breach of the Uniform Trade Secrets

Act, and conversion.

The �rst counter claim, Employer alleges that Employee's actions in soliciting

employment with the Employer's competitors and disclosing and/or threatening to

disclose Employer's con�dential information constitute a breach of contract.

Second, Employer seeks injunctive relief compelling the Employee to return any

and all of Employer's proprietary information that the Employee has in his control

and to enforce the noncompete agreement for three years within a 75 mile radius

of Tacoma. Third, Employer alleges that Employee breached his duty of loyalty

by attempting to solicit Employer's customers and Employees to end their

business or employment relationship with the Employer. Fourth, Employer

alleged that Employee disclosed trade secrets under chapter 19.108 RCW, the

Uniform Trade Secrets Act. Fifth, Employer alleges that Employee wrongfully

converted Employer's property for his own use.

On summary judgment, the Employer did not bring forth su�cient facts to

substantiate the counterclaims. Without a prima facie showing, Employer cannot

avoid a summary judgment ruling against it on the �ve counterclaims. We hold

that the trial court did not err when it dismissed Employer's �ve counterclaims on

the 2002 noncompete agreement.

d. Civil Rule 11

Employee argues that we should order the trial court to conduct a hearing against

Employer for violating CR 11. CR 11 provides the court with the discretionary

authority to impose sanctions upon a motion by a party or on the superior court's

own initiative. No motion having been made to the trial court, Employee's

request is premature. We decline Employee's request.

CONCLUSION

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We hold that the 2002 noncompete agreement lacked independent consideration

and is not enforceable against the Employee. We do not reach the issue of

whether the 1997 agreement is enforceable because the Employee conceded that

it is enforceable. We award the prevailing party, Employee, attorney fees and

costs. We a�rm the trial court's dismissal of Employer's a�rmative defenses

and counterclaims. We decline the Employee's CR 11 request. Accordingly, we

reverse the trial court's summary judgment ruling against Employee. We enter

summary judgment in favor of Employee that the 2002 noncompete agreement

was not validly formed.

The majority reaches the correct result but fails to su�ciently articulate the

multiple legal grounds raised for striking down a facially unreasonable

noncompete agreement formed during the course of at-will employment, leaving

doubt as to the permissible scope of a valid noncompete agreement. First, the

majority's position on the adequacy of continued employment as consideration is

unclear. Continued at-will employment is never independently su�cient to

uphold a covenant not to compete, and we should not suggest otherwise.

Second, the unreasonable nature of the noncompete agreement in question is

overlooked as an independent basis for �nding the agreement unenforceable.

Therefore, I write separately to clarify that continued at-will employment is never

su�cient consideration for a noncompete agreement formed after the outset of

employment and to explain that the agreement in question is also unenforceable

on the independent ground that it is unreasonable.

ANALYSIS

Continued at-will employment, without more, is never su�cient consideration for a

noncompete agreement formed subsequent to employment. As the majority

correctly states, where the only consideration is continued employment, “[t]he

general rule in Washington is that consideration exists [only] if the [e]mployee

enters into a noncompete agreement when he or she is �rst hired.” Majority at

794. This proposition is well-settled and without exception. See, e.g., Wood v.

May, 73 Wash.2d 307, 312, 438 P.2d 587 (1968); Racine v. Bender, 141 Wash. 606,

612, 252 P. 115 (1927); Knight, Vale & Gregory v. McDaniel, 37 Wash.App. 366,

369, 680 P.2d 448 (1984); see also 2 Corbin on Contracts § 6.19, at 338 (1995);

15 Corbin on Contracts § 80.23, at 169 (2003). As such, the majority properly

holds that Labriola's continued employment was insu�cient to uphold a

noncompete agreement formed long after he was hired. Majority at 796.

While correctly establishing that “independent consideration is required at the

time promises are made ․ [to validate] a noncompete agreement [formed] when employment has already commenced,” the majority then sends a confusing

message with regard to the potential adequacy of continued employment and

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training as independent forms of consideration, by adding that “[w]hile continued

employment and/or continued training may serve as su�cient consideration, it

certainly was not the case here.” Majority at 796 (emphasis added).

Established case law does not support the majority's incautious suggestion that

continued employment or routine training may serve as independently su�cient

consideration in some cases where a noncompete agreement is formed after

employment begins. At-will employment is by de�nition non-binding, as either

party may terminate the relationship at any time. As such, continued at-will

employment cannot sustain a covenant not to compete without supplemental

consideration such as explicitly promised or substantially realized future

employment or specialized training, increased wages, or the disclosure of

con�dential information of value. Wood, Racine, and Knight accordingly

recognize that while offers of at-will employment may serve as consideration for

noncompete agreements formed at the inception of employment, promises of

employment, or training are otherwise su�cient only where they are explicit and

convey something more than that which was bargained for or inherent in the

original terms of employment.

In accord with these principles, an employer's explicit promise “to teach [an

employee] the [new] skill of horseshoeing” was held su�cient to support a

noncompete agreement in Wood, 73 Wash.2d at 310, 438 P.2d 587, as were

explicit promises of “future employment” for speci�c terms in Racine, 141 Wash.

at 609, 252 P. 115. Relying on our decisions in Wood and Racine, the Court of

Appeals subsequently reasoned in Knight that “[c ] ontinued employment and

training [together] are su�cient consideration for an employee's promise not to

compete.” Knight, 37 Wash.App. at 368-69, 680 P.2d 448 (emphasis added)

(citing Wood, 73 Wash.2d at 310-11, 438 P.2d 587; Racine, 141 Wash. at 606, 252

P. 115). While the Court of Appeals' reliance on our decision in Wood was sound

with regard to training, Racine did not, as Knight suggests, address “continued

employment,” but rather the analytically distinct category of guaranteed “future

employment.” Thus, none of the cases from this court that are cited by the

majority recognize continued employment as su�cient consideration for

noncompete agreements entered into after employment has commenced.

Moreover, in Schneller v. Hayes, 176 Wash. 115, 119-21, 28 P.2d 273 (1934) this

court held that a promise of employment which could be terminated at the

employer's pleasure was not adequate consideration for an employee's promise

not to compete, even though the employee received instruction and work-related

experience during the routine course of his employment. The agreement in

Schneller, like the agreement at issue here, was “wholly lacking in consideration”

because it “promised [the employee] nothing in the way of future employment, and

[moreover] stipulated nothing as to wages.” Schneller, 176 Wash. at 118-19, 28

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P.2d 273. In sum, this court has never held that continued employment alone is

su�cient consideration to uphold a noncompete agreement, and we should be

careful not to suggest otherwise.

While largely overlooked in the majority's analysis, a covenant not to compete is

also unenforceable if unreasonable. Sheppard v. Blackstock Lumber Co., 85

Wash.2d 929, 931, 540 P.2d 1373 (1975); Racine, 141 Wash. at 611, 252 P. 115,

Wood, 73 Wash.2d 307, 438 P.2d 587, Knight, 37 Wash.App. at 369, 680 P.2d 448.

Recognizing this fact, the majority acknowledges that only “noncompete

agreements that are validly formed and are reasonable ” will be enforced.

Majority at 793 (emphasis added). The majority's focus on the absence of

consideration should therefore not be interpreted to suggest that the agreement at

issue here would be made enforceable merely by the addition of consideration in

the form of “increased wages, a promotion, a bonus, a �xed term of employment,

or perhaps access to protected information.” Majority at 794. A restrictive

covenant that is unreasonable is unenforceable even where the requirements of

consideration are met.

Whether a noncompete agreement is reasonable is a matter of law to be decided

by the courts. Knight, 37 Wash.App. at 368, 680 P.2d 448; Marquez v. Univ. of

Washington, 32 Wash.App. 302, 648 P.2d 94 (1982); Alexander & Alexander, Inc. v.

Wohlman, 19 Wash.App. 670, 578 P.2d 530 (1978). Agreements cannot be more

restrictive than is reasonably necessary to protect the legitimate business

interests of employers. Racine, 141 Wash. at 612, 252 P. 115; Wood, 73 Wash.2d

at 312, 438 P.2d 587; Sheppard, 85 Wash.2d at 931-33, 540 P.2d 1373; Knight, 37

Wash.App. at 369, 680 P.2d 448. The test for reasonableness takes into account

“whether or not the restraint is necessary for the protection of the business or

good will of the employer,” and “whether it imposes on the employee any greater

restraint than is reasonably necessary to secure to the business of the employer,

or the good will thereof, such protection.” Racine, 141 Wash. at 611-12, 252 P.

115; see also Wood, 73 Wash.2d at 309, 438 P.2d 587.

In short, employers can take measures to protect legitimate business interests,

but may not unreasonably restrict the freedom of current or former employees to

earn a living. Noncompete agreements are therefore unreasonable whenever

they are used to secure employers against employees' lawful use of labor and

skills. Alexander, 19 Wash.App. at 687, 578 P.2d 530; Copier Specialists, Inc. v.

Gillen, 76 Wash.App. 771, 774, 887 P.2d 919 (1995). Noncompete agreements

designed to stabilize a company's current workforce through unreasonable

restraints are similarly unenforceable.

The agreement at issue here is unreasonable because it bars Labriola from

working in his �eld of expertise even where he takes no unfair advantage of his

former employer. The agreement speci�cally prohibits Labriola both “during and

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after termination of [e]mployment” from “perform[ing] any work in competition

with the services, sales and products of Employer” or “[b]ecom[ing] employed by

any business competing with Employer.” Ex. C, Clerk's Papers at 131-34. By

prohibiting Labriola from gaining lawful posttermination employment in such

broad-sweeping terms, the agreement represents an unfair attempt to stabilize

Pollard's workforce and secure its business against legitimate competition.

Postemployment restraints of this nature are never reasonable. Ekman v. United

Film Service, Inc., 53 Wash.2d 652, 657, 335 P.2d 813 (1959). Because the

noncompete agreement at issue is much more restrictive than reasonably

necessary to protect legitimate business interests, the agreement would be

unenforceable even if the requirements of consideration were met.

FOOTNOTES

1.   The employment agreement required an employee receive at least 10 days'

notice prior to the effective date of termination.

2.   Restrictive Covenant provision:For a period of three years after the

termination of this Agreement for any reason, the Employee shall not contract, in

any manner, for any reason, for or on behalf of any person or entity engaged, or

intending to engage in, a custom printing business, any customer, or prospective

customer of the Employer whose name is contained on any customer list which is

part of the con�dential information described above.Clerk's Papers (CP) at 12.

3.   ch. 19.108 RCW.

4.   Employee �led a motion to supplement the record concerning the CR 11

issue. Since we decline to reach that issue, we deny the Employee's motion to

supplement the record.

1.   Appellant argued the issue of reasonableness in Parts VI.A.7 and VI.C of the

brief.

2.   Ford v. Trendwest Resorts, Inc., 146 Wash.2d 146, 152, 43 P.3d 1223 (2002);

Thompson v. St. Regis Paper Co., 102 Wash.2d 219, 223, 685 P.2d 1081 (1984);

Roberts v. Atl. Rich�eld Co., 88 Wash.2d 887, 891, 568 P.2d 764 (1977); Webster v.

Schauble, 65 Wash.2d 849, 852, 400 P.2d 292 (1965).

3.   While Knight suggests that three years of continued employment may be

su�cient, our decision today does not establish what a reasonable or substantial

length of time is, only that continued employment was not su�cient consideration

here. Majority at 796.

4.   The Restatement provides: “In the case of a post-employment restraint, the

harm caused to the employee may be excessive if the restraint inhibits his

personal freedom by preventing him from earning his livelihood if he quits.”

7

Restatement (Second) of Contracts § 188, at 43 cmt. c (1981). See also 2 E.

Allan Farnsworth, Farnsworth on Contracts § 5.3, at 29 (3d ed.2004).

5.   The Restatement supports Washington law on this point: An employer

cannot “prevent or inhibit” its former employees from using the “normal skills of

their trade.” Restatement (Second) of Contracts § 188, cmt. (b) (1981).

6.   See Schmersahl, Treloar & Co., P.C. v. McHugh, 28 S.W.3d 345, 350

(Mo.Ct.App.2000) (holding, in part, that a noncompete agreement constituted an

unenforceable restrictive covenant in restraint of trade, since it did not seek to

protect proprietary information or customer contacts but, rather, the stability of

plaintiff's workforce).

7.   The Georgia court has observed, for example, that “[t]his court has held on

several occasions that a covenant wherein the employee agreed not to accept

employment with a competitor ‘in any capacity’ imposes a greater limitation upon

the employee than is necessary for the protection of the employer and therefore is

unenforceable.” Howard Schultz & Associates of the SE, Inc. v. Broniec 239 Ga.

181, 184, 236 S.E.2d 265, 268 (1977) (citing Dunn v. Frank Miller Assocs., 237 Ga.

266, 227 S.E.2d 243 (1976); Federated Mutual Ins. Co. v. Whitaker, 232 Ga. 811,

209 S.E.2d 161 (1974); Dixie Bearings, Inc. v. Walker, 219 Ga. 353, 133 S.E.2d 338

(1963)). Corbin says: “[P]ublic policy prevents the enforcement of a restraint

that is unconnected with a contract that has a purpose other than restraining

trade.” 2 Corbin on Contracts, § 6.19, at 340 (1995).

IRELAND, J.

ALEXANDER, C.J., JOHNSON, SANDERS, BRIDGE, CHAMBERS, OWENS and

FAIRHURST, JJ., concur.

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