This action relates to the basic validity and equitable enforceability of a restrictive covenant embodied in and ancillary to a contract of employment entered into by the parties on November 27, 1948.
The negative covenant to which the defendant and a fellow employee subscribed reads as follows:
"3. Said employees do further agree that upon the termination of their said employment that they will not directly or indirectly, as
agent, servant, employee or representative, be connected with or concerned in any business or employment either as agent, servant, employee, stockholder or representative in any business which engages in the purchase or sale of suet, fats, bones, grease, skins or hides, or any business which renders animal by-products making tallow or cracklings, for a period of eighteen months after said termination with the employer herein, said territory restricted to said employees in which they hereby covenant not to engage in competition with the employer after the termination of said employment shall be the State of New Jersey and within a radius of one hundred miles of the City of Scranton, Pennsylvania, said territory being recognized by the parties hereto as being that which is presently covered by the employer herein;
"4. Nothing herein contained shall be construed to prevent the employer from terminating the employment of the employees at any time nor shall this agreement be construed from preventing, in any way, the employees on their own behalf terminating said employment with the employer. The purpose and intent of the parties hereto is to prevent said employees, after their termination of employment with the present employer, R.L. GUTTRIDGE, INC., from entering into a competing business, either directly or indirectly, within the territory covered by said employer."
I stated in my decision in Silbros, Inc. v. Solomon , 139 N.J. Eq. 528 (Ch. 1947), in which a copious citation of pertinent authorities may be found, that neither public policy nor the judicial decisions of recent years have disapproved of contracts in restraint of trade between employer and employee where the restraint is reasonably necessary for the protection of the business of the employer and not unreasonably restrictive in point of time or territory upon the rights of the employee. See, also, Pilgrim Coat, Apron, &c., Inc. v. Krzywulak , 141 N.J. Eq. 212 (Ch. 1948); Schlossbach v. Francis-Smith , 3 N.J. Super. 368 (Ch. 1949).
The present case is submitted to me for determination by consent of counsel upon the consideration of the contract, the admissions contained in the pretrial order, and the transcript of the testimony of the defendant taken pursuant to Rules 3:29 and 3:30.
The employment of the defendant by the plaintiff originated on December 8, 1947. The plaintiff is engaged in the business of purchasing meat scraps, such as fats, suet, bones,
hides, skins, and kindred products to be thereafter processed. The defendant and the other subscriber to the contract, and perhaps others, were employed to solicit customers from whom such materials could be regularly obtained.
In November, 1948, experience caused the plaintiff to recognize the wisdom of protecting its business and its commercial relationship with the sources of the desired materials by restricting its field representatives such as the defendant from impulsively terminating ...