Robbins v. Finlay

Beginning in 1971, Douglas Finlay (defendant) worked as a hearing-aid salesman for A. Clayton Robbins, doing business as Beltone Utah (Beltone) (plaintiff). Finlay had previously sold hearing aids for other Beltone distributors in Canada, so he did not need any sales training from Beltone before he started. In 1974, Finlay signed an employment contract with Beltone that provided, among other things, that Beltone would give Finlay a list of customer leads (i.e., prospective and actual hearing-aid users). The contract described the list as Beltone’s trade secret and specified damages of $5,000 if Finlay used the list in any way that damaged Beltone. Finlay’s employment contract also included a noncompetition clause prohibiting Finlay from selling or servicing hearing aids in Beltone’s Utah service area for one year after his employment with Beltone ended. The noncompetition clause specified damages of $3,000 plus attorney fees for breach of the provision. In December of 1975, Finlay left Beltone and opened his own hearing-aid business in Salt Lake City. Beltone sued Finlay in Utah state court, asserting that Finlay had breached his covenant prohibiting the unauthorized use of the customer-leads list and his covenant not to compete. At trial, Beltone presented evidence that Finlay had sold non-Beltone hearing aids to customers identified through Beltone hearing clinics and that Finley had a list from Beltone with the names and addresses of 154 potential customers. Finlay did not dispute that he had competed with Beltone within Beltone’s service area. However, Finlay argued that the noncompetition clause in his employment contract was unenforceable because it unreasonably restricted his ability to work as a hearing-aid salesman, which Finlay described as a common calling. The jury found that Finlay had breached his employment covenants and awarded Beltone damages of $8,000 for breach of the two provisions, plus $2,500 in attorney fees. Finlay appealed.