Central Adjustment Bureau, Inc. v. Ingram

678 S.W.2d 28 (1984)

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Central Adjustment Bureau, Inc. v. Ingram

Tennessee Supreme Court
678 S.W.2d 28 (1984)

Facts

Central Adjustment Bureau (CAB) (plaintiff) was a debt-collection agency with offices throughout the country, including in Tennessee. CAB required its employees to sign noncompete agreements providing that during employment and for two years following termination of employment, employees were prohibited from (1) engaging in the collections business anywhere in the United States, (2) divulging or using any confidential business information of CAB, or (3) contacting clients or customers of CAB. Henry Ingram, a regional manager for CAB, along with a salesperson and a debt collector (the employees) (defendants) were employed in the Tennessee and Kentucky areas and were required to sign the noncompete agreement after a few days of beginning employment. The employees remained employed for between two and seven years, resigned in early 1979, and opened their own debt-collection agency located in Tennessee and Kentucky in March 1979. The new agency was able to attract CAB clients using CAB’s competitive information and goodwill. CAB filed suit against the employees seeking compensatory and injunctive relief. The lower court held that the noncompete agreement was unreasonably broad and enforced it to the extent reasonable. An appeal followed.

Rule of Law

Issue

Holding and Reasoning (Drowota, J.)

Dissent (Brock, J.)

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