Marine Contractors Co., Inc. v. Hurley

For a number of years, Thomas Hurley (defendant) worked for Marine Contractors Co., Inc. (Marine) (plaintiff) as a marine specialist. Marine was a Boston company that did a variety of specialized marine repair work in the area. Marine created an employee retirement trust for its permanent employees, like Hurley. Under the trust agreement, employees who left Marine for any reason other than retirement at 65 or disability would have their share put into a separate savings account held by the trustee for five years. The trustee would not distribute the funds until after the five-year period. When Hurley informed Marine that he would be leaving the company, Marine offered to give Hurley his share of the trust in exchange for his promise not to compete with Marine. Hurley agreed, and he and Marine executed a document stating that Hurley would not compete with Marine for five years “in consideration of ONE DOLLAR ($1.00) and other good and valuable consideration.” The agreement also stated that the parties had “set their hands and seals” to it. Hurley received his full trust share, approximately $12,000, that same day. Nevertheless, a few months later, Hurley began to perform similar marine work near Boston and even for some of Marine’s customers. When Marine told Hurley that he was violating the agreement, Hurley said that he did not intend to comply. Marine sued Hurley, seeking an injunction to force Hurley to comply with the non-compete agreement. Hurley argued that there was insufficient consideration for the agreement not to compete. The court, however, found both that the agreement had the effect of a sealed instrument not requiring consideration and that the payment of the trust share was sufficient consideration anyway. The trial court granted the injunction. Hurley appealed.