North Pacific Lumber Company (North Pacific) (plaintiff), a wholesaler of lumber products, employed Les Oliver (defendant) as a lumber trader in its hardwood division. As part of Oliver’s employment contract, he agreed to refrain from competing with North Pacific for two years following the termination of his employment. In April 1976, Oliver quit and shortly thereafter went to work for Tree Products Company, a competitor of North Pacific. North Pacific brought suit against Oliver. At trial, Oliver produced considerable evidence of fraudulent or otherwise activities by North Pacific, the most serious of which was that departmental managers encouraged fraudulent misrepresentation of settlement amounts when lumber traders settled disputes between suppliers and customers. North Pacific would pocket the difference between the settlement amount paid by one party and the amount received by the other party as profit. On the basis of these practices, the trial court denied enforcement of the employment contract on the ground of unclean hands. North Pacific appealed.