Runzheimer Int'l, Ltd. V. Friedlen

David Friedlen (defendant) had been an at-will employee at Runzheimer International, Ltd. (Runzheimer) (plaintiff) for more than 20 years. Runzheimer implemented a new requirement that all employees sign a restrictive covenant. The restrictive covenant stated that Runzheimer employees were not permitted to work for a competitor within 24 months of separation from Runzheimer. A Runzheimer representative told Friedlen that if he did not sign the restrictive covenant, he would be fired. Friedlen signed the covenant. Approximately two years later, Runzheimer legally terminated Friedlen. After a lawyer hired by Friedlen determined that the covenant was unenforceable, Friedlen then went to work for a competitor of Runzheimer. Runzheimer then filed a complaint against Friedlen, arguing that he breached the restrictive covenant. Runzheimer argued that the covenant was valid because Runzheimer promised employment in exchange for Friedlen’s signing of the covenant. Friedlen maintained that the covenant was invalid because Runzheimer did not provide the requisite consideration for Friedlen’s agreement. Friedlen argued that since he was an existing employee of Runzheimer’s, there was no exchange of benefits or detriments. According to Friedlen, Runzheimer’s promise of continued employment did not alter Runzheimer’s situation. The trial court ruled in favor of Friedlen, arguing that Runzheimer made an illusory promise of continued employment to Friedlen. According to the court, such a promise could not constitute consideration for Friedlen signing the covenant. Runzheimer appealed. The court of appeals certified the case for the state supreme court.