An Alabama Appeals Court ruled recently that a petroleum products salesman was bound by a non-compete agreement after receiving a $100 weekly bonus. Eastis v. Veterans Oil, Inc., 2010 WL 5130629 (Ala. App. 2010). In this case, the employee signed a non-compete agreement and received a $100 a week bonus after doing so.
After being laid off, Eastis went to work for a competitor. After soliciting his former clients, Eastis and his new employer got a letter from his former employer warning him to end his violation of his employment agreement or risk a lawsuit. Eastis pro-actively filed a declaratory judgment action trying to establish that his agreement was unenforceable. The Trial Court ruled against Eastis and he appealed.
On appeal, he argued that the enforcement of the agreement represented an undue hardship because he couldn’t be employed in any other field and thus was unenforceable under Alabama law. Ultimately the Court of Appeals issued split on his argument. With one judge dissenting, the majority of the Court held that the overwhelming majority of Eastis’ work life had been outside of the petroleum products industry and thus enforcing the agreement was not a hardship.