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Boisen v. Petersen Flying Serv., Inc - 222 Neb. 239, 383 N.W.2d 29 (1986)

Rule:

To distinguish between "ordinary competition" and "unfair competition," courts and commentators have frequently focused on an employee's opportunity to appropriate the employer's goodwill by initiating personal contacts with the employer's customers. Where an employee has substantial personal contact with the employer's customers, develops goodwill with such customers, and siphons away the goodwill under circumstances where the goodwill properly belongs to the employer, the employee's resultant competition is unfair, and the employer has a legitimate need for protection against the employee's competition.

Facts:

Appellant Petersen Flying Serv., Inc., a corporation, performed aerial chemical spraying for farms. After appellee Boisen obtained a pilot license, he began working for the former as a spray pilot. Appellee employee signed an agreement not to compete as a condition of employment, which restricted appellee from obtaining similar employment for 10 years within a 50-mile radius of the county. Appellee filed an action to declare the post-employment restraint unenforceable, which the trial court granted. The corporation appealed.

Issue:

Can an employer impose a post-employment restraint on its former employee?

Answer:

No

Conclusion:

The court affirmed judgment against appellant and found the covenant unenforceable because appellant failed to show any special circumstance affecting a legitimate business interest to be protected against ordinary competition. In particular, appellee had no personal or business-based contact with customers, did not acquire confidential information, and received no special on-the-job training to justify the covenant.

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