Reier Broadcasting Company, Inc. v. Kramer

Brief Fact Summary. The contention Reier Broadcasting Company Inc. (Reier) (P) had with Kramer (D) was that the personal services employment it had with Kramer (D) was not subject to a state statute that prohibited the use of an injunction to prevent a breach of contract that could not be specifically enforced.

Synopsis of Rule of Law. A statute which applies to a negative covenant in a personal services employment agreement and which provides that an injunction may not prevent the personal services from being performed elsewhere during the life of the contract is a statue that provides that an injunction may not be granted to prevent the breach of a contract, the performance of which would not be specifically enforced.

Facts. A broadcasting company, Reier Broadcasting Company, Inc. (Reier) (P), had exclusive rights to broadcast certain university athletic events until 2003. The company also entered into an employment contract for exclusive rights with Kramer (D), who was the university’s head football coach. The employment contract with Kramer (D) was to terminate in 2004 and also provided that Kramer (D) was not to provide similar services to any other broadcaster.
On the expiration of the contract between the university and Reier (P) in 2002, the university sought bids from other broadcasters. Part of the requirements the university specified in its advert was that the successful offeror to broadcast interviews and conduct a commentary program with Kramer (D). This particular clause was noticed by Reier (P) and this contravened the Reier-Kramer’s employment agreement. Request to change the proposal was turned down by the university, who later awarded the contract to Clear Channel Communication (Clear Channel) and directed Kramer (D) to provide interviews to Clear Channel despite the exclusivity clause in his contract with Reier (P).
A temporary restraining order (TRO) and injunction was filed against Kramer (D) by Reier (P) to prevent Kramer (D) from providing services to Clear Channel. The prayer of Reier (P) on the temporary restraining order was granted but his prayer for the conversion to an injunction was denied by the court on the ground that the state statute prohibited the issuance of an injunction to prevent the breach of a contract, the performance of which would not be specifically enforced. The move of Reier (P) to change or amend the court’s judgment was denied but the state’s highest court granted review.

Issue. Is a statute which applies to a negative covenant in a personal services employment agreement and which provides that an injunction may not prevent the personal services from being performed elsewhere during the life of the contract, a statute that provides that an injunction may not be granted to prevent the breach of a contract, the performance of which would not be specifically enforced?

Held. (Leaphart, J.) Yes. A statute which applies to a negative covenant in a personal services employment agreement and which provides that an injunction may not prevent the personal services from being performed elsewhere during the life of the contract is a statue that provides that an injunction may not be granted to prevent the breach of a contract, the performance of which would not be specifically enforced. The trial court reliance on a state statute which provides that “an obligation to render personal services” cannot be specifically enforced and it’s reasoning that since the contract between Reier (P) and Kramer (D) was one for personal services could not be specifically enforced, so that it could not be enforced by injunction, is right. And this position of the court is sound. Affirmed.

Dissent. (Cotter, J.) the statute involved here would not be contravened if the negative covenant in the contract between Reier (P) and Kramer (D) is enforced, nor would it serve as an indirect enforcement of the affirmative part of the contract. A party is estopped from denying the validity of binding force of the contract once the party has accepted and used the benefits that is has contractually secured for itself. Hence, apart from the enforcing the negative covenant by injunction, the university and Kramer (D) should be estopped from contending the contract’s enforceability.

Discussion. Pertaining to this particular case, the Restatement (Second) position stipulates in S367(2) that an injunction will not be issued if the probable result would be to compel an “undesirable” continuance of personal relations or “to leave the employee without other reasonable means of making a living”. Also, in reaching its conclusion in this case, the court relied on California precedent (Anderson v. Neal Institutes Co., 37 Cal. App. 174, 173 P. 779 (Cal. Ct. App. 1918)