American Broadcasting Companies v. Wolf

Citation. 22 Ill.52 N.Y.2d 394, 438 N.Y.S.2d 482, 420 N.E.2d 363 (1981)

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Citation22 Ill.52 N.Y.2d 394, 438 N.Y.S.2d 482, 420 N.E.2d 363 (1981)

Brief Fact Summary. Defendant is a sportscaster who was employed by Plaintiff. Defendant negotiated with another employer during the negotiation period and accepted an offer from them.

Synopsis of Rule of Law. Injunctive relief is not appropriate for employment contracts that have expired. Only a negative injunctive is appropriate for employment contracts that have not expired.

Points of Law - Legal Principles in this Case for Law Students.

Once the term of an employment agreement has expired, the general public policy favoring robust and uninhibited competition should not give way merely because a particular employer wishes to insulate himself from competition.

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Facts. Part of his contract was a three-month period when he would engage in negotiations for a new contract, followed by a period of time when he would not accept any job offer from anyone else without giving Plaintiff the opportunity to match it. If no agreement was reached, Defendant was not to accept another offer for a job as a sportscaster without presenting the offer to Plaintiff and giving Plaintiff the opportunity to match it within forty-five days.
Defendant met with CBS after the time period for negotiations had expired, but before the time period for first refusal had expired, and signed an employment agreement.
When Plaintiff found out about the employment agreement, they sued Defendant for breach of contract, seeking specific performance and injunctive relief.

Issue. Should Plaintiff get injunctive relief?

Held. No.
Defendant did not violate the contract to offer Plaintiff the right of first refusal, because he accepted CBS’s before that period of time began.
Throughout history, courts have been loath to enforce contracts for personal service with injunctive relief. After the Civil War, the Thirteenth Amendment prevented forced servitude.
The alternative would be a negative injunction, not one that would force Defendant to work for plaintiff, but one that would keep him from working for anyone else. That avenue is closed to Plaintiff because Defendant’s contract has already terminated.

Dissent. Defendant breached the contract to negotiate in good faith. The majority’s contention that Defendant did not violate the contract to offer Plaintiff the right of first refusal makes the contract meaningless as does the court’s refusal to enforce it.

Discussion. Injunctive relief is only available negatively for contracts for personal service and then, only before the contract expires.

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