## Facts

- National Oil Company, Inc. (National), a Wisconsin corporation, served as a Phillips Petroleum Company, Inc. (Phillips) fuel-oil jobber in the La Crosse, Wisconsin area for about 17 years before May 31, 1963.
- The Phillips–National jobbership agreement was a year-to-year contract that either party could end as of May 31 by giving 90 days’ notice.
- Despite the short-term, terminable arrangement, National made substantial investments in its distribution operation (land, buildings, tanks, and equipment).
- National’s fuel-oil business depended heavily on route sales and delivery work performed primarily by two commission-based route men, including National’s leading salesman, Stellick (and also Howarth).
- Stellick was paid by commission (a set amount per gallon sold and delivered), had long-standing customer contacts, and was viewed as controlling a large volume of business through personal relationships.
- Stellick and Howarth each owned his own truck; National provided a tank installed on the truck. National treated them in ways consistent with an employment relationship for certain purposes, but there was no written contract setting a term of employment.
- National maintained written customer lists it regarded as its property, but evidence showed Stellick could recreate much of the customer information from memory.
- In early February 1963, Phillips decided it would not renew National’s jobbership for the term beginning June 1, 1963, because Phillips believed National was not reaching the market’s potential.
- Phillips gave National notice of nonrenewal and arranged for Scott Burgess to become the Phillips jobber in the territory starting June 1, 1963.
- Around the time Phillips notified National of nonrenewal, Phillips personnel contacted Stellick and encouraged him to associate with Burgess as a route salesman after June 1 so that the gallonage tied to Stellick’s customer relationships would remain with Phillips’ distribution system.
- Stellick did not join Burgess; instead, he left National and started his own business.
- National soon went out of business and sued Phillips in federal court, claiming Phillips tortiously interfered with National’s relationship with Stellick. After National presented its evidence at trial, Phillips moved for a directed verdict.

## Issues

1. Whether National presented sufficient evidence that it had a legally protectable relationship with Stellick (contractual or business expectancy) that could support a tortious interference claim, given the lack of a fixed term and the ability of either side to end the arrangement.
2. Whether Phillips’ conduct—after lawfully electing not to renew the jobbership and selecting a successor jobber—constituted unjustified or improper interference when Phillips encouraged Stellick to leave National and associate with the successor jobber.
3. Whether, viewing the evidence most favorably to National, a reasonable jury could find that Phillips used improper means (such as fraud, coercion, or other independently wrongful conduct) sufficient to impose liability rather than treating Phillips’ actions as permissible competitive behavior.

## Decision

- The court granted Phillips’ motion for a directed verdict at the close of National’s evidence and entered judgment for Phillips.
- The court treated Phillips’ nonrenewal of the year-to-year jobbership contract as undisputedly within Phillips’ contractual rights.
- The court concluded that Phillips’ efforts to persuade Stellick to work with the new jobber after June 1 did not, on the proof offered, amount to actionable tortious interference under Wisconsin law.
- Because National’s showing did not support a finding of improper methods or other legally wrongful conduct, the case could not properly go to the jury.

## Legal Principles

- A tortious interference claim requires proof of intentional interference with a contract or a business relationship and resulting damage; liability depends on whether the interference was unjustified under the circumstances.
- When the relationship allegedly interfered with is indefinite in duration or terminable at will, the plaintiff’s protectable interest is limited, and competitive solicitation is generally not actionable unless accompanied by improper means.
- Lawful exercise of one’s own contractual rights (including choosing not to renew a terminable agreement) is not, by itself, wrongful interference.
- A defendant pursuing a legitimate business objective may seek to hire or associate with another’s at-will workers or agents for future business, so long as the defendant does not employ fraud, threats, coercion, or other independently unlawful conduct.
- On a motion for directed verdict, if the evidence (even when taken in the light most favorable to the plaintiff) would not permit a reasonable jury to find the essential elements of unjustified interference, judgment should be entered for the defendant.

## Conclusion

Because Phillips had the contractual right to end the year-to-year jobbership and National’s relationship with Stellick was not shown to be protected by a fixed-term agreement, Phillips’ encouragement of Stellick to work with the successor jobber—without proof of fraud, coercion, or other wrongful conduct—was not actionable tortious interference, so the court directed a verdict for Phillips.


National Oil Co. v. Phillips Petroleum Co., 265 F. Supp. 320 (1966)