## Facts

- Gordon S. Wood operated a horseshoeing business and hired William R. May in November 1961 as an apprentice horseshoer.
- In January 1962, the parties signed a written agreement under which Wood would teach May horseshoeing, and May agreed to a post-employment covenant not to compete.
- The covenant barred May, for five years after leaving employment (by resignation or discharge), from engaging in horseshoeing or blacksmithing within a 100-mile radius of Wood’s shop; the contract authorized injunctive relief for breach.
- Over roughly two years, May advanced quickly, became the primary contact for many customers, and developed customer confidence while working for Wood.
- In March 1964, May resigned and promptly opened a competing horseshoeing business in Tacoma, about five miles from Wood’s location.
- May obtained a substantial number of Wood’s customers in Pierce County and on Vashon Island.
- Wood’s business was concentrated in Pierce County and on Vashon Island, though it occasionally served a small number of customers as far as nearly 100 miles away.

## Issues

1. Whether post-employment restrictive covenants are void as against public policy.
2. Whether the covenant lacked adequate consideration.
3. Whether the five-year duration and 100-mile territorial restriction were unreasonable.
4. If unreasonable in scope, whether a court in equity may modify the covenant and enforce it as modified.

## Decision

- The Washington Supreme Court reversed the trial court’s dismissal and remanded for entry of injunctive relief enforcing the covenant as modified.
- The court held employee noncompetes are not per se void; they are enforceable if reasonable and necessary to protect legitimate employer interests.
- The court held the covenant was supported by adequate consideration, including Wood’s promise to train May and provide employment.
- The court agreed the covenant’s written scope (five years and 100 miles) was broader than necessary, given the actual area of Wood’s operations.
- The court rejected an all-or-nothing “indivisible covenant” approach and authorized equitable limitation of the restraint to a reasonable time and geographic area.

## Legal Principles

- Post-employment noncompete agreements may be enforced when they are reasonable and no greater than necessary to protect the employer’s business or goodwill.
- Training provided to an employee and the employment relationship may constitute sufficient consideration for a noncompete promise.
- An employer has a protectable interest in customer goodwill and customer relationships developed through the employee’s work on the employer’s behalf.
- Overbroad restraints may be partially enforced in equity by narrowing unreasonable time and territorial limits to what is reasonable under the circumstances.

## Conclusion

The court held that an employee noncompete is enforceable when reasonable and supported by legitimate employer interests and consideration, and it directed enforcement through an injunction limited to a reasonable duration and geographic area rather than invalidating the covenant for overbreadth.


Wood v. May, 73 Wash. 2d 307, 438 P.2d 587 (Wash. 1968)