other's performance. See Kerrigan, 278 N.E.2d at 393; Eaton v. Eaton, 233 Mass. 351, 124 N.E. 37 (1919). Thus, Balfour had an implied obligation to cooperate with McGinnis's "best efforts" to promote its products. McGinnis argues that Balfour's delivery problems and its policy eliminating small orders constituted a material breach of Balfour's obligations under the contract and therefore excused the covenant not to compete. Balfour contends that the problems did not amount to a material breach and therefore that the covenant is enforceable.
The severity and duration of Balfour's delivery problems is not clear from the evidence. In all likelihood, the problems were somewhat less severe than McGinnis claims but more serious than Balfour admits. Clearly, the problems had a significant impact on McGinnis's income and his ability to operate as a Balfour sales representative. Because of Balfour's problems, McGinnis lost at least four customers that accounted for $ 45,000.00 of his annual gross income. One of those customers was his largest single account. In addition, the elimination of smaller orders threatened another $ 10,000.00 of annual income. At a trial on the merits, the factfinder could reasonably find that Balfour had breached its obligation to cooperate with McGinnis's best efforts to sell its products. Balfour therefore has failed to establish that its likelihood of success on the merits is substantial.
Balfour also has not shown that it will suffer irreparable harm if the Court does not issue a preliminary injunction. Balfour argues that the potential injury to its customer goodwill in the Washington, D.C., area from McGinnis's continued competition is incalculable and irreparable. McGinnis states that he has not misled any Balfour customers. He has directed any calls concerning Balfour products to Balfour. Furthermore, he contends that he is pursuing the type of accounts that Balfour indicated it no longer wanted, that is government customers that purchase lower priced items in smaller quantities than corporate customers. Balfour never denied that it had changed its focus to corporate accounts. The policy against accepting small orders evidences Balfour's desire to move away from the clientele that McGinnis had built up over 24 years. Balfour cannot have it both ways. It cannot simultaneously argue that the smaller accounts are not profitable and yet insist that McGinnis's long term relationship with the representatives in charge of those accounts is invaluable. Balfour has already rejected the customer goodwill that it invokes as a basis for enforcing the noncompete covenant. It appears that Balfour simply wants to ensure that McGinnis cannot have what it does not want. Therefore, Balfour has not demonstrated that it will suffer irreparable harm if the Court does not issue a preliminary injunction in its favor.
For the same reasons, Balfour has failed to establish that the balance of harm weighs in favor of granting the preliminary injunction. Balfour notes that the noncompete covenant and the requested injunction enforcing it are limited in scope to McGinnis's former territory and in duration to two years. Balfour contends that McGinnis may sell any other type of product within territory 22 or he may sell recognition products anywhere else in the United States. Therefore, Balfour argues, the noncompete provision is reasonable and the harm to McGinnis is minimized. Although in theory McGinnis could move his business or sell other products, the effect of the preliminary injunction would be to put him out of the business that he has pursued for 24 years. On balance, the potential harm to McGinnis from eliminating his livelihood appears greater than the potential harm to Balfour from allowing him to continue pursuing clients in which it had lost interest.
Balfour has not demonstrated that the necessary factors weigh in favor of a preliminary injunction. Balfour's likelihood of success on the merits is not substantial. Although Massachusetts law enforces covenants not to compete in employment contracts, such covenants are excused by a material breach of the contract. McGinnis presented a strong argument that Balfour in fact breached its obligations under the Agreement and forced him to retire or lose his livelihood. Furthermore, Balfour did not demonstrate that it would suffer irreparable harm during the pendency of this action. Because Balfour is no longer interested in many of the customers that McGinnis served, any injury to the goodwill of those customers is not a serious injury to Balfour. On the other hand, an order preventing McGinnis from selling recognition products in the Washington, D.C., area would injure him significantly. For these reasons the plaintiff's motion for a preliminary injunction is denied. An appropriate Order accompanies this Opinion.
ORDER - February 14, 1991, Filed
This matter now is before the Court on plaintiff's motion for a preliminary injunction. Upon consideration of the entire record herein, for the reasons set forth in the accompanying Opinion it hereby is
ORDERED, that plaintiff's motion is denied.