Millward v. Gerstung International Sport Education, Inc.

Digges, J., delivered the opinion of the Court. This is an appeal from an amended decree entered June 15, 1972 in the Circuit Court for Baltimore County by Judge John E. Raine, Jr. By that decree the appellant, Horace Douglas Millward, was enjoined until September 4, 1973 from engaging in Baltimore County in the operation of any summer camp, physical education or sports instruction for children. And, the injunction specifically referred to a camp operated by Sports Camps, Inc. This case began when the appellee, Gerstung International Sport Education, Inc. filed a bill of complaint seeking to enjoin Millward, who once worked for Ger-stung, Inc., from engaging directly or indirectly in any competing business. The requested relief was sought because of an alleged violation of paragraph three of Mill-ward’s contract of employment which provided that: “ [Millward] also agrees that he will not for a period of two (2) years after the termination of this Agreement or any renewal period thereof, directly or indirectly, engage in the same or similar business, namely Gerstung Inter-Sport activities, physical education or sport instructions of any kind in the City of Baltimore or the surrounding counties where programs of the School are conducted, either individually or as ⁴⁸⁵ a member of a firm or as a stockholder in a corporation.

He further agrees never to solicit, directly or indirectly, divert or take away any of the patronage of the School.” The chancellor, after a full hearing, determined that this restriction was enforceable and Millward was in violation of the non-competition covenant; he, therefore, granted the injunction. This appeal followed. The evidence adduced at the hearing discloses that Gerstung, Inc., whose founder and president is Siegfried Gerstung, has for the last eight years operated for private elementary school children in the northern Baltimore County area a physical education program in winter and a day camp in summer. Appellee’s program, as described by Mr. Gerstung, is the first in Maryland to introduce a European method of movement education.

This method is basically an elementary school program. It initially stresses tumbling, gymnastics and swimming, rather than team sports, and emphasizes a child’s awareness of his limbs, his body, and what they can do. This is followed by an introduction to the team sports as the child gets older. Mr. Gerstung first met appellant in the spring of 1968 and because he felt that Millward’s unique qualifications would make him an invaluable asset to the corporation, he was employed.

Millward was considered ideal for a teaching and camp counselor position because of his past experiences and their publicity value. Appellant was well known in the Baltimore area since he had been much publicized as the coach for the now defunct professional soccer team, the Baltimore Bays, especially in 1967 when he coached his team to the championship of the Eastern Division of the league. Because of this, Gerstung, Inc. issued numerous promotional and press releases to advertise Millward’s association with the corporation. In addition to his ability as a soccer player and coach, Millward is a qualified instructor of tennis, cricket, swimming and life saving. ⁴⁸⁶ Appellant began work for Gerstung, Inc. in 1968, without a written contract, as a camp counselor in summer and a teacher in winter.

On September 4, 1969, he signed a one-year contract and took on additional duties as director of operations of Gerstung, Inc. In this position he was in charge of running the fall Saturday camps; helped teach in the schools; and contacted and negotiated with owners of prospective sites for the location of new summer camps. At the time of signing this employment contract, there was discussion and negotiation between Mr. Gerstung and appellant about the wording of the non-competition clause but Millward finally agreed to a provision which prohibited him from competing against the appellee for a stated period after the termination of his employment. Mr. Gerstung testified that he was so pleased with Millward’s performance as an employee that from time to time he increased his duties and responsibilities. On September 4, 1970 a new one-year contract, containing the two-year non-competition covenant in question here, was signed and Millward became director of the summer camps.

One year later Mill-ward was re-employed, but without a written contract, to serve as a full time teacher. To enable appellant to supplement his income, Gerstung waived part of the restrictive covenant and Millward was permitted to give private tennis instructions. Additionally, he was given a job with a corporation affiliated with Gerstung, Inc. that sold sporting equipment. Millward continued in appellee’s employ under the oral contract for a few months.

Then, on December 18. 1971 he wrote to Mr. Gerstung to inform him of his resignation. However, Millward realized that his immediate departure could cause hardships to Gerstung, Inc. in fulfilling its contractual obligations and so he offered to continue teaching until a replacement could be found. On January-10, 1972, the resignation was accepted but appellant was hired as a substitute or part-time teacher at a salary of $30.00 per teaching day. Finally, in February 1972, relations between Gerstung, Inc. and appellant were completely severed when Millward wrote Mr. ⁴⁸⁷ Gerstung to inform him of his affiliation with a competitor, Sports Camps, Inc. With his new employer, Millward was to be director of a new summer camp which was planned to be located in Baltimore County very close to Gerstung’s camp.

This camp would cater to the same clientele as appellee’s