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Golden v. Orkin Exterminating Co.
Citations: 236 Ark. 428; 366 S.W.2d 713; 1963 Ark. LEXIS 641Docket: 5-2955
Court: Supreme Court of Arkansas; April 15, 1963; Arkansas; State Supreme Court
Carleton Harris, Chief Justice, presided over a case involving Jimmy Lee Golden, who signed an employment contract with Orkin Exterminating Co. on January 18, 1961. The contract stipulated that Golden could not solicit or divert any customers of Orkin for pest control services during his employment and for two years after termination. This restriction applied specifically to the cities of Hot Springs, Malvern, and Arkadelphia, as well as any area within five miles of these locations where he had worked for at least 90 days in the previous year. After resigning from Orkin on May 31, 1962, Golden accepted a position with Arab Termite and Pest Control Company. On July 13, 1962, Orkin filed for an injunction to prevent Golden from competing within the designated territory for two years. The complaint was later amended to include Daniel C. Dykes, a former Orkin employee. Both defendants admitted prior employment with Orkin but denied other allegations. Following a trial, the court ruled that Golden was bound by the non-compete terms of his contract and could not engage in pest control work in the specified areas. Golden is enjoined from operating in the termite and pest control business for two years from May 31, 1962, covering a radius of five miles beyond the corporate limits of Hot Springs, Arkadelphia, and Malvern. The appeal focuses on whether the Chancellor's injunction is valid, particularly regarding the five-mile extension beyond the city limits. The appellants argue that the contract only allows for an injunction within the corporate limits. Citing a precedent case, Orkin Exterminating Co. v. Murrell, where a broader radius was deemed reasonable, the court finds that while the extension beyond Arkadelphia and Malvern is unjustified, the five-mile radius around Hot Springs is reasonable due to Golden's activities in adjacent areas, including Lake Hamilton and Lake Catherine. The court emphasizes that the interpretation of ambiguous contracts should consider the parties' actions and understanding. Consequently, the court modifies the injunction to limit it solely to the corporate limits of Malvern and Arkadelphia, while upholding the broader scope around Hot Springs. The case is remanded for further action consistent with this opinion, while other issues, including damages against Dykes and Arab Termite and Pest Control Co., remain unresolved.