Reier Broadcasting Co. v. Kramer

Supreme Court of Montana · 2003 · Contracts

Contractsinjunctionspecific performancepersonal services contractnegative covenantexclusive servicesemployment agreementMontana

Facts

Reier Broadcasting entered into an employment agreement with Michael Kramer, MSU's head football coach, under which Reier paid Kramer $10,020 per year for exclusive broadcast rights, including his participation on a weekly program and recording commercials. The contract, effective through November 2004, included an exclusivity clause barring Kramer from performing on or permitting his name to be used with any other radio or television station or program without Reier's written consent. After Reier's separate exclusive rights to broadcast MSU athletic events expired in 2002, MSU awarded those rights to Clear Channel and told Kramer he was expected to provide interviews to Clear Channel despite the exclusivity clause. Reier sought and briefly obtained a temporary restraining order, but the District Court later dissolved it and denied further injunctive relief.

Issue

Whether § 27-19-103(5), MCA, permits a court to issue an injunction enforcing the exclusivity clause of a personal services contract by preventing the employee from performing services elsewhere during the contract term. More specifically, the question was whether such an injunction would be an impermissible indirect specific enforcement of a personal services contract.

Rule

Under § 27-19-103(5), MCA, an injunction cannot be granted to prevent the breach of a contract whose performance would not be specifically enforced. Because § 27-1-412(1), MCA, bars specific enforcement of obligations to render personal service, Montana courts may not use injunctive relief to enforce negative covenants in personal services contracts when doing so would indirectly compel performance of the affirmative obligations of the contract.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Billings, Montana, Summit Plains Media signed a two-year agreement with Elena Ortiz, a popular local chef, to host a weekly cooking segment and record sponsor spots. The contract required Elena not to appear on any competing radio or television program without Summit Plains Media's written consent. After a rival station in Missoula hired Elena for a similar show, Summit Plains Media sued to enjoin her from appearing there until the contract expired.

Under the majority rule, should the Montana court grant the injunction?

Explanation. The majority held that § 27-19-103(5), MCA, bars an injunction to prevent breach of a contract whose performance would not be specifically enforced, and § 27-1-412(1), MCA, bars specific enforcement of obligations to render personal service. A host-and-spokesperson agreement like this is a personal services contract. Enjoining Elena from working for a rival would functionally leave her able to perform only for Summit Plains Media, which is indirect specific enforcement and therefore prohibited.