Packers Supply Co. v. Eric H. Weber et al.

A corporation filed suit against two of its former employees for violating the terms of a non-compete agreement. The defendants argued that the agreement was rendered unenforceable by changes in the structure of the business and their relationship to it after the agreement was executed. The business was originally a sole proprietorship, and the defendants worked for it as independent contractors. Several years later, the business was chartered as a corporation, but with no change in its ownership or in its day-to-day operations. The defendants became employees of the corporation while keeping the same compensation, working conditions and duties as before. The trial court granted summary judgment to the employees, ruling that the corporation had no standing to sue because it was not a party to the original agreement. We reverse, because the non-compete agreement was assigned to the corporation by operation of law.