Mitchell v. Reynolds case brief summary

Mitchell v. Reynolds

(England 1711)

*According to Minda, this is the most famous commercial case that has ever been decided.

 

Facts: Plaintiff hired defendant as an apprentice baker. Defendant promised not to compete with plaintiff in the local parish for a period of time in return for training in the bakery business.

 

Issue: Did the non-compete agreement constitute a naked restraint of trade?

 

Holding: No. Court held that promise was necessary in order for the plaintiff to be motivated to hire individuals like defendant.

 

Reasoning: Court found that although there is a restraint of trade here, the non-compete agreement constituted an ancillary/incidental restraint necessary to accomplish a larger economic/legitimate purpose. Since the underlying purpose of the agreement was to train defendant, the restraint is said to be reasonable.

 

Rule of Law: Reasonableness is to be the test to determine the legality of a restraint of trade.

 

Case introduced the rule of reason analysis.