William Ollendorff v. Ira Abrahamson

Summary

The Supreme Court upheld an injunction preventing a former employee from engaging in competitive business for five years as stipulated in his employment contract. Abrahamson worked for Ollendorff's embroidery export business until 1916, then returned to manage a competing firm. The Court rejected arguments that the non-compete clause was void for lack of mutuality or unreasonable restraint of trade, applying Civil Code Article 1255 and adopting the modern rule that trade restraints are valid if reasonable and necessary for employer protection. The Court held that negative covenants can be enforced by injunction without proving pecuniary damages, as continuing breach constitutes irreparable injury. This landmark decision established Philippine jurisprudence on employment non-compete agreements and injunctive relief for contract breaches.