Scott

ORDER GRANTING PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

This case involves a dispute arising from the termination of a number of virtually identical franchise agreements for the operation of temporary personnel service (TPS) agencies under the Snelling and Snelling name between the plaintiffs and defendant, and the subsequent formation of competing businesses by the plaintiffs. Plaintiffs brought this action upon their termination of the agreements seeking damages for breach of contract, rescission and a declaratory judgment. Snelling counterclaimed, alleging breach of contract and unfair competition; it seeks damages and injunctive relief. The parties have made cross-motions for partial summary judgment on the single issue of whether the covenants restricting competition in the franchise agreements are enforceable against the plaintiffs.

I. FACTUAL BACKGROUND

The undisputed facts which gave rise to this case are as follows. In late 1985, plaintiffs David E. Ray, Leigh Gardner Ray and Terry Scott entered into a franchise agreement with Snelling to operate a TPS in Walnut Creek, California, under the Snelling name. The agreement provided, inter alia, for the support…