A contractor brought suit to enforce a restrictive covenant with an excavator, prohibiting it from engaging in the excavating business in the county for two years after termination of their agreement.

In 1992, McKibben, the contractor, and Wagler, the excavator, entered into a written lease-partnership agreement in which the contractor would purchase the exc avating equipment and lease it to the excavator for his business. The agreement provided that Wagler would make payments to McKibben under the lease; Wagler would share the profits with McKibben; Wagler would provide McKibben with priority excavation services at below market rates; and, that should the agreement be terminated, Wagler would be prohibited from the excavating business in Howard County, Indiana for two years.

McKibben invested substantial sums for excavating equipment for leasing to Wagler. In 1995, McKibben terminated the lease because Wagler was in default of the terms and Wagler returned the equipment to McKibben. Wagler leased other equipment and continued business in Howard County.

The Circuit Court granted the contractor injunctive relief, restraining the excavator from pursuit of his trade within the county for two years. The excavator appealed.

In Wagler Excavating v. McKibben Construction, 675 N.E. 2d 155 (Ind.App. 1997), the appeals court reversed the trial court stating that public policy prohibits any unnecessary interference with the earning of a livelihood. "Indiana courts will strike down any restrictive covenants which are the least bit overly broad with respect to the 'protectible interest,'" particularly where minimal. "The restrictive covenant here is designed to dissuade Wagler from breaching the terms of the agreement by imposing a penalty upon the termination of the relationship. McKibben has an adequate remedy at law by pursuing an action in damages for Wagler's breach of the terms of their contract."

The trial court was in error by imposing an injunction because the restrictive covenant was unenforceable.