In DCS Sanitary Management V

question 458

Multiple Choice

In DCS Sanitary Management v. Castillo, where a company had employees agree not to work for any competitors within 100 miles of any customer of DCS, the appeals court held that the agreement:

• A) was a valid restraint on competition since such agreements are legal unless they violate the antitrust laws
• B) violated public policy and that the company must pay damages to the employees
• C) was not enforceable due to lack of consideration
• D) was a reasonable restraint on competition that could be enforced
• E) none of the other choices

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Definitions:

Operating Lease

A leasing arrangement that allows for the use of an asset without transferring ownership rights, typically treated as an operating expense in financial statements.

Long-Term Asset

An asset that is expected to provide economic benefits to a business for more than one fiscal year, such as property, plant, and equipment.

Revenue Expenditure

A type of expenditure that does not result in the acquisition of long-term assets and is rather incurred in the day-to-day operations of a business.

New Equipment

Recently acquired or installed machinery or tools intended for operational or productive use in an organization.