792 F. Supp. 2d 786
E.D. Pa.2011Background
- Colorcon, Inc. sues former employee Aminah-Iman Lewis and Sensient Technologies Corp. over a non-competition agreement and trade secrets implications.
- Lewis, terminated from Colorcon for poor sales performance in 2010, began working for Sensient in December 2010 as an inside sales representative in St. Louis.
- Lewis signed a 2004 employment agreement with Colorcon containing a confidentiality clause and a two-year non-compete; a severance agreement was signed upon termination in 2010.
- Colorcon alleges Lewis’s Sensient employment and related activities violate the non-compete and threaten trade secrets; Sensient asserts no violation.
- Court held a three-day preliminary injunction hearing and denied Colorcon’s motion for a preliminary injunction, finding likely non-enforceability of the non-compete and no imminent harm.
- Key factual questions focus on whether the term “technical areas” in the non-compete covers Lewis’s sales role and pharmaceutical coatings given overlap and differences between food and pharmaceutical coatings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lewis breached the non-compete or related covenants | Colorcon contends Sensient's sales role in pharmaceutical coatings breaches 'technical areas'. | Lewis's role is in sales, not a technical area; food and pharma coatings are distinct technical areas; non-solicitation may not be covered. | No likelihood of breach; 'technical areas' narrowly construed to exclude sales; covenant unenforceable. |
| Whether the non-compete is enforceable under Pennsylvania law | Non-compete is incident to employment and narrowly tailored to protect trade secrets. | Terminated employee and broad scope weigh against enforcement; consideration and scope are improper. | Non-compete unenforceable; weighing factors favor employee. |
| Whether tortious interference with contractual relations is likely | Sensient's employment of Lewis facilitates breach of Colorcon’s contract. | No demonstrable intent to induce breach; no breach occurred. | Unlikely; no evidence of intentional interference. |
| Whether PUTSA trade-secret misappropriation is likely | Lewis’s access to and use of Colorcon’s trade secrets could occur at Sensient. | Limited exposure to trade secrets; Sensient has attempted to segregate Lewis from confidential material; no evidence of misappropriation. | Not likely; no imminent disclosure or misappropriation. |
| Whether Colorcon will suffer irreparable harm warranting injunctive relief | Injunctive relief necessary to protect trade secrets and customer goodwill. | No imminent harm shown; legitimate competition and transition risks do not justify injunction. | Irreparable harm not demonstrated; injunction denied. |
Key Cases Cited
- Hess v. Gebhard & Co., 570 Pa. 148 (2002) (non-competes disfavored; balanced against employee’s livelihood)
- Brobston, Insulation Corp. of Am. v. Brobston, 667 A.2d 729 (Pa. Super. Ct. 1995) (termination for poor performance weighs against enforcement)
- Missett v. Hub Int'l. Pa., LLC, 6 A.3d 530 (Pa. Super. Ct. 2010) (factors balancing enforceability of non-competes)
- Bimbo Bakeries USA v. Botticella, 613 F.3d 102 (3d Cir. 2010) (misappropriation risk and degree of secrecy weighed)
- Continental Grp., Inc. v. Amoco Chems. Corp., 614 F.2d 351 (3d Cir. 1980) (irreparable harm standard in preliminary injunctions)
- Quaker Chem. Corp. v. Varga, 509 F. Supp. 2d 469 (E.D. Pa. 2007) (irreparable harm and trade secrets considerations in injunctions)