HEALTHCARE SERVICES GROUP, INC. v. FAY, 2:13-cv-00066

Healthcare sues Fay, Konopka, and Senova for breach of restrictive covenants, misappropriation of trade secrets, and tortious interference; Fay and Konopka left Healthcare to join Senova and allegedly breached covenants not to compete or solicit; covenants restrict competition within two years and across the continental United States; Fay and Konopka admitted leaving and joining Senova and attending client meetings; Healthcare seeks preliminary injunction narrowing geographic scope to NY and CT and enjoining continued employment with competitors.
Defendants Fay and Konopka agreed to a limited injunction restricting use of confidential information and direct contact with known Healthcare clients through June 16, 2014, but oppose broader injunction preventing employment with Senova or any competitor.
The court conducted an evidentiary hearing on Healthcare's request for preliminary relief and analyzed enforceability of covenants, likelihood of irreparable harm, and balance of harms under Third Circuit standards.
Healthcare argues the covenants are enforceable, protect legitimate interests, and that irreparable harm arises from interference with customer relationships and created goodwill.
Fay and Konopka argue Advanced Fox Antenna is controlling and that a full ban on employment is excessive; they contend there is no proof of irreparable harm beyond anticipated damages.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether covenants not to compete were enforceable and properly limited	Healthcare contends covenants are valid and necessary to protect goodwill	Fay/Konopka argue covenants are too broad and overbroad	Cov-2-year duration reasonable; geographic scope bluelined to NY/CT; covenants enforceable
Whether there is irreparable harm justifying a preliminary injunction	Interference with customer relationships causes irreparable harm	Harm could be compensated with damages; no unique confidential info proved	Irreparable harm established due to anticipated disruption of customer relationships
Whether a preliminary injunction altering employment status is appropriate	Injunction needed to prevent ongoing violation	Full employment ban unnecessary and onerous	Injunction limited to enjoining competition in NY/CT; employment with Senova allowed otherwise
Whether public and equitable considerations support the injunction	Enforcing contract obligations serves public policy	Public interest not harmed if balance favors defendants	Public interest favors enforcement of covenants to guard contractual obligations

John G. Bryant Co. v. Sling Testing & Repair, Inc., 369 A.2d 1164 (Pa. 1977) (irreparable harm from interference with customer relationships supports equity)
Hess v. Gebhard & Co., Inc., 808 A.2d 912 (Pa. 2002) (restrictive covenants must be reasonably necessary and limited in duration/geography)