422 Pa. 531 | Pa. | 1966
Opinion by
This is an appeal from a decree of the Court of Common Pleas of Lebanon County which dismissed exceptions and made absolute a decree nisi dated December 14, 1965, wherein Leon W. Becker (Becker) was enjoined until August 27, 1966, “from engaging in any way, directly or indirectly, in any business competitive” with Beneficial Finance Co. of Lebanon (Beneficial). The decree further enjoined Becker until August 27, 1968 “from disclosing to any person or business competitor the names of past, present and prospective borrowers of Beneficial Finance Co. of Lebanon. Nor shall he furnish any other person, company, or
Becker started to work for Beneficial Finance Co. of Easton, an affiliated corporation of Beneficial, in October 1953. On October 10, 1953, Becker signed a contract of employment with Beneficial Finance Co. of Easton which was accepted by Beneficial Management Corporation on October 19, 1953. After gaining considerable training and experience, Becker became manager of Beneficial’s office from March 4, 1959 until August 27, 1965, at which time he resigned from his position. Becker then commenced to work for Andrews Consumers Discount Co., a competitor of Beneficial, in Lebanon on September 1, 1965. Beneficial filed this suit in equity on September 22, 1965.
The terms of the decree of December 14, 1965, were based upon the restrictive covenant provisions of the employment contract: “10. That unless I [Becker] am specially instructed to disclose the facts, in which event I will comply strictly with the instructions, I will keep secret from every person the names of past, present, and prospective borrowers, security-holders, and all other business customers and associates of the Employer [Beneficial]; together with all knowledge which I may at any time acquire during my employment as to such subjects and as to any loans, earnings, finances, and all other concerns of the Employer.
“11. That I will not furnish to any other person or retain and use any papers or information whatever concerning any of the subjects and matters referred to in paragraph 10; that I will not engage or participate
“12. That all the terms of paragraphs 10 and 11 shall remain in full force and effect for three years after the termination of my employment for any reason; that during the whole of such period I will not make or permit to be made any public announcement or statement of any kind that I was formerly connected with the Employer.” (Emphasis added).
Since Becker left the employ of Beneficial on August 27, 1965, the decree nisi enjoined Becker from doing those things prohibited in paragraphs 10 and 11 until August 27, 1968, pursuant to the three year period provided for in paragraph 12.
In Pennsylvania where a contract of employment, which is ancillary to the taking of employment, contains reasonable
To support this contention, Becker points to testimony in the record that he did not sign the contract until October 10, 1953, two days after commencing work on October 8, 1953, and that the contract was not binding until nine days later when it was accepted by the Beneficial Management Corporation in Newark, New Jersey.
We believe that these facts fail to establish that the contract of employment was not ancillary to the taking of employment.
In the light of the foregoing conclusion, it is unnecessary to discuss Becker’s second contention.
Decree affirmed. Appellant to pay costs.
The lower court also decreed that Becker pay $2,000 as liquidated damages for breach of his employment contract with Beneficial.
The decree’s one year prohibition, until August 27, 1966, from engaging in any way with a business competitive with Beneficial was enforcing paragraph 13 and the $2,000 damages awarded were pursuant to paragraph 15 of the employment contract.
Reasonable means “reasonably limited as to duration of time and geographical extent.”: Albee Homes, Inc. v. Caddie Homes, Inc., supra, at 184. The test of reasonableness for restrictive covenants in a contract of employment which is ancillary to the taking of employment is more stringent than for restrictive covenants ancillary to a buy-sell agreement: Morgan’s Home Equipment Corp. v. Martucci, supra, at 631, 632. Here the time was limited to one year for working for a business competitor in the area of the City and County of Lebanon, Pennsylvania. The time was limited to three years for engaging in those activities prohibited by paragraphs 10 and 11 of the contract.
The contract itself states, inter alia: “In Consideration of my employment on the terms hereinafter stated, I hereby agree: ... 4. That the services to be rendered by me shall begin on the 10th day of October, 1953.....” However, Becker has offered admissible parol evidence to contradict the truth of this statement of fact as distinguished from a promise in the contract: Morgan’s Home Equipment Corp. v. Martucci, 390 Pa. at 629, 630, n. 13.
Black’s Law Dictionary (3d edition 1933) defines “ancillary” as “aiding; auxiliary; attendant upon; subordinate”.
The contract of employment in the case at bar could be ter minated by either party on five days’ written notice. Such a contract affords sufficient consideration “to support a restrictive agreement made by an employee”: Morgan’s Some Equipment Gorp. v. Martucci, 390 Pa. at 630 n. 14.