MEMORANDUM AND ORDER
AND NOW, this 14th day of September, 1995, upon consideration of plaintiffs Motion for a Preliminary Injunction and Defendant’s Motion for Partial Summary Judgment, and following a hearing, it is hereby ORDERED that plaintiffs Motion for Preliminary Injunction and defendant’s Motion for Partial Summary Judgment are DENIED.
Defendants Daniel Schafer and Robert Cerminara were both employees of Scott Foodservice Division (the “Divisiоn”). 1 After the assets of the Division were acquired by The Fonda Group, Inc. (“Fonda”) for $30 million, Schafer and Cerminara did not accept employment with Fonda and left Scott’s employ. Defendant Erving then hired Schafer and Cerminara for substantially identical positions. Erving directly competes with the Division. Fonda now seeks a preliminary injunction to enforce covenаnts not to compete which Schafer and Cerminara signed when they worked for Scott.
In order to obtain a preliminary injunction, the plaintiff must demonstrate (1) that there is a reasonаble probability of success on the merits, (2) that the plaintiff will be irreparably injured by the denial of the relief, (3) that granting the preliminary injunction will not cause even greater harm to the defendant, and (4) that granting the preliminary injunction is in the public interest.
ECRI v. McGraw-Hill, Inc.,
Whether the employment contracts at issue in this case are assignable is an open question in Pennsylvania. No Pennsylvania appellate court has ruled on the issue. At least one Pennsylvania trial court
2
has held that such personal service contracts without language expressly allowing assignments are not assignable.
See Armstead v. Miller,
52 Pa.D. & C.2d 584, 595 (Allegheny Co.1971). Courts in Vermont and Alabama have not allowed the assignment of restrictive covenants absent a showing of the parties’ intent to allow assignmеnt.
See Sisco & Jordan v. Empiregas, Inc.,
Other, distinguishable, cases support assignments of restrictive covenants.
Howe v. Anderson,
23 Pa.D. & C.3d 297, 301 (Adams Co.1982) (allowing assignment where corpo
*232
ration was owned and operated by the same individual who signed thе contract with the defendant);
Green’s Dairy Inc. v. Chilcoat,
89 Pa.D. & C. 351, 353 (York Co.1953) (assignment was ratified);
Jack Tratenberg, Inc. v. Komoroff,
87 Pa.D. & C. 1, 13 (Phila.Co.1951) (“Defendant’s knowledge of the incorporation of his former employer and his conduct in continuing in plaintiffs employ without objection therеafter constituted assent to the assignment to plaintiff of defendant’s employment contract.”).
3
New York and New Jersey courts have allowed the assignment of restrictive covenants.
A. Fink & Sons, Inc. v. Goldberg,
101 N.J.Eq. 644,
Moreover, the Asset Purchase Agreement (“APA”) is ambiguous as to whether the employment contracts at issue were assigned. There is a reasonable argument that the most specific reference to “employment ... agrеements” in the APA is Section 3.08(b) and thus if the parties intended to assign Schafer and Cerminara’s contracts, the contracts would have been listed, but the relevant Schedule 3.08(b) does not includе the two specific restrictive covenants at issue or any others. This interpretation is enhanced by the letter from plaintiff dated May 3,1995 urging Scott to enforce the restrictive covenants at issue. Def.Exh. 1; see also Def.Exh. 2, 3, 4, and 9. Scott believed it could enforce the restrictive covenants at issue after the closing. Nothing in the contracts at issue suggests that the parties intended or expected the restrictive covenants to be assignable. On the other hand, there is also a reasonable argument that the two restrictive covenants were аssigned by the general language in Schedule 3.08 — “Uniform Employment Agreement with Scott Paper Company.”
In view of these two reasonable but conflicting interpretations of the agreements on the issue of whether the two restrictive covenants were, in fact, assigned, there is ambiguity which would allow for the development of extrinsic evidence to determine the intеntions of the parties. 4 However, on the presently sketchy and relatively undeveloped record, I cannot find that plaintiff has met its burden of demonstrating a likelihood of success on the merits on that issue at this stage.
On balancing the relative harms, an injunction would put the two employees out of work. Indeed, even if the individual defendants are compensatеd monetarily, an injunction still requires that they be out of the work force in their field for almost two years, with a serious risk of difficulty in finding future employment. The two employees’ *233 harm from a preliminаry injunction far exceeds the harm to the plaintiff from denying preliminary relief. Plaintiff has not demonstrated irreparable injury on this record.
I am not confident that the public interest favоrs the establishment of a market in bare restrictive covenants.
Moreover, on the present record, the plaintiff has not demonstrated irreparable harm regarding its alleged risk from disclosure of trade secrets or confidential information or any alleged breach of the contract provisions in this regard. The two employees took their manаgement and selling skills, not publicly unavailable technical data or valuable confidences, with them.
See Tyson Metal Prods., Inc. v. McCann, 376
Pa.Super. 461,
If the restrictive covenant claims should fall, there would not be a viable claim against Erving for interference with a сontractual relationship.
The Motion for Partial Summary Judgment is denied because there are genuine issues of material fact. The court will enter an appropriate оrder for orderly discovery to develop the factual issues in fuller detail than the present sketchy record.
Notes
. At the termination of their employments, Schafer was President of Scоtt Foodservice Division and Cerminara was the Marketing Manager.
. Judge Brosky, who authored the opinion, is now a Senior Superior Court Judge.
.
Boyce v. Smith-Edwards-Dunlap Co.,
. For example, when the employee defendants ceased to be employed by Scott, the separation agreements were between Scott, not Fonda, and the defendants. Thus, the intention of the parties with respect to these agreements needs to be developed more fully, particularly with respect to the alleged assumption of the liability for the differential payments.
Moreover, the "... Assumption Agreement" does not rеfer to the two employment agreements at issue, but rather generally incorporates liabilities and obligations of the Seller disclosed in Schedule 3.08 of the APA.
There is also an unrеsolved and not fully developed issue of waiver and plaintiff is entitled to discovery on that issue as it claims in its Reply Memorandum.
It is also unclear whether Schafer's agreement was entered into ancillary to his employment. See Exh. D^4.
Mr. Uleau's testimony was conclusoiy on the intent of the parties. Development of evidence in discovery about the nuts and bolts of the negotiations is necessary to determine the true intent.
. The Tyson court additionally suggests that
Some factors to be considered in determining whether given information is a trade secret are: (1) the extent to which thе information is known outside of the owner's business; (2) the extent to which it is know [sic] by employees and others involved in the owner's business; (3) the extent of measures taken by the owner to guard the seсrecy of the information; (4) the value of the information to the owner and to his competitor; (5) the amount of effort or money expended by the owner in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.
Id.,