*1 ASSOCIATES, INC., Appellant, FOX-MORRIS Robert et al. CONROY Pennsylvania. Supreme Court Argued Nov. 1974. Decided March 1975. *2 Seymour Kurland, Philadelphia, Strogatz, Ian A. L. appellant. for
Edward Conroy, Ballard, Spahr, Gerard Andrews & Ingersoll, Philadelphia, Lamb, Lamb, William H. Windle McErlane, Chester, appellees. & West for ROBERTS, JONES, J., O’BRIEN,
Before C. and POMEROY, NIX MANDERINO, and JJ.
OPINION OF THE COURT O’BRIEN, Justice. appeal
This preliminary in- arises from the denial junction sought which was a restrictive cove- enforce employee nant in certain contracts.
The surrounding appeal facts this as In are follows. appellees Joseph Mulqueen, H. and Robert Con- Jr. roy employed by became appellant, Fox-Morris Asso- ciates, Inc., which place- was in the business executive ment. Pursuant employment, Conroy to their and Mul- queen signed employment contracts which contained following restrictive covenant: parties
“. . . agree that the services Employee unique extraordinary are and and that Company given Employee has confidential access to and valuable information a result of which the use as by Employee lists, trade secrets customer and/or
applications irrepara- correspondence, would cause damage agree ble Employee does Company. during employment peri- his term of and for eighteen (18) od of months thereafter he will not dis- Company close, anyone use or furnish to other than any trade secrets or other confidential information concerning Company during period nor such he, directly agent, indirectly, principal, or as stockhold- er, representative, counselor, manager, employee, or any engage capacity whatever, other in the or same any Company within a one similar to that of business any Company city in has hundred mile radius of which an office. established
“Employee acknowledges that the restrictions above placed upon necessary reasonable and him *3 proper protection Company’s in of and business operative, the such restrictions become he be event purposes engage of in businesses for the able to other earning a livelihood.” Conroy Mulqueen renewed 1973,
From 1970 to and employment their contract contained contracts and each quoted. previously covenant as the identical restrictive 1974, Mulqueen, cover- Conroy In and while still June gave by employment their contract, notice of ed the 1973 Conroy resign positions. Thereafter, their intention Mulqueen employment of Robert entered the K. and by em- Inc., corporation Brian, a formed another former ployee engaged in executive appellant, the same and appellant a com- placement July filed field. On employ- seeking the plaint equity to enforce restrictive in Mulqueen against appellees Conroy and ment covenants took Brian, The against Inc. chancellor K. Robert and preliminary injunction on testimony and denied for enforce- too broad grounds that the covenant was appel- thus ment, making subject modification, it preliminary injunction not clear. right to was lant’s appeal This followed. point this case
Initially, out that since we must injunction, our from the denial of arises reason there were scope is limited to whether of review below, court and we grounds for the action of the able upon pass rea merits of the or will not case consider plain against action, it that no or such unless is sons for grounds of law relied on such or that the rules existed clearly inapplicable. palpably wrong Albee or See Homes, Homes, Inc. Inc., v. Caddie Examining in the record and the chancellor’s decision light above, chancellor we are convinced that the correct result. reached appel in covenant the instant case restricted competitive engaging
lees from in a within business only places one-hundred-mile radius not of em of their ployment Philadelphia, but also within a one-hun any place appellant radius of of dred-mile had circumstances, fices. Under these the enforcement of implications the restrictive covenant and its are not sus ceptible preliminary injunction. to the drastic action of a Appellant
Decree affirmed. to bear costs. EAGEN, J., part took no in the or consideration deci- sion this case.
ROBERTS, J,, concurring opinion. filed a ROBERTS, (concurring). Justice chancellor based his denial of the in- junction grounds. on two alternate He concluded that covenant, as written, broad, too was so that it could not be enforced without From severance. this he rea- appellant’s right soned that to clear, relief was not as is required preliminary injunction. for issuance of a See Corp. Pennsylvania Alabama Binder & Chemical v. In- 294 Corp.,
dustrial A.2d 180 Chemical 189 appellant He that had failed also concluded irreparable that the denial show harm from would result injunction. Solely of the that there because I believe “apparently Alli grounds,” were reasonable see Credit Corp. Corp., Philadelphia ance Minit-Man Car Wash (1973), 370-71, Pa. conclusion, latter in I concur the result.
I There was could evidence from which the chancellor conducting appellees their busi- have concluded that were exploit re- any customer ness a manner did not which lationships any developed in.appellant’s employ or while might belonging appellant have trade secrets which operated, been known to If so them. their business was cogni- appellant legally apparently any would not suffer Consequent- (much irreparable harm). zable harm less ly, prelimi- properly the chancellor that a could conclude unj nary jin unction would be ustif ied.
Appellant present operation that the contends mode of appellees’ designed solely issuance business is to avoid injunction ter- of an will not be after the continued pre- litigation. Appellant mination of this confuses liminary injunction permanent injunction. A with a preliminary injunction pen- operates only during the dency injunc- litigation of the over issuance a final tion, precisely period appellant in which concedes appellees prac- probably present that maintain their Thus, preliminary injunction may tices. be denied though permanent injunction may even later be found proper appellant’s if the fears are chancellor finds sufficiently justified.
II agree, however, majority’s approval I cannot with necessity conclusion that mere for severance
295
to
rea-
to limit its enforcement
covenant
order
right
appellant’s
to relief unclear.
sonable area rendered
employee
permits equitable
enforcement
Our law
reasonably
compete only
neces
not
far as
covenants
so
Bettinger
sary
protection
employer.
v.
for the
of the
100,
296
Associates, Inc.,
Carl Berke
A.2d
455 Pa.
314
(1974); Reading
Berolet,
Pa.
Aviation
Co. v.
454
Service
488,
(1973). However,
the covenant
311 A.2d
628
imposes
necessary
protect
than
restrictions broader
employer,
eq
repeatedly
we have
held that a court of
uity may grant
portions of
enforcement
limited to those
reasonably necessary
the restrictions which
for the
protection
employer.
of the
Jacobson & Co. v. Interna
tional
Corp.,
439,
Environment
A.2d
427
612
Pa.
235
(1967)
(unanimous); Barb-Lee Mobile Frame Co. v.
Hoot,
222,
(1965)
(unanimous);
416 Pa.
Because it is clear that may a restrictive covenant be partially enforced imposes when it restraints broader necessary than protection employer, it was *6 error to conclude severance, for mere need standing alone, appellant’s right rendered to relief un- precise clear. scope proper Where enforcement remains hearing uncertain after a request on for a may injunction, the trial properly lim- court it scope of its decree those areas enforce- clearly proper, may ment would be deny but it not relief entirely clearly if the covenant is otherwise enforceable. Pennsylvania
COMMONWEALTH IRWIN, Appellant. Albert M.
Supreme Pennsylvania. Court of
Argued Oct. 1974. Decided March 1975.