*1 310 alone, must on surmise we reverse a criminal conviction
base charge of on the of conspiring sentence judgment appellant’s v. See Commonwealth Bau criminal mischief. to commit Navarro, v. sewine, supra. Commonwealth supra; conviction on the appellant’s We have reversed mischief, to commit criminal but have of charge conspiring At sentencing convictions. the hearing all other affirmed on bar, at court entered sentences each case lower took effect upon completion conviction which particular short, different crime. the lower cоurt of a of sentence on sentencing; its sentence one integrated apparently to and influenced sentence probably linked charge circumstances, these we must Under charge. on another the valid convictions without resentencing on remand conviction. See Commonwealth invalid consideration Lockhart, A.2d 883 (1972). Judg Pa.Super. on commit criminal charge conspiracy ment of sentence judgments All other sentence vacated reversed. mischief for resentencing. and case remanded did WATKINS, Judge, participate President former case. consideration or decision INC., DYNAMICS, Appellant, PERIPHERAL Joseph and True Inc. HOLDSWORTH S. Pennsylvania. Superior Court Argued Dec. 1976. 13, 1978. April
Decided *2 Cantor, Norristown, Andrew B. with him Alan B. Ruben- stein, for Philadelphia, appellant. Hobson, III, A. King Prussia,
Abraham submitted a brief for appellee, Joseph S. Holdsworth. E. Appel,
Brian Philadelphia, True Inc. appellee, JACOBS, WATKINS, Judge, President Before der CERCONE, PRICE, VAN VOORT and HOFFMAN, SPAETH, JJ.
PER CURIAM: being divid- appeal equally six who heard this Judges affirmed.
ed, order is in J., opinion support affirmance SPAETH, files J., JACOBS, joins. P. HOFFMAN, J., concurring opinion. files J., VOORT, files an of rever- opinion support der VAN PRICE, JJ., join. sal in which CERCONE President did not WATKINS, Judge, participate former this case. or decision of the consideration *3 HOFFMAN, Judge, cоncurring: court refus- erroneously that the lower contends Appellant a restrictive enforcing grant injunction ed to a preliminary and its appellant employee, covenant between employment and, therefore, would affirm the lower disagree appellee.1 court. hearing were adduced at before following facts of Montgomery County pursuant of Pleas Common
Court injunction. a preliminary Appellant, for request appellant's located in (P.D.I.), corporation Inc. Peripheral Dynamics in of manu- designing, the business County, Montgomery selling computer peripheral equipmеnt, spe- facturing, and hun- readers, throughout Although the world. card cifically in types manufacture and deal other of companies dreds P.D.I. devices, is one of appellant computer peripheral card readers. peripheral that manufacture companies four 1975, November, Joseph until August, appellee, From sales as national or international Holdsworth, served H. Holdsworth, Joseph appellees S. two in case are 1. The Data, Inc., Peripheral employee appellant Inc. and True after appellant’s competitor for Holdsworth went to work which appellant. resigning employment with In manager. capacity, Holdsworth used his expertise in readers, marketing, card and engineering, travelled the world in an throughout effort to sell P.D.I’s card read- job ers. Holdsworth’s took him Specifically, throughout States, as well as to Europe United and Japan. May, 1974, Holdsworth resignation submitted his
P.D.I., June in effective order to accept a similar with competitors, Documation, one P.D.I.’s position Inc. However, prior the effective date his resignation, changed Holdsworth his mind and informed P.D.I. that he would continue as its P.D.I. employee. agreed to retain Holdsworth as an employee, provided sign that he an agree- he ment in which promised to refrain from working for P.D.I.’s Holdsworth competitors. agreed and a letter to P.D.I., dated June he stated that he was withdraw- ing his resignation desired continue his employment with P.D.I. The letter also contained the provi- following sions:
5. For a period ending year one after the end my PDI, with for any whatsoever, reason I shall not either directly or indirectly, proprietor, partner, stockholder, director, agent, principal, agent, employee, lender, consultant or become associated Documation, Inc., Data, Inc., True Oki Bridge Data Products, Inc., Sciences, Mohawk or Inc., Data person, other any firm corporation or other manufactures, entity sells or otherwise deals in computer peripheral card readers. of,
6. In furtherance without any way limiting the restriction paragraph above, period speci- *4 5, fied in I shall not paragraph or directly indirectly, (a) request of any customers PDI to curtail or cancel PDI; their with business
(b) solicit, canvas or or authorize accept, any person or solicit, to entity canvas or accept, from customers or potential PDI, customers of any business myself for or for thе companies specified in 5 or for paragraph other any person, firm, corporation or other entity manufac- tures, sells or otherwise in peripheral deals card readers. “potential customer” shall this paragraph, in
As used PDI has had some with which customers possible mean contact. business work letter, Holdsworth continued to signing
After 1975, when he November, gave company until for P.D.I. November, 1975, Holds- leaving. be that he would notice P.D.I., of competitor a work for True went to worth card readers. of True Data the sale involving a job 1976, filed a complaint equity, P.D.I. January On enjoin to Holdsworth injunction a preliminary requesting with True Data and his continuing contained agreement the terms comply otherwise 26,1976, 7,1974. January the Court June On the letter of a issued rule to Montgomery County Pleas of Common not be should injunction awhy preliminary cause show However, 10, 1976. hearing February for set issued and counsel in a brief discussion with 10,1976, after February on hearing to hold a denied chambers, the court refused appeal- P.D.I. preliminary injunction. for a request P.D.I.'s 10,1976, April pursuant order. On from this to our Court ed our Court vacated the among parties, a stipulation case the Court of and remanded the order lower court’s and directed a Montgomery County Common Pleas injunc- for a request preliminary on P.D.I.’s hearing prompt tion. May on hearings May court held
The lower case, appellant’s appellees At the close of 9, 1976. June in- preliminary request appellant’s to dismiss moved was in the nature of a the motion stating that junction, P.D.I. not met had its maintained Appellees demurrer. geo- covenant with a establishing a restrictive burden covenant, showing limitation and graphic P.D.I.’s inter- related written, protecting enforce- urged that the extensive Moreover, appellees est. on hardship appel- work a severe would sоught ment P.D.I. court granted June the lower On lee Holdsworth. denying prelimi- entered an order motion and appellees’ followed. This appeal nary injunction.
315 contends that the lower Appellant court erred in refusing grant injunction a to enforce preliminary the restrictive employment covenant because the court could have implied a reasonable limitation geographic despite the absence of an explicit geographic limitation. Majority finds that al- the restrictive covenant though could have been given limitation, appellant reasonable did not seеk such limited enforcement. Accordingly, Majority affirms the lower court’s denial of the preliminary injunc- tion. concur.
It is well established that
scope
review
appellate
decree
either
or
granting
denying a preliminary injunction
is limited to an examination of the record only to determine
whether there were any apparently reasonable grounds for
the lower court’s action.
In determining the correctness of
action,
the lower court’s
the appellate court considers the
facts
record before it on the date of the lower court’s
determination. Bryant v. Sling
Testing
Inc., 471
Reрair
1,
Pa.
1164 (1977);
A.2d
Sidco
Co.
Paper
Aaron,
v.
586,
Pa.
There *6 first, “. . . that it preliminary injunction: a issuance of and harm irreparable immediate prevent to necessary is second, that damages; compensated by could not be which it refusing by than by granting would result injury greater the to their it; third, parties it restores properly that the immediately prior alleged wrong- to as it existed status essential, however, is the . . Even more ful conduct to be restrained is activity sought the that determination is suit- injunction reasonably the issued actionable, and that plaintiff’s right And unless the is activity. ed abate such to manifest, wrong preliminary injunction a the clear and 7, 471 Pa. at Bryant, supra, be awarded.” not generally will Sidco, Homes, also, Inc., Albee supra; 1167. See 369 A.2d at supra. case, days after three hearings
In the instant
of both Holdsworth and
testimony
it heard the
during
grant
the lower court refused to
corporate president,
P.D.I.’s
its
the court based its
opinion,
injunction.
a preliminary
the grounds
relief on
the
grant equitable
refusal
the
reasonably designed
was not
abate
injunction sought
restrained,
compet
for P.D.I.’s
working
to be
activity sought
reasoned that
in order for a
correctly
court
itor. The
enforceable,
covenant to be
it must
employment
restrictive
extent,
in
time,
geographic
reasonable
be reasonable
employer
impos
without
necessary
protect
require
on the
These
hardship
employee.
an undue
ing
that our courts have
the well-established criteria
ments are
of restrictive
enforceability
evaluating
employ
used
Sidco, supra; Girard In
supra;
covenants. Bryant,
mеnt
220;
Bello,
(1974);
Pa.
Second, the lower court refused to properly imply geo- limitation in the graphic explicit absence of an limitation in the face of P.D.I.’s demand for total enforcement. The lower correctly court distinguished those cases which have implied geographic such limitations. Those cases have involved contracts which either defined the geographic scope the employer’s operations or specified the territorial area the employee’s activities. Selig- See Latz, man v. supra; Reeve, Plunkett Chеmical v. 513, 95 A.2d 925 Consequently, the courts could interpret those agreements as implying reasonable geo- graphic limitations in the restrictive covenants. In the case, however, instant the lower court found neither a specific limitation nor other language implying reasonable geographic short, limitation. In the lower court determined that the restrictive covenant could not be limited and would have an harmful inordinately on impact appellee Holdsworth.2 Consequently, the lower Dissenting Opinion 2. by rewrites the restrictive covenant limit- States, ing geographic scope Europe, its Japan, to the United places frequently. those to which Holdsworth travelled most Even apart hardship Holdsworth, from the undue this would work on there authority contradicting approach. is additional Reading such grounds refusing grant reasonable had court injunction.3 preliminary were reasonable apparently I that there
Because find of a preliminary the lower court’s denial grounds support the lower court. Accordingly, I would affirm injunction, concur. of affirmance:
SPAETH,
in
Judge,
support
in Judge
are
set forth
VAN der
fully
in this case
The facts
of reversal
and in Judge
opinion
support
VOORT’s
I, too,
of affirmance.
support
agree
opinion
HOFFMAN’s
affirmed, but for reasons somewhat
must be
that
case
VAN der
Judge
HOFFMAN’s.
Judge
different
limited,
covenant could be
the restrictive
that
says
VOORT
Judge
it. At 325.
to write limitations
into
proceeds
the covenant “could not be limited.”
that
says
HOFFMAN
Bertolet,
recognized
supra,
Supreme
our
Court
Aviation Services
consequences
rewriting
potentially
restrictive
courts
adverse
the
employment
to characterize them reasonable:
in order
covenants
encourage employ-
objection
practice is
it
to such
tends
“The
superior bargaining power
possessing
over
purchasers
ers and
upon
employees
to insist
unreasonable and
and vendors
of their
restrictions,
knowledge
promise may
in the
that the
secure
excessive
be
Services,
Reading
supra,
part,
upheld
if
full.”
Aviation
also, Sidco,
supra,
Pa. at
319 317. In covenant my opinion, limited, At could be but to limit it was discretion, whether within the lower court’s and the court’s decision not to limit it should not be dis- turbed.
1
agree
I
with
VAN der
Judge
VOORT that the
of a
scope
covenant not to
be
compete may
by
limited
a court to ensure
both that the duration and geographical
of a
scope
covenant
reasonable, and
are
that the covenant is neither unnecessary
for the
nor
emplоyer’s protection
unduly burdensome for the
follow,
It does
employee.
however that this court is the
impose
court to
such limitations.
opinion,
my
should
they
court,
imposed by
be
lower
after evidence and findings
of fact on such matters as the nature of the business in
and the
question
experience.
business
employee’s
That is
it was done
way
Bettinger
Assoc., Inc.,
v. Berke
(1976),
314 A.2d
Pa.
and Jacobson & Co. v. Int.
Environment Corp.,
Furthermore, if even thе record here were such as to make it appropriate covenant, for us to limit the we should so, not do for the issue propriety injunction moot. The covenant provided that a period ending “[f]or year one after the end of my [Holdsworth’s] PDI, ... . shall not . into [enter various types employment]”. Holdsworth left the employ of P.D.I. in November 1975.
Given the lower ability covenant, court’s to limit the the is question whether its refusal to do so was error. states, VAN der VOORT that true, Judge
It is
“[a]
an employee
and
which con
employer
between an
contract
the em
against competition by
covenants
tains restriсtive
his
is valid
will
employment,
termination of
after
ployee
the covenant
proves
unless the employee
sustained
be
or
illegal restraint
trade.
an unreasonable
constitutes
Vernillo,
Inc.
Pa.
Pittsburgh,
Latz of
Seligman
At 323. And see
&
(1955)”
Applying the motion “in the granted employee’s when it court erred at the close of the evi employer’s of a demurrer” nature has the burden of the employee proving the dence. Since unreasonable, the should not court have required covenant come forward with evidence? to have employee the question this it must be borne considering facie enforceable prima restrictive covenant mind a time, geographic reasonable in if it is reasonable only protect to the extent, necessary employer on the See hardship employee. undue imposing without no geo Here the covenant contained supra. cited cases was this, a facie case prima limitation. Because graphic burden did not shift the employee and the not' presented, the It the unreasonablеness of covenant. to demonstrate conclude, the court have proper, was therefore without requiring employ against employer decided forward with evidence. ee to come not, however, did of a limitation geographic The absence Judge out case—as making employer disable Rather, suggest. employer opinion may HOFFMAN’s open two courses of action it. had at least possible have to demonstrate First, attempted employer might case factual circumstances court that under the limitation not unreason- the absence of *10 able.1 For exаmple, could employer have attempted to that its were in in prove operations worldwide, fact and that during his had in fact employee traveled throughout the world. On such it proof be might found that facie, least, prima at the limitation was not unnecessarily broad, so that the burden would then shift to the employee so, it to show that even was unduly burdensome for him. It be that it was the may intention to employer’s proceed in so, however, this manner. If it succeed, did not for instead that the showing had employee traveled throughout the world, its evidence showed that he had only traveled in the States, United parts Europe and Japan. Alternatively, the employer might have requested only limited enforcement of covenant, demonstrating by evi- dence in support this request such enforcement would be reasonable in consideration of the necessities of its event, business. In too, such a prima facie case would have out, been made and the burden would shift to the employee limited, to show that even as the covenant was unduly Here, burdensome for however, him. the employer specifi- declined cally adopt such a action, course of instead requesting complete enforcement. As Judge HOFFMAN notes, the president of P.D.I. stated that the only two places that he would not seek enforcement of the covenant were Tibet and the North Pole.
Despite sweeping request, the court could have looked to all of the surrounding circumstances to judge the reasona- bleness of the covenant and could have granted partial enforcement. Sidco Paper Aaron, Company 465 Pa. (1976); Jacobson & v.Co. International Envi- ronment Corp., Plunkett supra; Chemical Reeve, Co. v. supra.
The man who wildly claims that he owns all the cherry trees in the cannot be country denied protection of the orchard in his back A yard. covenant, restrictive when it 1. The lower court reasoned opera- “. . Mr. Holdsworth’s worldwide; admittedly therefore, tions were the court could not possibly interpret able be a reasonable limitation.” Opinion sequitur. Lower Court at 4. This is a non of a court of will be held scrutiny equity,
comes under boundaries, and chronological reasonable geographical realities of the situation. Barb-Lee to the Mo according Hoot, 206 A.2d bile Frame Co. me, is that whether to grant protec- it seems to point, cherry as to some of the trees only discretionary. tion here, claims of all of the Where, employer protection him as to trees, give protection any. the court decline may *11 Bello, supra. Investment Co. Cf. Girard This of overbreadth militates en- gratuitous against sort it indicates intent to oppress forcement because an to foster a either of which is employee monopoly, and/or An who extracts a illegitimate purpose. employer an in furtherance of such a comes to the purpose covenant is, therefore, with unclean hands and equity court enforcement of the covenant. equitable entitled Sidcо Aaron, Pa. at supra, 465 A.2d Paper Company at 257.
Affirmed. JACOBS, joins opinion. President Judge, VOORT, support der reversal: Judge, VAN Inc. (P.D.I.) is in the Peripheral Dynamics, Appellant manufacturing selling computer business of devices readers. Appellee known as card peripheral Joseph S. employed by appellant August Holdsworth was 1975 as national sales While so manager. until November throughout States, traveled the United employed, appellee business for his Japan, soliciting Europe, employer. resigned a similar May appellee accept position however, a rival to the effectivе date company; prior with he his changed of the mind and resignation, requested P.D.I. continue to him. P.D.I. on condition employ agreed, (in the form of a letter appellee sign agreement P.D.I.) containing following provi- from Holdsworth to “For a one after the end of period ending year my sion: P.D.I., whatsoever, with reason I shall employment any or not either . . directly indirectly become associated Documation, Inc., Data, Inc., True with Oki Bridge Products, Inc., Inc., Mohawk Data Sciences or any person, firm, other or other manufactures, corporation entity sells or deals in computer periphеral otherwise card readers.” The sought also agreement prevent Holdsworth from solicit- P.D.I.’s customers for the ing benefit of any competing companies period for a one year following the cessation of Holdsworth’s P.D.I. Mr. Holdsworth signed the agreement and was permitted to remain an employee of P.D.I. November
On appellee Holdsworth voluntarily terminated his employment with P.D.I. and became an em- appellee True Inc. ployee P.D.I. filed a complaint to enjoin Holdsworth from equity continuing his employ- ment with True and to otherwise require Data Holdsworth with the comply terms of the employment agreement. were held on Hearings May 13 and 14 and June 1976,and a motion in the nature of a demurrer was granted, denying request injunction. for a preliminary was taken Appeal to our court from the order denying injunction, appellant *12 the lower court arguing erred finding that the restrictive covenant employment contained no geographical limitation and was not to the susceptible imposition of a limitation, reasonable geographical that the lower court in applying also erred an improper presumption unreason- ableness. This position appears be vаlid.
A contract between an
and an
employer
employee which
restrictive
against
contains
covenants
competition
the
by
after the termination of his
employee
employment, is valid
and will be sustained unless the employee proves that the
covenant constitutes an unreasonable or illegal restraint of
trade.
and Latz
Seligman
Inc.,
of Pittsburgh,
Vernillo,
161, 164, (1955).
382 Pa.
A.2d 672
In
words,
other
burden will be on the party asserting the
illegality
covenant to show how and
it is
why
unlawful. Harris
Marra,
464,
Calorific Co. v.
345 Pa.
(1942);
325 lists and informa- had access customer Holdsworth Joseph P.D.I., could be used P.D.I.’s by competi- about which tion itself by restraining attempted protect P.D.I. tors. for its and his working competitors using from Holdsworth information P.D.I. for a against period and knowledge reasonable, time was but other The period one year. agreement too broad. The between Holds- were restrictions that Holdsworth would not associ- specified and P.D.I. worth companies (including himself with four named True ate firm, other or other Data) person, corporation entity “or any manufactures, sells or otherwise deals in which computer would thus card readers.” covenant seem to peripheral working Holdsworth from for any capacity any restrict dealt in with any way computer peripheral company Furthermore, noted, as the lower court readers. card no The lower geographical limitations. agreement imposed “worldwide,” were operations noted that Holdsworth’s court geographical court therefore ruled that a reasonable and the the court. I conclude imposed by limitation could not be and, limited, be limited the covenant can be enforced. his for Mr. Holdsworth testified that work P.D.I. took him the United It Japan throughout States. Europe undue on Mr. Holdsworth to hardship enjoin would not be an for of one for the four working period year him from geographical named P.D.I. in the three areas in competitors Mr. Holdsworth did formerly operated. agree which he as a condition of his continued with writing, P.D.I., to take for a of one advantage period year obtained and contacts made him while em- by information part P.D.I.1 He should be held to this of the by ployed however, It would be unreasonable to restrain agreement. working Holdsworth from any company might Mr. card readers. peripheral deal in some would way that Mr. enforce the covenant to the extent Holdsworth Data, Inc., working should be for True enjoined in the complaint, the three other named in Eu- companies States, period and the United for a of one rope, Japan, year. Aaron, Paper Company 1. See Sidco Pa. n. A.2d *14 I would remand to the lower court in order that a prelimi- be nary injunction issued in accordance with this opinion. PRICE, JJ., CERCONE and join in this Opinion in Sup- port Reversal. Pennsylvania
COMMONWEALTH of THOMAS, Appellant. Robert Superior Court of Pennsylvania.
Argued Nov. 1977.
Decided April 1978.