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AMERICAN EUTECTIC WELDING ALLOYS SALES CO. v. FLYNN (06/03/60)

June 3, 1960

AMERICAN EUTECTIC WELDING ALLOYS SALES CO., INC.
v.
FLYNN, APPELLANT.



Appeal, No. 257, Jan. T., 1960, from order of Court of Common Pleas No. 3 of Philadelphia County, March T., 1960, No. 282, in case of American Eutectic Welding Alloys Sales Co., Inc. v. Charles Flynn. Order affirmed.

COUNSEL

Earl Jay Gratz, for appellant.

Franklin Poul, with him Wolf, Block, Schorr and Solis-Cohen, for appellee.

Before Jones, C.j., Bell, Jones, Cohen, Bok and Eagen, JJ.

Author: Jones

[ 399 Pa. Page 618]

OPINION BY MR. CHIEF JUSTICE JONES.

This appeal is from a decree granting a preliminary injunction to the plaintiff company for the purpose of preserving the status quo between it and the defendant, its former employee, pending determination of the defendant's alleged breach of a restrictive covenant in the written contract of employment entered into by the parties on or about March 20, 1959. The covenant in question was an engagement on the part of the defendant not to disclose confidential information, gained in his employment by the plaintiff, during or after such employment and not to compete with the plaintiff, after the termination of his employment, in the same territory to which he had been assigned by the plaintiff or within a radius of 100 miles thereof for a period of two years following the termination of his employment. The defendant employee tendered a letter of resignation to the plaintiff on February 3, 1960, to become effective two days prior to its date. Immediately, thereupon, he entered into the employ of a corporate competitor of the plaintiff company and at once went forth in the interest of his new employer to call on the trade and solicit customers for the sale of the same type of products as was handled by the plaintiff and in the same territory in which he had formerly represented the plaintiff.

As the chancellor viewed the plaintiff's undisputed averments and proofs, "The circumstances of the termination of defendant's employment with plaintiff [did] not reflect credit on the defendant or his new employer." Without detailing the intervening sequence of events

[ 399 Pa. Page 619]

    transpiring between the defendant and the national sales manager of his employer-to-be (the plaintiff's corporate competitor), it suffices to say that the chancellor was well justified in his observation that "One would have to be quite naive to avoid concluding that these events were not the culmination of a plan which had in it elements of economic piracy."

The defendant offered no evidence to controvert the plaintiff's case but confined himself to arguing that the court was without jurisdiction to pass upon the plaintiff's complaint since the written contract of employment contained a clause which provided that "Any controversy or claim arising out of or relating to this agreement, or breach thereof, shall be settled by arbitration in the Borough of Manhattan, City, County and State of New York, by and in accordance with the Rules of the American Arbitration Association. Judgment on the award rendered by the Arbitrator(s) may be entered in the Supreme Court of the State of New York, County of New York, or in any court having jurisdiction thereof." The contract also contained the further provision that "This agreement shall be deemed to be made under and shall be governed by the laws of the State of New York in all respects, including matters of construction, validity and performance."

As the court en banc apprehended, the preliminary objections, which the defendant filed to the complaint, rested entirely on the proposition that, since the parties have in their contract agreed to submit any dispute to arbitration and have agreed to be bound by New York law, the plaintiff company was precluded from obtaining the equitable relief which it sought locally. The court below expressed its difference with the defendant in respect of the fundamental ...


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