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HAYES v. ALTMAN (01/20/67)

decided: January 20, 1967.

HAYES, APPELLANT,
v.
ALTMAN



Appeal from decree of Court of Common Pleas of Allegheny County, July T., 1964, No. 442, in case of Thomas A. Hayes v. Theodore L. Altman.

COUNSEL

Clyde E. Donaldson, for appellant.

Silvestri Silvestri, for appellee.

Bell, C. J., Musmanno, Jones, Eagen and O'Brien, JJ. Opinion by Mr. Justice O'Brien. Mr. Justice Musmanno dissents.

Author: O'brien

[ 424 Pa. Page 24]

Appellee, Dr. Theodore L. Altman, a duly licensed Optometrist in this Commonwealth, negotiated a 5-year employment contract with appellant, Dr. Thomas A.

[ 424 Pa. Page 25]

Hayes. The agreement, inter alia, provided a starting salary 36% higher than that which appellee was receiving from the firm he left; uniform yearly increases of $520; health and accident insurance coverage; an option to purchase his employer's practice, and a restrictive covenant which reads as follows: "During the term of this agreement, employee shall devote his best efforts and his entire time to advance the interests of employer, and he shall not directly or indirectly, alone or as a member of a partnership, or as an officer, director, stockholder, or employee of any other corporation, or employee of any other individual, be engaged in or concerned with any work or services pertaining to the practice of optometry. Following the termination of the term of this contract of employment, for any cause whatsoever, employee shall not, directly or indirectly, alone or as a member of a partnership, or as an officer, director, stockholder, or employee of any other corporation, or employee of any other individual, be engaged in the practice of optometry in the Borough of Monroeville or elsewhere within a radius of six air miles of the office of employer herein, with the exception of that district of Pittsburgh lying north of the Allegheny River, and all Boroughs and Townships lying north of said Allegheny River, and with the further exception of Mt. Lebanon, Dormont, and Brentwood, Allegheny County, for a period of three (3) years from said termination of the term of this contract of employment. Provided, however, that such restriction on practice of optometry in Monroeville and elsewhere within a radius of six (6) air miles shall not apply to employee in the event employer, during his lifetime, shall discharge employee without cause."

At the expiration of the agreement on December 31, 1963, Dr. Altman continued to work for Dr. Hayes. However, the parties were unable to negotiate a new contract of employment. On March 13, 1964, a working

[ 424 Pa. Page 26]

    day, Dr. Hayes discharged Dr. Altman, as Dr. Altman had not signed another agreement. There is no dispute as to Dr. Altman's work having been completely satisfactory.

Following his discharge, Dr. Altman, in April of 1964, opened an office for the practice of Optometry in Monroeville, Pennsylvania, 6.3 air miles from the office of the appellant. The chancellor found, in finding of fact No. 15: "Defendant advertised the opening of his office in public newspapers circulated throughout the Borough of Monroeville, Swissvale, and surrounding municipalities. Defendant also sent postal card announcements of the office opening to a number of persons, some of which were or had been patients of the plaintiff." The findings of fact of the chancellor were not excepted to by appellee, Dr. Altman.

The chancellor, in his discussion, set forth the basic issue for determination: ". . . whether the restrictive covenant contained in the employment contract dated January 1, 1959, is valid and enforceable under the factual circumstances of this case." The chancellor then went on to find in his conclusions of law No. 2: "The general covenant not to compete within a certain area for a certain time period was not reasonably necessary for the protection of plaintiff employer and constitutes an undue hardship upon defendant and is, therefore, not enforceable in the factual ...


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