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FRASER SWEATMAN, INC. v. SCHREIBER

September 30, 1968

FRASER SWEATMAN, INC., a New York corporation
v.
Peter SCHREIBER, a citizen or a subject of the foreign state of West Germany



The opinion of the court was delivered by: KRAFT

 We do not share the plaintiff's certainty in this regard. Plaintiff still has the burden of proving that such a negative covenant arises by necessary implication from a consideration of the language of the entire contract in light of the surrounding circumstances or from other manifestations of intention. *fn2"

 Plaintiff, since 1953, has been engaged in the design, manufacture and distribution of anesthesia apparatus and related equipment throughout the United States. Its yearly net sales are approximately $1,000,000.

 Sometime in 1965, plaintiff became aware of defendant's skill and talent as a design engineer. At that time defendant was employed as a design engineer by Dragerwerk in Lubeck, West Germany. He had been so employed in the design of anesthetic equipment for about ten years and had written a book (then unpublished *fn3" ), which described from an engineer's viewpoint the various design principles involved in the designing of anesthetic equipment. *fn4"

 Defendant holds no university or college degrees in engineering or mathematics, but he is a tool maker and holds certificates from several engineering schools in Germany.

 At the end of 1965 plaintiff, through its president, Fraser Sweatman, offered defendant a position with the plaintiff corporation in the United States. Plaintiff arranged, at its expense, for defendant and his wife to visit the United States before he made his decision. After further negotiations defendant and plaintiff agreed upon the terms of an employment contract *fn5" which were reduced to writing. (Ex. P-1)

 Defendant's contract with Dragerwerk required him to give six-months notice of termination and contained a two-year non-competitive clause. *fn6" Fraser Sweatman and defendant successfully negotiated plaintiff's release from these restrictive provisions and defendant signed his five-year contract with plaintiff on June 30, 1966. Defendant began his employment thereunder on July 1, 1966 and continued until April 26, 1968, when he submitted his resignation effective April 30, 1968.

 In consideration and as part of the contract, plaintiff paid the defendant's moving expenses from Germany and assisted defendant in obtaining an immigration visa to the United States. It also aided him in securing medical treatment for his wife, as well as in the necessary financing for a residence in Doylestown, Pennsylvania.

  In his position with plaintiff, Schreiber served as design engineer and production manager. He was responsible for designing, prototyping, *fn7" field testing, developing and modifying various anesthesia devices manufactured and/or sold by the plaintiff. Defendant also attended many medical meetings and conventions, where he was introduced to plaintiff's customers. He obtained a knowledge of plaintiff's suppliers and methods of manufacturing. He exhibited an ability to initiate and manage four or five design projects concurrently.

 In the course of his employment, defendant became dissatisfied with the working and sanitary conditions in plaintiff's plant. He became concerned, too, about safety problems involved in the design of the equipment manufactured and sold by plaintiff. He made these known to plaintiff, who did not remedy them to defendant's satisfaction.

 In November and December 1967, in the course of several discussions, Sweatman advised defendant that he intended to sell the production of anesthesia equipment to another company. This information disturbed defendant, because he is primarily a designer of anesthesia devices.

 In November 1967, defendant informed Sweatman that he had received an offer from Drager in Germany which he did not then take seriously. However, as conditions in the plaintiff's plant failed to improve, defendant made known to plaintiff's general manager that he intended seriously to consider the offer from Drager.

 On March 31, 1968, at a meeting in Schreiber's home in Hatfield, defendant informed Sweatman of the possibility of his employment with Drager in the deep sea diving field, and that he would also represent the Drager Medical line in competition with plaintiff in some limited aspects of the anesthesia device market in the United States. Sweatman expressed a willingness to release Schreiber from his contract, provided he would aid in the training of a replacement. On or about April 17, 1968, with the knowledge and permission of Sweatman, defendant went to West Germany to discuss the aforesaid offer with Drager.

 Following his return to the United States, defendant consulted an attorney and then prepared and forwarded a letter of resignation, *fn8" dated April 26, 1968, to Sweatman. In this letter defendant referred to the Drager offer and offered to make himself available to Sweatman on a consultant basis and to assist in the training of a replacement. He further stated that his decision was "irrevocable" and "effective April 30, 1968."

 "F

 S FRASER SWEATMAN (CANADA) ...


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