Thereafter, defendant called Sweatman twice without success, and finally requested Mr. Rogers, the sales manager of plaintiff, to ask Sweatman to contact him regarding the completion of the design projects.
Defendant, along with a Mr. Landes and Mr. Boerner (also former employees of plaintiff) on May 16, 1968, formed a new company, NAD, Inc. (North American Draeger). Schreiber is president, Boerner, vice president, and Landes, secretary-treasurer. The three are the sole directors of the company.
The new company manufactures rough parts for the anesthesia machines such as the stand and casting. Drager of West Germany supplies the remaining high quality parts. NAD, Inc. is now engaged in manufacturing and selling small veterinary animal anesthesia machines, and acts, as well, as a distributor for the whole medical line of Drager equipment. An exclusive distributorship was given by Drager to NAD, Inc. for some minor products and for the production of deep sea diving and ocean research equipment in the United States.
Shortly after its incorporation, NAD, Inc. produced and displayed large and small animal anesthesia machines at the American Veterinary Meeting held in Boston during the week of July 23, 1968.
Drager of West Germany has an agreement with NAD, Inc. by which Drager has the right, to be exercised within six years, to buy more than 51 percent of the stock of the new company. Drager also advanced funds as a personal loan to defendant to purchase machinery for the new enterprise.
Plaintiff claims that it will suffer irreparable harm, because it will be deprived of the ownership of designs, inventions, improvements and letters patent which defendant, by reason of his unique and unusual services, would have designed, invented or discovered during the remainder of his contract and that defendant will compete with the plaintiff by exercising such unique services for the benefit of NAD, Inc.
Since the instant contract is devoid of an express covenant not to compete, the plaintiff seeks to imply such a covenant by relying upon the language of paragraph 10 of the contract which states: "During your employment you shall devote your full time and skill for the benefit of our company * * *".
We are constrained to find that such a provision merely requires what is normally expected in any employment relation, namely, that an employee, while so employed, will perform his assigned tasks to the best of his ability and for the benefit of his employer. A clause of this type does not, per se, preclude or restrict an employee, who terminates that relationship, from engaging in competition with his employer thereafter.
Implied covenants are not favored in the law. 17A C.J.S. Contracts § 328, B. Implied Terms. "Courts are even less disposed to sustain an agreement which forms part of a contract of employment to refrain from subsequently engaging in a competitive occupation than where a similar agreement is attached to a bill of sale. 5 Williston, Contracts § 1643, pp. 4606-4607 (Rev. Ed. 1937). Where there is no restrictive provision at all, we will not imply one." Denawetz v. Milch, 407 Pa. 115, 121, 178 A.2d 701, 704 (1962).
Before defendant was hired by the plaintiff he was bound by an express negative covenant not to compete with Drager for two years. This restriction was avoided by successful negotiation by Sweatman and defendant with Drager. After termination of the Drager contract, Sweatman, though fully aware of it restrictive provisions, saw fit to omit any restrictive covenant from the contract which he drafted. This fact, we think, militates strongly against an implication of a covenant not to compete. Surely, had Sweatman freely assented to the termination by defendant, plaintiff could not now contend that the contract as written precluded competition by defendant thereafter.
In this regard, the meetings and letters exchanged between defendant and Sweatman concerning defendant's resignation persuade us to find that Sweatman did, in fact, acquiesce in the termination of defendant's contract with plaintiff.
Finally, we find that defendant's services were not so unique and extraordinary as to be irreplaceable. The ease with which plaintiff recruited a replacement, who had a comparable, although not as brilliant, ten year background in the same field, impels us to doubt the severity which plaintiff now attributes to loss of defendant's services.
In any event "[it] has been well stated that upon an application for a preliminary injunction to doubt is to deny." Madison Square Garden Corp. v. Braddock, 90 F.2d 924, 927 (3 Cir. 1937).
This opinion embodies the Court's findings of fact and conclusions of law, in accordance with F.R.Civ.P. 52(a).
Now, this 30 day of Sept., 1968, it is ordered that the motion of Fraser Sweatman, Inc. for a preliminary injunction be, and it is, denied.