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TRILOG ASSOCIATES v. FAMULARO ET AL. (01/24/74)

decided: January 24, 1974.

TRILOG ASSOCIATES, INC.
v.
FAMULARO ET AL., APPELLANTS



Appeal from decree of Court of Common Pleas, Trial Division, of Philadelphia, Sept. T., 1970, No. 2062, in case of Trilog Associates, Inc. v. John D. Famularo, Louis A. Marabella, and Dennis J. Gawrys.

COUNSEL

C. Clark Hodgson, Jr., with him Stradley, Ronon, Stevens & Young, for appellants.

A. H. Wilcox, for appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Manderino. Mr. Chief Justice Jones, Mr. Justice O'Brien, Mr. Justice Roberts, Mr. Justice Pomeroy and Mr. Justice Nix concur in the result. Concurring Opinion by Mr. Justice Eagen.

Author: Manderino

[ 455 Pa. Page 245]

This is an appeal from a decree which permanently enjoined the appellants from engaging in various conduct allegedly in violation of their employment contracts with their former employer, the appellee. The appellants, John D. Famularo, Louis A. Marabella, and Dennis J. Gawrys, were employed in 1967 by the appellee, Trilog Associates, Inc., a corporation engaged in the data processing business. In November of 1969, Gawrys was fired. In April of 1970, Famularo and Marabella simultaneously resigned their employment with Trilog and established their own data processing business under the name of General Data Systems, Ltd. Famularo and Marabella were the principal stockholders and officers of the new business. In June of 1970, Gawrys, who had been fired by Trilog seven months earlier, was hired by General Data Systems, Ltd.

During the time that the appellants worked for Trilog, the Girard Trust Bank of Philadelphia was one of Trilog's clients for whom data processing services were performed involving shareholders' records. Famularo, as an employee of Trilog, worked on the Girard Bank project. Marabella did so to a lesser extent. Gawrys did not work on any matters relating to Girard Bank.

In September of 1970, General Data Systems, Ltd., entered into an agreement with the Girard Bank for certain data processing involving trustees' records. Shortly thereafter, Trilog filed this action claiming

[ 455 Pa. Page 246]

    the appellants were violating restrictions in their employment contracts with Trilog. Injunctive relief was granted.

Essentially the injunction enjoined the appellants from: (1) performing computer related services for the Girard Bank or any other customer of Trilog; (2) disclosing or using any confidential information as to Trilog; (3) inducing present employees of Trilog from terminating their employment; (4) inducing former employees of Trilog to break their restrictive employment covenants; (5) inducing any customer of Trilog to violate its contract with Trilog; (6) interfering with Trilog's business relations; (7) keeping any copies of documents generated within Trilog whether authored by appellants or not and whether obtained as a result of their lawsuit or not. In addition, Famularo was enjoined from developing or exploiting a shareholders' record system.

The findings of fact in the trial court's opinion are basically as follows:

"While in Trilog's employ . . . Famularo and Marabella had constant contact with those officers of the bank who operated the Corporate Trust Department and became familiar with the operation thereof although they did not at that time work specifically on the trustees' record system. However, not only were the two systems in the same department of the bank and under the administration of its one set of managing officers but they used the same computer and the same cage where both corporate shares and debt securities were kept. And there were instances and circumstances where the functions of the two systems overlapped.

"[W]hile working for Trilog at Girard Trust Bank . . . Famularo and Marabella actually obtained information for Trilog concerning its customer which . . .

[ 455 Pa. Page 247]

    they used . . . as the owners of General Data Systems, Ltd. . . . .

"[T]he employee acquired the opportunity to compete with his former employer on the same premises and with the same management . . . by virtue of the information concerning that customer's needs and methods which he had accumulated while working for his former employer.

". . . Famularo . . . sought to oust Trilog. . . as the contractor engaged in computerizing and servicing the data processing of Girard's shareholders' record system by proposing, or at least suggesting, a revision in procedures and computer uses. . . . Famularo . . . produced a plan envisioning the reorganization of the Corporate Trust Department.

"While Trilog had not been employed by Girard to perform services for other than that branch of the activities of its Corporate Trust Department known as the shareholders' records system it was actually having contact with the problems of the closely related trustees' records system. Thereby its employees Famularo and Marabella came to know of the existence of that system and its relationship in part with the other system, combined as the two were in the same department under the same management and using the same computer and the same securities cage. The shareholders' records system was staffed by far more employees than the trustees' record system . . . and the physical equipment of the latter, aside from the computer, was smaller and the space occupied by it was less than that of the shareholders' record system. . . . [W]hile the knowledge of . . . Famularo and ...


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