Appeal from decree of Court of Common Pleas, of Montgomery County, No. 72-12647, in case of Girard Investment Company v. Salvatore F. Bello and Bell Consumer Discount Company.
Otis W. Erisman, with him William L. Gaunt, Arthur L. Jenkins, Jr., Truscott and Erisman, and Smith, Aker, Grossman, Hollinger and Jenkins, for appellant.
Daniel L. Quinlan, for appellee.
Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Eagen. Mr. Chief Justice Jones concurs in the result. Dissenting Opinion by Mr. Justice Pomeroy.
In this action in equity, the chancellor entered an adjudication and decree nisi in favor of the defendants. Exceptions by the plaintiff were dismissed, and the decree nisi was made final. The plaintiff filed this appeal.
The factual background is as follows.
On April 9, 1962, the appellee, Bello, entered into a written contract of employment with the Girard Investment Company [Girard]. This employment contract contained a restrictive employment covenant which states: "13. That for a period of one year after the termination of my employment for any reason I
will not engage in any way, directly or indirectly, in any business competitive with the Employer's business, nor solicit or in any other way or manner work for or assist any competitive business, in any city or the environs or trade territory thereof in which I shall have been located or employed within one year prior to such termination."
On October 6, 1972, Bello terminated his employment with Girard, and on the next day established his own concern, Bell Consumer Discount Company [Bell], with himself president thereof. Bello had been continuously employed from the middle of August 1965 until his cessation of employment, with one brief temporary assignment elsewhere, as branch manager of the Logan Square-Norristown office of Girard.
On November 16, 1972, Girard brought this action in equity to enjoin Bello from continuing his employment in the consumer discount business in Logan Square's "trade territory" and to enjoin Bell from employing Bello in their business. A preliminary injunction hearing followed on December 5, 1972, and the requested preliminary injunction was denied on December 15, 1972. A final hearing was held on January 30, 1973, and on May 29, 1973, the chancellor filed his adjudication and decree nisi. Girard filed exceptions to the chancellor's adjudication, which were heard by the court en banc and eventually dismissed on August 28, 1973.
The chancellor held "that the general covenant not to compete contained in paragraph 13 of the employment contract is not reasonably necessary for the protection of Girard and constitutes an undue hardship on the Defendants ...