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decided: September 22, 1975.


Appeal from order of Court of Common Pleas, Civil Division, of Allegheny County, Jan. T., 1972, Nos. 3673 and 3674, in case of Lawrence W. Gresh v. Potter McCune Company, a corporation.


Anthony J. Martin, with him Martin and Finnegan, for appellant.

Frederick J. Francis, with him William P. Getty, and Meyer, Unkovic & Scott, for appellee.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Hoffman, J.

Author: Hoffman

[ 235 Pa. Super. Page 539]

This appeal from the refusal of the court below to remove the entry of a compulsory non-suit raises the issue of the level of proof required to sustain an action for interference with contract pursuant to § 766 of the Restatement of Torts.

The essential facts are not in dispute. Appellant was employed by the appellee, Potter McCune Company, ("Company"), as an institutional salesman from March 4, 1968, until September 3, 1971, when appellant voluntarily terminated his employment. On September 15, 1971, appellant commenced employment with Pitt Foods Corporation, a competitor of the Company, as an institutional salesman. After being informed that appellant had contacted customers of the Company, the Company, on the advice of counsel, sent the following letter to Pitt Foods: "Potter-McCune Company intends to take all legal steps necessary to insure that Lawrence W. Gresh does not compete against Potter-McCune Company during the

[ 235 Pa. Super. Page 540]

    term of this agreement. We further will act to prevent Lawrence W. Gresh from disclosing or exploiting any trade secrets, including customer information, acquired during his employment with this company." The basis for the Company's action was the existence of a restrictive covenant in the employment contract entered into between appellant and the Company: "It is agreed that the employment of the Institutional Salesman gives him an opportunity to become acquainted with the customers of the Employer and as much as such advantage of acquaintance is a valuable trade secret of said Employer, it is further agreed that if the Institutional Salesman leaves the employment of, or his employment is terminated by Employer, then the Institutional Salesman agrees that he shall not become employed, or actively engaged in a similar business, directly or indirectly, either for himself or for another within the Employer's trading area for a period of one (1) year after leaving the employ of Employer or after his employment has been terminated by the Employer."

Because Pitt Foods did not wish to become involved in litigation with the Company, it chose to discharge appellant. Appellant then filed the instant action against the Company, seeking recovery for lost wages, embarrassment and severe mental anguish, injury to his business reputation, and punitive damages. The complaint alleged that the Company had intentionally interfered with appellant's employment relationship and that the Company's letter constituted actionable defamation. Following the presentation of appellant's evidence, the lower court granted the Company's motion for a compulsory non-suit.

Appellant's claim for intentional interference with a business relationship is based on § 766 of the Restatement of Torts: ". . . one who, without a privilege to do so, induces or otherwise purposely causes a third person not to (a) perform a contract with another, or (b) enter into

[ 235 Pa. Super. Page 541]

    or continue a business relation with another is liable to the other for the harm caused thereby." The crucial issue, therefore, is whether the Company was privileged to interfere with appellant's contractual relationship with Pitt Foods. Section 773 of the Restatement provides: "One is privileged purposely to cause another not to perform a contract, or enter into or continue a business relation, with a third person by in good faith asserting or threatening to protect properly a legally protected interest of his own which he believes may otherwise be impaired or destroyed by the performance of the contract or transaction." Comment a to § 773 states that the privilege is of narrow scope and protects the actor only when "(1) he has a legally protected interest, and (2) in good faith asserts or threatens to protect it, and (3) the threat is to protect it by proper ...

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