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NEW CASTLE ORTHOPEDIC ASSOCIATES v. JOHN T. BURNS (11/01/78)

decided: November 1, 1978.

NEW CASTLE ORTHOPEDIC ASSOCIATES
v.
JOHN T. BURNS, APPELLANT



No. 123 March Term, 1978, Appeal from the Order of the Superior Court of Pennsylvania at No. 833 April Term, 1977, affirming the decree of the Court of Common Pleas of Lawrence County Civil Division, at No. 12 of 1977.

COUNSEL

Richard J. Mills, Spencer D. Hirshberg, Meyer, Darragh, Buckler, Bebenek & Eck, Pittsburgh, for appellant.

Irving M. Portnoy, Litman, Litman, Harris & Specter, P. A., Pittsburgh, for appellee.

Eagen, C. J., and O'Brien, Roberts, Pomeroy, Nix, Manderino and Larsen, JJ. Eagen, C. J., and Larsen, J., concurred in the result. Roberts, J., filed a dissenting opinion in which O'Brien, J., joined.

Author: Nix

[ 481 Pa. Page 462]

OPINION

Appellant Burns, a medical doctor specializing in orthopedics, entered into an employment contract with appellee New Castle Orthopedic Associates (Orthopedic) in November, 1975. Orthopedic is a professional association of four doctors located in Lawrence County. The employment agreement provided for Dr. Burns' employment for one year beginning January 1, 1976, at an annual compensation of $60,000. It contained the following covenant not to compete:

"In the event that Burns leaves the employment of Orthopedic on or before January 1, 1977, . . . Burns agrees that he will not practice medicine and/or orthopedics in any form whatsoever in Lawrence County, Pennsylvania, for a two (2) year period after terminating his employment with Orthopedic."

In November, 1976, Dr. Burns expressed dissatisfaction with his relationship with Orthopedic and indicated that he would seek other employment. A new contract was negotiated and executed on December 30, 1976, providing for a five month period of further employment beginning January 1, 1977, at a monthly salary of $7,500, or $2,500 more than Dr. Burns' previous monthly salary. The new contract expressly nullified all obligations under the former employment contract and also contained the following covenant not to compete:

"In the event the employment of Employee, as provided for hereunder is terminated for any reason whatsoever, the Employee expressly agrees that he will not practice medicine and orthopedics in any form whatsoever in Lawrence County, Pennsylvania, for a two year period after the termination of his employment with the Employer."

[ 481 Pa. Page 463]

Pursuant to a clause allowing either party to terminate the new contract on two weeks' notice, Dr. Burns resigned from Orthopedic effective March 28, 1977. He thereafter opened his own office in Lawrence County and began to practice medicine and orthopedic surgery on his own behalf. Orthopedic brought this action in equity against Dr. Burns seeking specific enforcement of the covenant and sought a preliminary injunction. The preliminary injunction was granted on May 13, 1977, following a hearing at which both parties were present and represented by counsel. The Superior Court affirmed per curiam without opinion with one Judge noting a dissent. We granted review and now reverse the grant of the preliminary injunction.

The standard by which we review the propriety of the issuance of a preliminary injunction limits equitable relief to instances where it is established that a subsequent award of damages would be inadequate to compensate the loss suffered by a plaintiff who has prima facie established a clear right of recovery. At all times it must be remembered that a preliminary injunction seeks to maintain the status quo until the rights of the ...


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