No. 2252 Philadelphia, 1982, Appeal from the Order of July 27, 1982 in the Court of Common Pleas of Delaware County, Civil Action, at No. 82 - 7117.
Edward C. German, Philadelphia, for appellants.
Jerrold Moss, Media, for appellee.
Spaeth, Wickersham and Cirillo, JJ.
[ 306 Pa. Super. Page 66]
This is an appeal from an order upholding the validity of a covenant not to compete and granting an injunction. Appellants argue (1) that the covenant is unenforceable because it was not supported by consideration; (2) that appellee, as appellant's employer, has no "protectible" interest that enforcing the covenant would uphold; and (3) that the injunction is overbroad. The first two arguments are without merit, but we believe that the injunction is overbroad and therefore remand for further proceedings.
Appellee, Gordon Wahls Company, is an employment agency specializing in finding executives for companies in the printing industry. Appellants are former employers of Wahls. Appellant Roger W. Linde went to work for Wahls in May 1970, and appellant Christopher W. Kellogg, in October 1975. In February 1982 they left Wahls and set up a competitive business of their own, appellant Graphic Search Associates.
[ 306 Pa. Super. Page 67]
During his employment with Wahls, Linde signed three employment agreements. The third agreement was signed April 18, 1973, and is the agreement that Wahls seeks to enforce. It contains a covenant that for one year after Linde's employment with Wahls ends, Linde will not compete with Wahls in twenty one specified states and the District of Columbia. The covenants in the two earlier agreements had no express geographical limit. The third agreement also increased Linde's commission, and provided disability benefits. The increase in Linde's commission was announced before the agreement was executed, specifically, on April 2, 1973.
The agreement that Wahls seeks to enforce against Kellogg was signed January 14, 1976. It contains the same convenient as the Linde agreement. It also provided that effective January 2, 1976, Kellogg's compensation was converted from a salary -- to a commission -- basis, required thirty days' notice of termination, and provided long-term disability benefits.
Appellants' argument that their covenants were not supported by consideration is that the April 2, 1973, announcement of Linde's commission increase, and the January 2, 1976, effective date of Kellogg's going onto commissions, created pre-existing obligations. If, appellants reason, Wahls was already obliged to increase their compensation, before the agreements were signed, their promises in those agreements not to compete were not ...