No. 00562 PITTSBURGH, 1984, Appeal from an Order entered April 25, 1984 in the Court of Common Pleas, Civil Division, of Allegheny County, No. G.D. 84-2326.
Edward G. O'Connor, Pittsburgh, for appellant.
Paul G. Walker, Jr., Pittsburgh, for appellees.
Brosky, Watkins and Hester, JJ. Brosky, J., files a concurring and dissenting opinion.
[ 338 Pa. Super. Page 248]
In February, 1973, appellee, Thomas F. O'Connor, was hired as an employee of appellant, Robert Clifton Associates, Inc., an employment agency located in Greentree, Pennsylvania. Appellant is a closely held corporation with Robert Gerbi and Gabriel Rocco as its sole shareholders. On April 17, 1973, appellee O'Connor and appellant entered into a "non-compete" agreement, which provides in pertinent part, as follows:
Restrictive Covenant. For a period of 12 months after the date of termination of this Agreement, the Employee will not, within a radius of 75 miles of any city in which Robert Clifton Associates, Inc., owns, maintains or operates a personnel consulting service, directly or indirectly
[ 338 Pa. Super. Page 249]
own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation, or control of any business similar to the type of business conducted by the Company at the time of the termination of this Agreement. However, if the Employee is discharged by reason of lack of work by the Company, then the above-mentioned restrictions shall not apply.
During this same period, appellant's employees were requested to execute similar agreements. Moreover, prior to the execution of this document, at least one of appellant's employees had been requested to sign a covenant which restricted employees after termination from competing with appellant for a period of six months and within a fifty mile radius of appellant's business.
Appellee O'Connor, at the beginning of his employment with appellant, was paid a guaranteed salary of $500.00. After signing the aforementioned agreement, O'Connor was placed on a draw with a 33 1/3% commission on placements. This draw was subject to sales. O'Connor continued in the employ of appellant wherein he became one of appellant's top employees until his resignation on January 13, 1984. He immediately started his own employment agency, O'Connor, O'Connor & Lordi, L.T.D. in Carnegie, Pennsylvania, approximately 6 miles southwest of Greentree. In operating his own business, two former clients O'Connor had serviced when he was with appellant transferred their search contracts to him. O'Connor had contacted other Clifton clients following his departure.
The lower court, upon appellant's petition for a temporary injunction based upon the terms of the restrictive covenant, granted appellant's request for a temporary injunction but only to the extent of a four-month period and confined to Allegheny County. The lower court gave the following reasons for modifying the covenant:
"The plaintiff [appellant] is not alleging trade secrets or customer lists but is basing the allegations of irreparable harm on a few incidents wherein former customers of
[ 338 Pa. Super. Page 250]
Clifton have elected to contact O'Connor. Contrariwise, the defendant [appellee, O'Connor] is a young man, aged 33, with prior experience in the personnel field. If an injunction issues for any sizable period of time, the defendant will suffer serious loss of income. The Court, also, must consider the actions of the individual officers of plaintiff in approaching the defendant to start a new business. Such activity indicates the lack of reliance on the part of the plaintiff to the alleged non-compete agreement. There is an inconsistency between the offers or interest of the individual officers of plaintiff in setting up a competing business and the instant lawsuit to enjoin the defendant from operating his own agency.
It is our further conclusion that, based upon the character of the placement agency business, plaintiff's prayer for relief is excessive and punitive in nature. Corporate management receives referrals from a variety of sources and little is required in the way of special education or training to enter the business. In this case, O'Connor had already acquired experience before affiliation with Clifton.
Therefore, we find that a non-compete agreement was signed by the defendant, ignored in part by plaintiff, and seeks excessive relief. Plaintiff was grated (sic) a four-month period to notify its clients that O'Connor was no longer a member of the firm and to seek to retain their business."
Appellant has thus filed the present appeal seeking to have the full restrictive covenant embodied in the temporary injunction. In asserting this position, appellant has raised the following two issues: 1) whether the lower court erred in allegedly considering facts not in the record; and 2) whether the lower court erred in concluding that the duration, geographic scope and activities governed by the restrictive covenant were unreasonable.
Regarding appellant's first issue, appellant specifically contends that there were insufficient facts of record to: 1) establish that appellee ...