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OBERG INDUSTRIES v. DAVID R. FINNEY AND PENN UNITED TECHNOLOGY (03/15/89)

filed: March 15, 1989.

OBERG INDUSTRIES, INC., APPELLEE,
v.
DAVID R. FINNEY AND PENN UNITED TECHNOLOGY, INC., T/D/B/A AMERICAN CARBIDE TOOLING, APPELLEE. APPEAL OF PENN UNITED TECHNOLOGY, INC., T/D/B/A AMERICAN CARBIDE TOOLING, APPELLANT. OBERG INDUSTRIES, INC., APPELLEE, V. DAVID R. FINNEY AND PENN UNITED TECHNOLOGY, INC., T/D/B/A AMERICAN CARBIDE TOOLING, APPELLEE. APPEAL OF DAVID R. FINNEY, APPELLANT



Appeal from the Order entered May 23, 1988 in the Court of Common Pleas of Butler County, Civil Division, at No. Equity No. 88 024 Book 25 Page 86.

COUNSEL

Margaret F. Houston, Pittsburgh, for Penn United, appellant (at 863) and for Penn United, appellee (at 924).

Richard S. Ombres, Pittsburgh, for Finney, appellee (at 863) and for Finney, appellant (at 924).

Ronald W. Crouch, Pittsburgh, for Oberg, appellee.

Brosky, Del Sole and Johnson, JJ.

Author: Del Sole

[ 382 Pa. Super. Page 527]

This is an appeal from a trial court order which granted Appellee, Oberg Industries, Inc.'s, request for a preliminary injunction against its former employee, Appellant, David R. Finney. Mr. Finney and his new employer, Penn United Technology, Inc., assert that the court erred in finding, absent a restrictive covenant, that it was necessary to issue an injunction to prevent Mr. Finney from "inevitably" disclosing certain trade secrets as a salesman for a competitor. In the alternative, Appellants also allege that the injunction is impermissibly vague and overly broad. Because we find support for Appellants' first claim and reverse the trial court's order, we will not address the second argument advanced by Appellants.

Certain findings were made by the trial court regarding Mr. Finney's position with his former employer and the knowledge he obtained during the period of his employment. Oberg, which produces carbide stamping dies and related items hired Finney, who had no significant prior experience in the industry, in 1966. He began work as a grinder but ultimately was promoted to the position of General Sales Manager. The court found that Finney learned virtually all of the information relating to the development, design, cost, profitability and production of Oberg's products as well as information pertaining to the company's sales and marketing goals and strategies. It further noted that he had access to the status and details of all current negotiations, understandings, requests for quotations, purchase orders, customer's special needs, manufacturing costs, and internal yields on products. He was also

[ 382 Pa. Super. Page 528]

    able to access Oberg's methods of engineering, pricing, estimating and scheduling, and other details of Oberg's financial standing. As a key employee, Finney and a small number of other Oberg employees received three reports, which the court found constituted trade secrets. The court reached this conclusion based upon its findings that the reports were compiled by Oberg at great expense and effort, the reports were, to Oberg's knowledge, the only reports of this information in the world and Oberg had the right to expect that they would be kept confidential.

The reports at issue consist of three separate items. The first is a customer sales activity report. Prepared quarterly, it lists the name of every customer in each of Oberg's divisions along with the amount of the product which has been shipped to that customer for the four preceding calendar years as well as for the year to date. The second item is a quotation recap report. The report includes every quotation made to a customer or potential customer, the number of hours estimated to manufacture the requested product, and the projected yield per hour. It was prepared weekly. The final report is a business directory, a master customer address and telephone reference. It lists not only customer names, but contact persons. Approximately 4,000 names appear on this list.

It is significant to note that the trial court did not find that Finney took these reports with him when he left Oberg's employ in 1988. Nor did it find that Finney revealed the contents of these reports. Nevertheless the court concluded that Finney "would utilize his knowledge of the plaintiff's trade secrets either knowingly or subconsciously for the benefit of defendant employer, and to the detriment of plaintiff". Trial Court Opinion at 6. To prevent such disclosure, the court issued an order enjoining and restraining Finney from employment with Penn United which competes with Oberg, from disclosing any trade ...


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