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09/17/97 KURT J. LESKER COMPANY v. PLASMATERIALS

SUPREME COURT OF PENNSYLVANIA


September 17, 1997

KURT J. LESKER COMPANY, APPELLEE,
v.
PLASMATERIALS, INC. AND DONALD J. SARRACH, APPELLANTS.

Appeal from the Order and Memorandum Opinion of the. Superior Court at No. 0606PGH94. entered Sept. 29, 1995, affirming. the order of the Court of Common. Pleas of Allegheny County, Civil. Division entered. March 30, 1994 at GD 91-06614.

Appeal from the Order of the Superior Court at No. 0606PGH94 entered on September 29, 1995, affirming the Order of the Court of Common Pleas of Allegheny County, Civil Division, entered on March 30, 1994, at No. GD 91-06614.

Composition OF The Court: Mr. Chief Justice John P. Flaherty. Zappala, Cappy, Castille, Nigro, Newman, JJ. Mr. Justice Castille files a Dissenting statement in which Mr. Justice Nigro joins.

ORDER

PER CURIAM

AND NOW, this 17th day of September, 1997, the appeal in the above-captioned case is hereby dismissed as having been improvidently granted.

Mr. Justice Castille files a Dissenting statement in which Mr. Justice Nigro joins.

DISSENTING STATEMENT

JUSTICE CASTILLE

DECIDED: SEPTEMBER 17, 1997

One of the issues raised in this matter is whether the trial court should have allowed appellee to use an unsigned document as evidence that Sarrach had violated a restrictive covenant he had allegedly entered into with it. Because I believe the circumstances of this case raise important issues and public policy considerations in this era of corporate downsizing, I must respectfully Dissent from the majority's decision to dismiss this matter as improvidently granted.

In July of 1982, appellee offered Sarrach the position of vice president of technical matters. The offer letter appellee sent Sarrach made no mention of Sarrach's acceptance being contingent upon his consent to any employment agreement or restrictive covenant. Upon accepting the position, appellee testified that he was not asked to sign an employment agreement. Approximately one year later, however, after certain key employees left appellee and started up a

competing company, Kurt Lesker, the owner of appellee, approached him about signing an employment agreement at that time. Sarrach testified that he declined to sign the agreement because it was "too one-sided". Per Sarrach, the issue of the employment agreement was never addressed again before his departure from appellee.

In 1987, appellee terminated Sarrach's employment. Sarrach testified that the day after he was fired, he and Lesker met and discussed, among other things, possible employment opportunities for Sarrach and certain concerns Lesker had about appellant later competing with appellee. Appellant testified that a few days after the meeting, Lesker told appellant that he would give him three months severance pay and that appellant would have to sign a separation agreement. Appellant testified that he read the separation agreement and that he recalled inserting something into the agreement to address certain concerns he had about medical benefits. Sarrach further testified that although the separation agreement made reference to an employment agreement, that an employment agreement was not attached and that based upon his Discussions with Lesker and the fact that he had never signed an employment agreement, the reference did not concern him.

After signing his separation agreement (presumably to receive his severance pay), Sarrach departed and started his own company, Plasmaterials, Inc. Appellee commenced the underlying action alleging, inter alia, that it sustained certain damages as a result of Sarrach's violation of a restrictive covenant it claimed Sarrach agreed to while employed with it. Specifically, appellee claimed Sarrach had used confidential trade secrets of appellee to underbid it on projects. Based upon the evidence presented to the jury, the jury entered a verdict against Plasmaterials for $108,160 in compensatory damages and $500,000 in punitive damages, and against Sarrach in the amount of $143,463 in compensatory damages and $500,000 in punitive damages.

One of appellee's key claims was that it was entitled to damages from appellants because Sarrach violated a restrictive covenant contained in an employment agreement he had with appellee. *fn1 Appellee, however, could not produce any signed employment agreement between it and Sarrach containing the restrictive covenant at issue, and did not offer an explanation for its absence other than to say that the owner of the company had apparently placed it in his personal drawer and had lost it. *fn2 Because appellee had allegedly lost the employment agreement, which would have been in its control, the trial court allowed appellee to use an unsigned contract as evidence of the terms of the restrictive covenant appellee claimed applied to Sarrach.

I believe this Court should address this matter on its merits as I believe guidance is needed from this Court as to when it is appropriate for a trial court to allow the use of unexecuted documents as proof that a restrictive employment covenant existed between the parties and to clarify the use of such documents under the principles of the Best Evidence Rule. Accordingly, I Dissent from the Court's dismissal of this matter.

Mr. Justice Nigro joins this Dissenting statement.


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