Court Opinion

ID: 9698056
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:40:29.831007+00
Date Added: 2024-06-11T18:20:38.009252
License: Public Domain

*456OLSZEWSKI, Judge,
concurring:
I concur in the result.
While I agree with the majority’s well-reasoned disposition of the first two issues, I respectfully disagree with the treatment of the constitutional issue. Appellant challenges the trial court’s enforcement of a private non-competition agreement on equal protection grounds. Since I believe that court enforcement of this covenant not to compete does not involve any state action in the constitutional sense, I would decline appellant’s invitation to reach out and needlessly decide a very difficult and sensitive constitutional issue.
Appellant asserts that judicial enforcement of the covenant not to compete in paragraph 8 of his employment contract would constitute state action, so as to implicate the United States and Pennsylvania Constitutions. For support, appellant cites to Shelley v. Kraemer and its progeny. 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948). A careful review of the purpose and the holding of Shelley leads me to the conclusion that the judicial conduct at issue here has no constitutional dimension.
The doctrine of state action' that arose from Shelley was effectively capsulized in Palmore v. Sidoti, where the United States Supreme Court stated that “[pjrivate biases may be outside the reach of the law, but the law cannot, directly or indirectly, give them effect.” 466 U.S. 429, 433, 104 S.Ct. 1879, 1882, 80 L.Ed.2d 421, 426 (1984) (emphasis added). Thus, in searching for state action, we look for either direct or indirect support, by a court, of a private discrimination or bias. See id.
In the most egregious illustration of direct support of private discrimination, Shelley v. Kraemer, a court would, in effect, have coerced such discrimination by enforcing a racially restrictive covenant.1 334 U.S. at 31, 68 S.Ct. at 845, 92 L.Ed. *457at 1183. In a similar situation in Barrows v. Jackson,2 the Supreme Court wrote, “[i]f the state may thus punish respondent for her failure to carry out her covenant, she is coerced to continue to use her property in a discriminatory manner, which in essence is the purpose of the covenant.” 346 U.S. 249, 253-4, 73 S.Ct. 1031, 1033, 97 L.Ed. 1586, 1594 (1953). These cases illustrate situations where the state action is found in a court’s direct, coercive support of private discrimination.
In this ease, we have no similar coercion. Analogizing the facts of Shelley to this case suggests the following scenario: DeMuth includes a clause in all employment contracts in which he, as the employer, promises to fire any employee found to be a homosexual. After hiring Miller, DeMuth finds out that Miller is a homosexual. DeMuth, however, decides not to fire Miller and another employee sues DeMuth seeking to enforce Demuth’s discriminatory promise. If a court enforced De-Muth’s promise, it would be coercing private discrimination. Since this hypothetical scenario is not present here, Shelley is not directly applicable.
A step further removed is an instance where the court is not coercing one to discriminate, but is directly supporting private discrimination by enforcing a direct penalty against an individual based on discriminatory bias. Under Palmore, this kind of direct support would still qualify as state action. 466 U.S. at 433, 104 S.Ct. at 1882, 80 L.Ed.2d at 426. This direct support, however, is also not present here.
An example of such direct support would be the following scenario: DeMuth and Miller sign a contract stating that if DeMuth found out that Miller was a homosexual, Miller will refund all of the salary that he received from DeMuth since the date he was hired. If DeMuth then found out about *458Miller’s sexual preference and Miller refused to pay, DeMuth would need to sue under the contract for damages. A court’s enforcement of this contract would be an example of direct support of a private bias.
In contrast to this hypothetical contract, the actual contract at issue here does not seek to directly penalize Miller for his sexual preference. Rather, it seeks to directly penalize Miller for his business competition with DeMuth in violation of Miller’s written promise not to compete. Thus, court enforcement of this covenant not to compete does not lend direct support or give direct effect to a private bias.
According to Palmore, a court also cannot indirectly support or give effect to a private bias. Id. This area of indirect support is a delicate one, however, as it was not the intention of the Supreme Court to convert all private actions into state actions based solely on judicial enforcement of a private contract. See Luna Brothers and Company v. Allen, 672 F.2d 347, 354 (3rd Cir.1982) (holding that judicial enforcement of a contract cannot convert what would otherwise be a private matter into state action) (citing Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 165, 98 S.Ct. 1729, 1738, 56 L.Ed.2d 185, 199 (1978)); see also Wilco Electronic Systems v. Davis, 375 Pa.Super. 109, 114, 543 A.2d 1202, 1205 (1988), appeal denied, 520 Pa. 619, 554 A.2d 511 (1988). Therefore, we must be cautious in characterizing a court’s involvement as indirect support, lest we transform all private acts into acts of the state. After careful examination of this case with these doctrinal limits in mind, I believe that court enforcement of the covenant not to compete fails to rise to the level of even indirect support for private discrimination.
DeMuth’s suit for damages based on the covenant not to compete does not require any court involvement at all in the alleged discrimination. Miller specifically states that he is not challenging the validity of his termination, which admittedly was on the grounds of his homosexuality. Brief for appellant at 10-11. The issue raised is simply whether a court’s en*459forcement of a non-competition clause in an employment agreement violates federal or state constitutional law.
The non-competition clause at issue reads:
8. Contingent Note Payable: If within five years of the termination of this Agreement if the Employee terminates the Agreement or the Employer terminates the Agreement for cause, and the Employee establishes a professional management consulting or accounting firm within a 50-mile radius of any of Employer’s current or former clients, he agrees to pay the Employer 125% of the previous 12 months’ charges for each of the employer’s clients who retain his professional management consulting or accounting services. Cause shall include, but is not limited to, moral turpitude, being charged with a felony, use of illicit drugs, intoxication while working, insulting Employer’s family and clients, not working, intentionally working slowly, intentionally losing clients, engaging in sexual activities in the office, and homosexuality.
R.K. at 13a. Appellee DeMuth admitted that he fired Miller for his alleged homosexuality. That firing, however, is a done deal and Miller is not now challenging it. There was simply no court involvement in Miller’s termination.
Court involvement began after Miller’s termination. Instead of being asked to enforce any alleged discrimination or illegal termination, this Court is merely being asked to enforce a private, consensual contract clause in which Miller promises not to compete -with DeMuth after their employment relationship is over. The clause could have been triggered for any number of “causes”, and after any one of the triggers, this Court’s involvement would have been the same: enforcing a standard non-competition clause in a private agreement by its stated terms. In terms of the court’s enforcement of the clause, the reason appellant was originally fired is not an issue.
If this clause had not listed homosexuality as “cause” and DeMuth had sought to enforce it after firing Miller, then the reasons for Miller’s termination would be at issue. We would *460then be required to determine whether Miller’s sexual preference constituted “cause” for his termination, and this determination would arguably present an instance of indirect support. In the present case, however, the parties have addressed and resolved that issue privately. This Court need only enforce Miller’s promise not to compete with DeMuth if he were to quit or be fired for cause. By enforcing this promise, we are not expressing approval of the reasons for Miller’s termination. We are simply saying that Miller, like anyone else, homosexual or heterosexual, must abide by his own written promise not to compete with his ex-employer for a certain number of years. I believe that under these circumstances, a court’s enforcement of the bargained-for economic rights of the parties does not constitute indirect support for private discrimination. Thus, even if we were to assume that discrimination on the basis of sexual preference violates equal protection, there is no state action and neither the federal or state constitutions are implicated. I concur in the majority’s result, but feel that the constitutional discussion was unnecessary.

. In Shelley, a group of homeowners signed contracts that prohibited the sale of their homes to anyone other than Caucasians. 334 U.S. at 5-6, 68 S.Ct. at 838-39, 92 L.Ed. at 1176-77. When several of the homeowners defied the contracts and sold to African-Americans, the *457remaining homeowners sued for an injunction seeking to block the sales. Id.

. In Barrows, homeowners sued for damages against a fellow homeowner who initially signed a racially restrictive covenant, but then sought to sell her land in violation of the covenant. 346 U.S. 249, 251-52, 73 S.Ct. 1031, 1032-33, 97 L.Ed. 1586, 1592-93 (1953).