Court Opinion

ID: 9634915
Source: CourtListenerOpinion
Date Created: 2023-08-22 13:28:32.177329+00
Date Added: 2024-06-11T18:09:12.790778
License: Public Domain

BROSKY, Judge,
dissenting:
I must respectfully dissent from the majority’s affirmance of the preliminary injunction fashioned below. I concur in the majority’s finding that the hearing court had reasonable grounds for the granting of an injunction enforcing the restrictive covenant. However, I feel that appellant’s fourth issue on appeal, challenging the breadth of the injunction, has merit.
It is well-established proposition that the scope of appellate review with respect to the grant, refusal, or continuance of a preliminary injunction, is very limited. We may only determine if there were any apparently reasonable grounds for the actions of the court below; we may not further consider the merits of the case, or pass upon the reasons for or against such action, unless it is plain that no such grounds existed, or that the rules of law relied upon were palpably wrong or clearly inapplicable. Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250, 257 (1976); Credit Alliance Corp. v. Philadelphia Minit-Man Car Wash Corp., 450 Pa. 367, 301 A.2d 816, 818 (1973); Zebra v. Pittsburgh School District, 449 Pa. 432, 296 A.2d 748, 750 (1972). Moreover, to determine if reasonable grounds existed for the action of the hearing court, an appellate court must review the evidence below to discern if the three prerequisites for the grant of a preliminary injunction were present: a clear right to relief in the plaintiff, an immediate need for relief, and the danger of irreparable injury to the *203plaintiff in the absence of an injunction. Sidco, supra; Credit, supra; Zebra, supra.
With this in mind, it is clear that we may not reach the merits of the covenant itself unless we find that the record below is totally devoid of any evidence to support the court’s decision to enforce the covenant, or that the court patently misapplied the law on post-employment restraints. Any decision on the merits of the covenant, with respect to its breadth in terms of proscribed activity, geographical area, and duration, are reserved to the chancellor in equity.
Preliminary review of the record indicates that the hearing court’s findings were not totally unsupported by the evidence, or the result of misapplied law.
Appellee Blair presented testimony as to why the anti-competitive clauses in appellant’s employment agreement were needed to protect the legitimate business interests of Blair, and that appellant was aware that he was prohibited from soliciting business from Blair’s customers for a period of three years. I question the hearing court’s interpretation of the term “customers” as it relates to the agreement’s prohibitions, and the ultimate chancellor in equity may find fault with the court’s broad reading of the term. However, I cannot deem this interpretation to be totally devoid of evidentiary support, or patently unreasonable.
Furthermore, I cannot aver that the hearing court relied upon palpably inapplicable law, or committed clear error in its reading of the law. It is not unreasonable as a matter of law for an employer to assert a protective interest in the goodwill it has developed, by virtue of effort and expenditures, over a period of time, as to customers acquired prior to an employee’s tenure, as well as during his employment. Sidco, supra, p. 254. Furthermore, a three year prohibition is not, per se, illegal, if related to the employer’s legitimate business interests. See Restatement of Contracts, Second, § 188, Comment d. Hence, while a chancellor in equity may ultimately decide to limit the scope of the prohibition in terms of customers involved and time span, the hearing *204court did not uphold any terms in the covenant which were clearly contrary to law.
As such, I do not feel that any analysis of the first three contentions on appeal, with respect to the actual merits of the covenant, is appropriate. This leaves appellant’s fourth contention: in light of the three prerequisites for a preliminary injunction, is the injunction overbroad or indefinite?
With respect to the latter two criteria, a need for immediate relief and the possibility of irreparable harm, I am in accord with the hearing court that the testimony presented supports a finding that appellant’s actions constituted both immediate and irreparable harm. Clearly, appellant had been submitting bids on projects involving Corn Dog, Hot Sam Pretzel, and Original Cookie stores. As a further matter, appellant did not indicate an intention to blanketly refrain from submitting bids on jobs involving Blair customers apart from these three chains. The threatened loss of goodwill to Blair alone, as a result of appellant’s actions, mandated an immediate preliminary determination of the protection afforded Blair by the covenant, and an injunction enforcing that protection. It is only with respect to the initial criterion, the clarity of Blair’s right to relief as to all past and present customers, that I discern a problem of overbreadth with the injunction as issued.
The injunction fashioned by the hearing court enjoins appellant from:
... doing business with customers of the plaintiff Blair Design and Construction Company, Inc. in violation of the restrictive covenants ..., or otherwise interfering with the plaintiff’s relationships with plaintiff’s customers in any manner or method whatsoever____
The hearing court did not find the omission of Corn Dog, Hot Sam Pretzel, and Original Cookie, from the customer list to be problematic in its determination of the appropriate prohibition to be issued against appellant. Clearly, the hearing court found appellant’s subjective knowledge as to the status of these three chains as customers of Blair to be some evidence that appellant was well aware of the identity *205of Blair’s customers, and consequently relied upon appellant’s knowledge, in addition to the covenant itself, to fashion an injunction barring appellant from contact with all past and present customers of Blair, including these three. The majority, moreover, expressly holds that the hearing court acted reasonably in placing reliance upon appellant’s subjective knowledge when it fashioned an injunction restraining appellant from further dealings with Corn Dog, Hot Sam Pretzel, and Original Cookie. This, however, cannot be deemed the clear and indisputable intent of the parties from the language of the covenant. The covenant specifically refers to a prohibition with respect to customers on the list, and new customers acquired during appellant’s employment. While a chancellor in equity may determine at a later date, that the covenant was intended to include customers not specified on the list, it cannot be said at this time that Blair has a clear right to restrain appellant from dealing with, and submitting bids to, omitted customers, such as Corn Dog, Hot Sam Pretzel, and Original Cookie. Even the majority concedes that the omitted customers fall within a “gray area of the restrictive covenant.” Taken at face value, the hearing court’s restraint is, in reality, a resolution on the merits of the interpretation question: it restrains appellant from dealing with Blair customers not specified on the list, based upon its interpretation of the intent behind the covenant. This, clearly, was in excess of the hearing court’s function. In affirming the hearing court’s restraint as to omitted customers such as Corn Dog, Hot Sam Pretzel, and Original Cookie, the majority places its imprimatur upon the hearing court’s usurpation of the function of the chancellor in equity. I, however, cannot condone the hearing court’s impropriety, and would hold the injunction to be overbroad in restraining appellant from further dealings with omitted customers, such as these three.
With respect to customers on the list, as well as new customers acquired during appellant’s tenure, I feel that the hearing court’s restraint was appropriate. If nothing else, Blair is clearly entitled to relief with respect to them. *206My difficulty here, however, results from the hearing court’s decision to issue a blanket restraint. Because the court below took the position that all Blair customers were “off limits” to appellant, it did not make any factual findings as to what companies became Blair customers after appellant was hired.
In light of the foregoing, I would modify the preliminary injunction, and remand the matter for further proceedings as follows: I would vacate the preliminary injunction with respect to those Blair customers that were already customers at the commencement of appellant’s employment, but who were omitted from the customer list attached to the employment agreement. I would affirm the injunction as to those customers specifically named on the customer list, as well as to those customers who were acquired by Blair during appellant’s period of employment, whose names would be determined by further hearing below.