Court Opinion

ID: 3195698
Source: CourtListenerOpinion
Date Created: 2016-04-19 21:09:13.428356+00
Date Added: 2024-06-11T14:36:26.857083
License: Public Domain

J-S19044-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BENGAL CONVERTING SERVICES, INC.            :        IN THE SUPERIOR COURT OF
                                            :              PENNSYLVANIA
            v.                              :
                                            :
RYAN GIBNEY,                                :
                                            :
                 Appellant                  :            No. 1626 EDA 2015

                 Appeal from the Order entered May 18, 2015
            in the Court of Common Pleas of Montgomery County,
                          Civil Division, No. 15-09220

BEFORE: BENDER, P.J.E., STABILE and MUSMANNO, JJ.

MEMORANDUM BY MUSMANNO, J.:                             FILED APRIL 19, 2016

     Ryan Gibney (“Gibney”) appeals from the Order granting emergency

injunctive relief to Bengal Converting Services, Inc. (“Bengal”). We affirm

the Order, as modified in accordance with this Memorandum.

     In its Opinion, the trial court set forth its findings of fact, which we

adopt herein for this appeal. See Trial Court Opinion, 7/23/15, at 1-4.

     On April 30, 2015, Bengal filed a Complaint for Emergency Injunctive

Relief based on Gibney’s violation of the confidentiality and non-compete

covenants included in his employment agreement with Bengal (“Employment

Agreement”). On May 18, 2015, the trial court entered an Order granting a

temporary   preliminary   injunction   to   Bengal    (“the   injunction   Order”).

Thereafter, Gibney filed a timely Notice of Appeal and a court-ordered

Statement of Matters Complained of on Appeal.

     On appeal, Gibney raises the following issues for our review:
J-S19044-16

     1. Did the trial court err by enforcing[,] until May 15, 2017[,]
        the two-year non-compete provisions in the [E]mployment
        [A]greement entered on September 16, 2013[,] between
        Bengal [] as the employer, and [] Gibney[,] as the
        employee[,] where Gibney’s employment by Bengal had been
        terminated on December 31, 2013[,] when Bengal removed
        Gibney from its payroll, and thereafter Gibney was paid as a
        subcontractor by Monterey Leasing LP [“Monterey”], and
        issued an IRS Form 1099 for his work?

     2. Did the trial court err by enforcing the non-compete
        provisions in the Employment Agreement beyond the scope of
        the restrictions contained in the Employment Agreement that
        limited Gibney’s employment within 200 miles of Bengal’s
        business location?

     3. Did the trial court err by failing to conclude that Bengal
        breached the Employment Agreement with Gibney because
        Bengal failed to pay Gibney the compensation to which
        Gibney was entitled under the terms of the Employment
        Agreement, and Bengal was thereby barred from equitable
        relief by the doctrine of unclean hands?

     4. Did the trial court err by incorrectly concluding that Gibney
        engaged in competition with Bengal when Gibney sold paper
        for Edgewood Paper Company [“Edgewood”], which is a
        “broker,” not a competitor of Bengal, which is a
        “converter[?]”

     5. Did the trial court err by deciding [that] the experience,
        knowledge and skill obtained by Gibney[,] as a result of his
        employment by Bengal, was confidential information that
        belonged to Bengal, and was entitled to protection as
        Confidential Material under the terms of the Employment
        Agreement?

     6. Did the trial court err by granting an injunction where Bengal
        failed to provide evidence to support the prerequisites for
        injunctive relief?

                                -2-
J-S19044-16

Brief for Appellant at 4-5.1

      The purpose of a preliminary injunction is to prevent irreparable injury

or gross injustice by preserving the status quo as it exists, or as it previously

existed before the acts complained of in the complaint. Ambrogi v. Reber,

932 A.2d 969, 974 (Pa. Super. 2007).

             [O]n an appeal from a decree … granting … a preliminary
      injunction, we will not inquire into the merits of the controversy,
      but will, instead, examine the record only to determine if there
      were any apparently reasonable grounds for the actions of the
      court below. Moreover, we will not 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 on are palpably wrong or
      clearly not applicable.

Sidco Paper Co. v. Aaron, 351 A.2d 250, 257 (Pa. 1976) (internal citations

and quotation marks omitted).

      In his first issue, Gibney contends that, as of September 16, 2013, he

was employed by Bengal as an at-will employee under the terms of the

Employment Agreement, and subject to termination for any reason or no

reason. Brief for Appellant at 27. Gibney asserts that, beginning January 1,

2014, Bengal unilaterally converted Gibney to subcontractor status, and his

pay was drastically reduced. Id. at 25-26. Gibney claims that, by changing

his employment to subcontractor status, Bengal terminated his at-will

employment status.     Id.     Gibney contends that, because his employment

1
 The Argument section of Gibney’s brief on appeal does not correspond to
his Statement of Questions Involved. See Pa.R.A.P. 2119(a). Thus, we
have attempted to locate within Gibney’s brief the portions of his Argument
which correspond to the questions he raises on appeal.

                                   -3-
J-S19044-16

under the Employment Agreement terminated as of December 31, 2013, the

two-year non-compete covenant contained therein must terminate as of

December 31, 2015.      Id. at 25.   Gibney argues that such termination is

consistent with the definition of “Separation of Service” found in the

Employment Agreement.2 Id. Gibney contends that the trial court erred by

concluding that he continued to be employed by Bengal, under the terms of

the Employment Agreement, until May 15, 2015, even though he was no

longer paid as an employee, and his pay was drastically reduced from the

amount promised in the Employment Agreement. Id. at 28. Gibney asserts

that the trial court improperly expanded the terms of the Employment

Agreement by extending the non-compete restriction until May 15, 2017.

Id. at 25-26. Gibney further asserts that the restriction on his employment

should not have been enforced under the circumstances of this case, and the

trial court erred by enforcing the restriction beyond December 31, 2015. Id.

      The trial court addressed Gibney’s first claim, set forth the relevant

law, and concluded that, because the Employment Agreement was entered

into between Gibney, on the one hand, and Bengal and its affiliates on the

other, Gibney’s change in employment from an employee of Bengal to a

contractor of its affiliate, Monterey, did not operate to terminate the

2
  The Employment Agreement provides that “Separation of Service” means
“the termination of employment, whether voluntary or involuntary, for
‘cause’ or without ‘cause,’ and whether as a result of death, disability or the
cessation of business of [Bengal].” Employment Agreement, 9/17/13, at 6.

                                  -4-
J-S19044-16

Employment Agreement.       See Trial Court Opinion, 7/23/15, at 5-9; see

also id. at 8-9 (finding that, up until his termination on February 16, 2015,

Gibney was, in fact, an employee of Bengal, as he used a car, cell phone and

computer supplied by Bengal, and was required to work fixed hours from

Bengal’s place of business). Our review of the record discloses apparently

reasonable grounds for the trial court’s determination, and, having found no

abuse of discretion, we affirm on this basis as to this issue. See id. at 5-9.

      In his second issue, Gibney contends that the scope of the injunction

Order entered by the trial court exceeds the scope of the covenant not to

compete included in the Employment Agreement, and is per se overly broad.

Brief for Appellant at 29. Gibney points to the 200-mile restriction contained

in the Employment Agreement’s covenant not to compete, and asserts that

the trial court’s injunction Order contains no such restriction. 3   Id. at 29.

Gibney claims that, in its Opinion, the trial court acknowledged its error, but

noted that the 200-mile limitation “does not affect the prohibition against

soliciting Bengal’s customers, who might be anywhere.”               Id. (citing

3
  The non-compete covenant in the Employment Agreement provides, in
relevant part, that “the Employee shall not, within a two hundred (200) mile
radius of any business location of [Bengal,] … be employed by … any
business that provides services or products that compete with the business
then being conducted by [Bengal] ….” Employment Agreement, 9/17/13, at
4.

                                  -5-
J-S19044-16

Trial Court Opinion, 7/23/15, at 9).4

      The trial court addressed Gibney’s second claim, and agrees that the

restriction in the injunction Order, that Gibney not “compete with Bengal in

paper sales and converting for two years,” should be amended to add the

phrase “within 200 miles of any business location of Bengal Converting.”

Trial Court Opinion, 7/23/15, at 9. We agree with the reasoning of the trial

court. Accordingly, the injunction Order must be modified to include, at the

end of paragraph “a,” the phrase “within 200 miles of any business location

of Bengal Converting.”

      In his third issue, Gibney contends that, by entering its injunction

Order, the trial court granted equitable relief to Bengal, despite its unclean

hands. Brief for Appellant at 35. Gibney asserts that Bengal never provided

him with a $1,000,000 life insurance policy that it had promised to provide

to Gibney in the Employment Agreement. Id. Gibney claims that, because

4
 Gibney also points to the restriction in the trial court’s injunction Order that
he not “solicit any customer or former customer of Bengal,” and contends
that the restriction is overly broad, because there is no way for Gibney to
know who is or was a customer of Bengal. Brief for Appellant at 26. Gibney
further asserts that no other employer can hire him without knowing
Bengal’s customers, or they run the risk of participating in Gibney’s violation
of the injunction Order. Id. at 29-30. Gibney did not raise this issue in his
Statement of Matters Complained of on Appeal. Therefore, it is waived.
See Korman Commercial Properties, Inc. v. The Furniture.com, LLC,
81 A.3d 97, 102-03 (Pa. Super. 2013) (holding that, if an appellant is
directed to file a concise statement of matters to be raised on appeal
pursuant to Pa.R.A.P. 1925(b), any issues not raised in that statement are
waived).

                                   -6-
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Bengal breached the Employment Agreement, it should not be permitted to

compel Gibney’s performance under the Employment Agreement. Id.

      In its Opinion, the trial court addressed Gibney’s third claim and

concluded that it lacks merit, stating as follows:

             Page two of the [Employment A]greement contains a
      handwritten notation concerning $2[,000,000] in life insurance,
      half to “wife” and half to “SHK or Bengal[.]”[] The [Employment
      A]greement does not state who was to pay for this insurance,
      and the court finds from this testimony[,] and the fact that the
      policy in favor of [Gibney’s] wife was paid for by payroll
      deductions from [] Gibney, that Bengal [] complied with its part
      of the [Employment A]greement.

Trial Court Opinion, 7/23/15, at 2; see also N.T., 5/15/15, at 130-32

(wherein Scott Korn testified that Bengal paid for the $1,000,000 portion of

the $2,000,000 life insurance policy that was to benefit Bengal in the event

that Gibney died, but that Gibney was required to pay for the other

$1,000,000 portion of the policy that was to benefit his wife). Our review of

the record discloses apparently reasonable grounds for the trial court’s

determination, and, having found no abuse of discretion, we affirm on this

basis as to this issue. See Trial Court Opinion, 7/23/15, at 2, 10; see also

N.T., 5/15/15, at 130-32.5

      In his fourth issue, Gibney asserts that the restriction in the injunction

Order that he not compete with Bengal in “paper sales and converting” is

5
  The trial court further determined that, if a breach of the Employment
Agreement by Bengal had, in fact, occurred, then Gibney had waived the
breach by failing to assert it in a timely fashion. See Trial Court Opinion,
7/23/15, at 10.

                                  -7-
J-S19044-16

limitless, overly broad, and extends beyond the intent of the restrictive

covenant included in the Employment Agreement. Brief for Appellant at 26.

Gibney asserts that this restriction should be limited to the converting

business, in which Bengal is engaged, and should not preclude Gibney from

engaging in paper sales generally. Id. at 26, 30-31. Gibney asserts that

Bengal competes with other converters in a commodity business, and that

Gibney is neither a converter nor a broker. Id. at 30. Gibney claims that

the trial court’s reasoning that paper mills and brokers compete with

converters constitutes “faulty logic,” “is unsupported by the record, and

ignores the reality of business.” Id. at 30. Gibney further asserts that the

injunction Order is unenforceable because it eliminates or represses

competition, and is not reasonably necessary to protect Bengal because

Bengal, as “a twenty million dollar company with millions of dollars of plant,

machinery and equipment[,]” needs no protection from Gibney. Id. at 30,

31.

      Additionally, Gibney claims, the only thing that Bengal established at

the injunction hearing was that Edgewood filled a $35,000 order to The

Flyer, which caused no harm to Bengal because it did not have inventory to

fill the order.   Id. at 32.   Gibney contends the business of selling a

commodity like paper depends on price and availability, not on a relationship

with a particular vendor or employee. Id. Gibney asserts that, contrary to

the trial court’s finding otherwise, the testimony at the injunction hearing

                                 -8-
J-S19044-16

established that customers reach out to numerous suppliers to locate

available product at the prevailing market price, and that “anybody will buy

from anybody.” Id. at 32-33.

      In its Opinion, the trial court addressed Gibney’s fourth claim and

concluded that it lacks merit, stating as follows:

            The business of Bengal [] is paper products for commercial
      printers and publishers. These companies have three sources for
      paper products: manufacturer or mills, brokers, and converters.
      The business [sic] of brokers and converters overlap
      considerably. Brokers sell to printers products from several
      sources, and converters sell to printers products they convert to
      meet the needs of those customers, using specialized machinery.
      Where ever [sic] the paper comes from[,] it is purchased by the
      printers and publishers to meet their particular needs. Whether
      a broker gets it from a mill, in odd lots[,] or from a converter
      does not matter to the customer. Likewise, it does not matter to
      these customers if a converter makes a paper product by
      converting some other product[,] or buys and re-sells paper
      from odd lots or a mill. Therefore, the court finds [that] brokers
      and converters are competitors.

             Bengal [] was able to find a number of documents that
      showed [] Gibney was competing with it. [] Gibney asked
      customers of Bengal to change his contact information from
      Bengal to his personal email address and telephone number, and
      then told them he was now selling paper independently. Bengal
      also offered into evidence an email in which [] Gibney
      disparaged Bengal []. After repeated denials, [Gibney] finally
      admitted he knew how Bengal formulated its prices, and, on at
      least a few occasions, admitted he undercut Bengal’s prices to its
      customers. Bengal offered evidence that [] Gibney sold paper to
      The Flyer, GreenCross, Inc., Printwell, Shweiki, Seckman,
      Angstrom, California Offset and other customers of Bengal. He
      tried to get through to other Bengal [] customers.

Trial Court Opinion, 7/23/15, at 3-4; see also id. at 10-11. Our review of

the record discloses apparently reasonable grounds for the trial court’s

                                  -9-
J-S19044-16

determination, and, having found no abuse of discretion, we affirm on the

basis of the trial court’s Opinion as to this issue. See Trial Court Opinion,

7/23/15, at 3-4, 10-11.

      In his fifth issue, Gibney contends that, to the extent that confidential

information was in jeopardy of being disclosed, the trial court’s injunction

Order sufficiently protected that information, without the need to also bar

Gibney from gainful employment. Brief for Appellant at 33. Gibney asserts

that he did not need or even use any Bengal confidential information, and

that he has no pricing information to undermine Bengal’s ability to sell. Id.

at 34. Gibney claims that he had access to all the buyers and sellers in the

industry through sources other than Bengal, and that he can work in the

paper industry without using any Bengal proprietary information.           Id.

Gibney argues that the “confidential information” that Bengal seeks to

protect is the knowledge, skill and mental ability obtained by Gibney while

working for Bengal, which is not the property of Bengal. Id.

      In its Opinion, the trial court addressed Gibney’s fifth claim and

concluded that it lacks merit, stating as follows:

             [Gibney] sold paper for Edgewood [], a paper broker and
      competitor of Bengal[], located in Yardley, Pennsylvania, within
      70 miles of Bengal[’s] place of business. [Gibney] sold to
      customers of Bengal [] through Edgewood and other companies.
      The court rejected [] Gibney’s assertions that purchasers of
      printing paper could be found through a Google® search,
      because, while that may be so, this is not how people are able to
      sell paper. Those doing the purchasing will not talk to just
      anyone, and [] Gibney was able to get through to them because
      they knew him from Bengal []. There is no dispute that [Gibney]

                                  - 10 -
J-S19044-16

      was selling to Bengal[’s] customers. It took Bengal years to
      develop these customers. [] Gibney’s claim that he was not
      competing with Bengal[,] because it [sic] and broker’s paper
      came from different sources[,] is not credible. Printing paper is
      printing paper, and what matters to printers is that the paper
      meets their needs and comes for the right price from someone
      they trust. Whether it comes from a broker[,] or converter[,] or
      directly from a mill does not matter. As far as competition goes,
      what matters is the willingness of those purchasers to speak to
      the person selling it. [] Gibney gained his entrée to them
      through his employment at Bengal [].

Trial Court Opinion, 7/23/15, at 4; see also id. at 11. Our review of the

record   discloses   apparently   reasonable   grounds   for   the    trial   court’s

determination, and, having found no abuse of discretion, we affirm on this

basis as to this issue. See Trial Court Opinion, 7/23/15, at 4, 11.

      In his final issue, Gibney contends that the trial court used the wrong

standard, and, prior to entering its injunction Order, failed to consider the

relative hardship that the injunction Order would impose on Gibney, or

Bengal’s need for protection.     Brief for Appellant at 31-32.      Gibney claims

that he has no specialized training, other than “a little more than three years

of experience in the paper industry at Bengal[,]” and that any harm that he

“could possibly cause to a multimillion dollar enterprise like Bengal, is

negligible, and was unsubstantiated by Bengal at the injunction hearing.”

Id. at 32. Gibney argues that he is irrelevant in the marketplace and that

Bengal needs no protection from him. Id. at 31. Gibney asserts that the

injunction Order renders him unemployable in his best field for two years

beyond the scope of the Employment Agreement. Id. at 32.

                                   - 11 -
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      The trial court addressed Gibney’s final issue, set forth the relevant

law, and concluded that it lacks merit. See Trial Court Opinion, 7/23/15, at

11-13. Our review of the record discloses apparently reasonable grounds for

the trial court’s determination, and, having found no abuse of discretion, we

affirm on this basis as to this issue. See id.

      Having determined that there are apparently reasonable grounds

upon which the trial court determined that equitable enforcement of the

restrictive covenants in the Employment Agreement was necessary to

protect Bengal against wrongful appropriation of its customer relationships

by Gibney, we agree with the trial court’s determination that Bengal is

entitled to injunctive relief, but modify the injunction Order, as specified

above.

      Order modified in accordance with this Memorandum, and as modified

affirmed. Jurisdiction relinquished.

      Judge Stabile joins the memorandum.

      P.J.E. Bender concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/19/2016

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                                                                                    Circulated 03/24/2016 02:12 PM

                                                            2015-09220-0014 7123,2015 12:46 PM ;; 10401582
                                                                                  Opinion
                                                            Rcpt#Z2470234 Fcc:$0.00
                                                                      Mark Levy· MontCo Prothonotary

  COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, PENNSYLVANIA
                        . CIVIL ACTION

BENGAL CONVERTING SERVICES, INC.:                   NO. 2015-09220

                     v.

RYAN GIBNEY

                                          .OPINION

DRAYER, S.J.                                                                         JULY:} ),2015

              The request of plaintiff, Bengal Converting Services, Inc., for a preliminary

injunction against its former employee, defendant Ryan Gibney, came before this court on

May 15, 2015. At the conclusion of the Hearing the court issued a preliminary injunction. Mr.

Gibney appealed to the Superior Court on May 29, 2015. This court directed him to file a

statement of errors complained of on appeal by Order dated June 4, 2015. Mr. Gibney filed that

statement on June 11, 2015. This Opinion also sets forth the court's findings of fact and

conclusions of law, in narrative form.

                                         Findings of Fact

               Ryan Gibney was first employed by Bengal Converting Services, Inc. on

February 2, 2012 as account manager. At that time the parties entered into an employment

agreement which included restrictive covenants. Later, Mr. Gibney was promoted to director of
sales, and then, on September    16, 2013 was promoted to vice president of sales, with a signifi-

cant increase in pay. On that date the parties entered into a new employment           agreement (Exhibit

P-A) that contained confidentiality,     non-competition     and other terms that will be reviewed and

discussed in the Conclusions    of Law, below. There is no dispute that this agreement was made

by the parties.   Mr. Gibney read and understood all the pertinent terms.         Mr. Gibney was

required to work fixed hours, 9 A.M. to 6 P.M., from Bengal Converting's place of business.

Bengal Converting     supplied a car, a cell phone and a computer, Mr. Gibney's "tools".           Some-

time in 2014 his pay was reduced and he was paid as an independent           contractor by a company,

Monterey Leasing, L.P ., which is an "affiliate"     of plaintiff, Bengal Converting     Services, Inc.,

within the meaning of the agreement's preamble, quoted below.            The other terms and conditions

of his employment     were unchanged,      and Mr. Gibney continued to do his job during the same

 hours and in the same manner.        He did not assert those changes were a material breach of

 contract until after he was fired.

                  Page two of the agreement contains a handwritten        notation concerning    $2 million

 in life insurance, half to "wife" and half to "SHK or Bengal".        The agreement does not state who

 was to pay for this insurance, and the court finds from the testimony and the fact that the policy

 in favor of his wife was paid for by payroll deductions from Mr. Gibney, that Bengal Converting

 complied with its part of the agreement.

                  Sometime during his employment           at Bengal Converting   Mr. Gibney was

 discharged   and re-hired, a matter not at issue here. On February 16, 2015 he was fired by the

 president of Bengal Converting, Scott H. Korn. The reason for that is not before the court, but

 there is a suggestion that Mr. Gibney was-believed          to be selling paper to Bengal customers on his

                                                       2
own. That was not proven, but there is evidence Mr. Gibney was preparing a Power Point®

presentation   for another paper company that was trying to get an account in Turkey.

                  In any event, within a matter of only four days of his discharge Mr. Gibney had a

competing enterprise up and running.     He was selling paper to Bengal Converting's      customers.

The court finds Mr. Gibney was not credible when he testified about critical disputed matters,

based on his demeanor, his incredible explanation       of how he was not competing,   and his

admission he lied to his new customer about the progress of the Power Point® presentation, just

as something he would do in business.

                  The business of Bengal Converting is paper products for commercial      printers and

publishers.    These companies   have three sources for paper products:   manufacturers   or mills,

brokers, and converters.    The business of brokers and converters overlap considerably.      Brokers

 sell to printers products from several sources, and converters sell to printers products they

 convert to meet the needs of those customers, using specialized     machinery.   Where ever the

 paper comes from it is purchased by the printers and publishers to meet their particular needs.

 Whether a broker gets it from a mill, in odd lots or from a converter does not matter to the

 customers.    Likewise, it does not matter to these customers if a converter makes a paper product

 by converting    some other product or buys and re-sells paper from odd lots or a mill. Therefore

 the court finds brokers and converters are competitors.

                   Bengal Converting   was able to find a number of documents that showed Mr.

 Gibney was competing with it. Mr. Gibney asked customers of Bengal to change his contact

 information     from Bengal to his personal email address and telephone number, and told them he

 was now selling paper independently.      Bengal also offered in evidence an email in which Mr.

                                                    3
Gibney disparaged        Bengal Converting.   After repeated denials, he finally admitted he knew how

Bengal formulated        its prices, and, on at least a few occasions, admitted he undercut Bengal's

prices to its customers.      Bengal offered evidence that Mr. Gibney sold paper to The Flyer,

GreenCross,    Inc., Printwell, Shweiki, Seckman, Angstrom, California Offset and other customers

of Bengal.    He tried to get through to other Bengal Converting customers.

                 He sold paper for Edgewood Paper, a paper broker and competitor          of Bengal

Converting,    located    in Yardley, Pennsylvania, within 70 miles of Bengal Converting's place of

business. He sold to customers of Bengal Converting through Edgewood and other companies.

The court rejected Mr. Gibney's assertions that purchasers of printing paper could be found

through a Google® search, because, while that may be so, this is not how people are able to sell

paper. Those doing the purchasing will not talk to just anyone, and Mr. Gibney was able to get

through to them because they knew him from Bengal Converting. There is no dispute he was

 selling to Bengal Converting's customers. It took Bengal years to develop these customers. Mr.
                                               '·""--·· ..

 Gibney's claim that he was not competing with Bengal Converting because it and broker's paper

 came from different sources is not credible. Printing paper is printing paper, and what matters to

 printers is that the paper meets their needs and comes for the right price from someone they trust.

 Whether it comes from a broker or a converter or directly from a mill does not matter. As far as

 competition goes, what matters is the willingness of those purchasers to speak to the person

 selling it. Mr. Gibney gained his entree to them through his employment at Bengal Converting.

                                              Conclusions of Law

                  Mr. Gibney's Statement of Errors Complained of on Appeal sets out 11 issues.

 This brings to mind the opinion of the Honorable Ruggero J. Aldisert that:

                                                             4
       "[ when [I read]] an appellant's brief that contains ten or twelve points, a presump-
       tion arises that there is no merit to any of them. I do not say it is an irrebuttable
       presumption, but it is a presumption that reduces the effectiveness of appellate
       advocacy." United States v. Hart, 693 F .2d 286, 287 (3d Cir.1982), quoted in
       Hannis Estate v. Ashland State General Hospital, 123 Pa. Cmwlth. 390, 554 A.2d
       574, 576, n. l al!ocatur denied, 524 Pa. 632, 574 A.2d 73 (1989); see also,
       Lakatosh Estate, 441 Pa. Super. 133, 656 A.2d 1378, 1380, n. 1 (1995), quoting
       the same language from Aldisert, "The Appellate Bar: Professional Competence
       and Professional Responsibility-A View From the Jaundiced Eye of One Appel-
       late Judge", 11 Cap. U. L. Rev. 445, 458 (1982).

This court will address these issues on the merits, in tum.

       Issue No. 1:    "The Court erred by enforcing the non-compete provisions in the
                       employment agreement entered on September 16, 2013 between
                       Bengal Converting Services, Inc. ('Bengal') as the employer, and
                       Ryan Gibney ('Gibney') as the employee (the 'Employment Agree-
                       ment'), whereby in the Employment Agreement Gibney was
                       deprived of his rights as an employee-at-will because after his
                       employment was terminated by Bengal, Gibney was not allowed to
                       work in his chosen field of employment for which he was skilled
                       and trained, despite the passage of almost eighteen months from
                       when Bengal terminated Gibney's employment, and thus Gibney
                       was stripped of his employment-at-will rights under common law."

                The validity of restrictive covenants in employment agreements has been long

recognized in Pennsylvania. These covenants change whatever "rights" an employee at will may

have. The employer has the right to protect by covenant its interest in customer goodwill

acquired through the efforts of its employees. Sidco Paper Company v. Aaron, 465 Pa. 586, 351

 A.2d 250, 252-253 (1976). The Supreme Court in Sidco held that restrictive covenants in an

 agreement incident to the employment relationship, reasonably limited in time and geography are

 valid. The business of the employer in Sidco was the purchase and sale of odd lots of printing

 paper. See also, Bell Fuel Corporation v. Cattolica, 375 Pa. Super. 238, 544 A.2d 450 (1988);

 Jacobson & Company v. International Environment Corp., 427 Pa. 439, 235 A.2d 612 (1967).

                There is no dispute that this agreement was incident to the employment relation-

                                                   5
ship and reasonably    limited in time and geography.       Mr. Gibney entered into an agreement that

modified his common law employment        at will rights.    Such an agreement     is valid in Pennsylva-

nia. The assertion in this issue that Mr. Gibney's      employment    terminated   18 months before his

firing is incorrect, and will be addressed under the next issue.

        Issue No. 2:     "The Court erred by enforcing the Employment Agreement for two
                         years forward from May 15, 2015, and failed to conclude that
                         Gibney's employment by Bengal was terminated by Bengal on
                         December 31, 2013 when Bengal removed Gibney from its pay-
                         roll, and thereafter Gibney was paid as a subcontractor by Monter-
                         ey Leasing LP, and issued an IRS Form 1099 for his services."

                Several provisions of the employment agreement are pertinent to this and other

issues raised. The agreement is titled "EMPLOYEE AGREEMENT AS TO CONFIDENT!-

ALITY, NON-COMPETITION AND RELATED TERMS OF EMPLOYMENT" and opens

with:

               "THIS NON-COMPETITION AND CONFIDENTIALITY AGREE-
        MENT (the 'Agreement') is made and entered into as of this 16th day of Septem-
        ber, 2014, by and among BENGAL CONVERTING SERVICES, INC. ('BCS'), a
        Pennsylvania corporation, BENGAL CONVERTING LP, BENGAL DIRECT,
        LLC and their respective shareholders, general partners, limited partners, manag-
        ing members and affiliates of all the foregoing (together with BCS, the 'Com-
        pany') and Ryan Gibney ('Employee')."

 These terms are pertinent:

         Under I, A.:

         " ... Employee shall devote his full business time and effort to the business of the
         Company."

         Under II, B.(a):

                 "The Company shall be entitled to the full protection of any and all trade
         secret and commercial confidentiality laws now or hereafter in effect without
         regard to any other provisions of this Agreement, and Employee hereby acknowl-
         edges that he is bound by all such statutory and common law duties. In addition

                                                        6
thereto, in the performance of his duties for the Company, Employee will have
access to confidential records and information, including, but not limited to,
technical, development, marketing, purchasing, organizational, strategic, finan-
cial, managerial, and administrative date or knowledge, customer and sales
information, rate schedules, rate quotations, work orders, order specification,
pending orders from customers, the names addresses, telephone numbers, credit
terms and nature of services provided to customers ... (collectively, the 'Confi-
dential Information') .... Except in the performance of his duties to the Company
or any related entity, Employee shall not knowingly, direct or indirectly for any
reason whatsoever, disclose or use any such Confidential Information ... "
[ emphasis added]

Under II, C.:

       "Covenant Not to Compete. The employee hereby agrees that, during the Term of
this Agreement and for a period of two (2) years following the termination of his
employment with the Company ... the Employee shall not, within a two hundred (200)
mile radius of any business location of the Company engage or invest in ... be employed
by, lend his name to ... render services or advice to any business that provides services
or products that compete with the business then being conducted by the Company ... "

Under II, 0.:

          "Non-Solicitation. Employee acknowledges and agrees that business
 relationships and good will that the Company has developed with customers,
 through the Company's agents and employees, are of vital importance to the
 business, operations and success of the Company, and that the Company devotes
 and has devoted substantial time and money to developing and maintaining those
 relationships. Therefore, while Employee is performing services for the Com-
 pany and for the Post-Employment Restricted Period following separation from
 service, Employee shall not directly or indirectly, for his own account or benefit
 or for the account or benefit of any other person or entity, solicit, persuade, or
  induce any person or entity which is or at any time during the 12 months prior to
  separation from service a customer of the Company or any related entity, or to
  become a customer of or enter any business relations with Employee or any other
  person or entity with which he shall become associated in any capacity with
  respect to the purchase of products or services similar or identical to, in replace-
  ment of or competitive with such products and services of the Company or any
  related entity. These non-solicitation restrictions shall apply to persons or entities
  with which Employee either had personal contact with such person or entity
  during and by reason of the employee's employment with the Company or
  supervised the individuals(s) who had responsibility for maintaining the cus-
  tomer' relationship with Company."

                                            7
       Under II. F.:

               "Non-Disparagement.      TheEmployee   hereby agrees that during the term
       of his employment with the Company, and for three (3) years thereafter, he will
       not directly or indirectly disparage the Company or disseminate ... negative
       statements regarding the Company ... nor shall Employee engage in any conduct
       or make any other statement that could reasonably expected to impair the good-
       will, or the reputation or marketing of the Company ... "

                 This alleged error can only be supported     by Mr. Gibney's    assertion that his

employment      with Bengal Converting    was terminated when he began to be paid by Monterey as

an independent    contractor.   This assertion is factually and legally incorrect.   First, the court

found that Mr. Gibney remained an employee of Bengal Converting             even though his salary was

reported on a form 1099 from Monterey.         Second, Monterey is an "affiliate"    of Bengal Convert-

ing, making it a party through the agreement's       definition of "Company".

                  Mr. Gibney focuses on the fact a form l 099 was used to report payments to him.

This is not a dispositive fact, and will not control when other factors suggest an employment

relationship.    Kurbatov v. Department of Labor and Industry, 29 A.3d 66 (Pa. Cmwlth. 2011)

(installers of installation found to be employees in spite of written contracts saying they were

contractors and the use of Forms I 099, when the employer supplied some of the materials and

fixed the hours of employment); Hartman v. Unemployment Compensation Board of Review, 39

A.3d 507 (Pa. Cmwlth.) allocaturdenied, 671 Pa. 642, 54 A.3d 350, 351 (2012) (videographer

 an employee for unemployment compensation purposes when employer supplied the video

 equipment and a uniform even though the employee was given a 1099 and could refuse projects).

                   Here, Mr. Gibney was required to work fixed hours from Bengal Converting's

 place of business. Bengal Converting supplied a car, a cell phone and a computer, al I of which

 he used to do his job. As a matter of fact and law, Mr. Gibney was an employee of Bengal

                                                       8
Converting,   Inc. until he was fired on February 16, 2015. Even if his status was changed to that

of a contractor restrictive covenants continue to be effective when an employee changes to an

independent   contractor.     Quaker City Engine Rebuilders, Inc. v. Toscano, 369 Pa. Super. 573,

535 A.2d 1083 (1987)

        Issue No. 3:        "The Court erred in enforcing the non-compete provisions in the
                            Employment Agreement beyond the scope of the restrictions
                            contained in the Employment Agreement that, among other things,
                            only limited Gibney's employment within 200 miles of Bengal's
                            business location."

                 Mr. Gibney has a point here. The order furnished by Bengal Converting did not

limit the prohibition on competition contained in its paragraph a. to 200 miles of Bengal's

business location, and it should have. This court is restricted by Pa.R.A.P. 1701 (a) from

changing its order at this time, but the Superior Court should modify paragraph a. of the order to

 add at the end of the sentence "within 200 miles of any business location of Bengal Converting."

 This does not affect the prohibition against soliciting Bengal's customers, who might be

 anywhere.

                 Mr. Gibney failed to specify what he includes "among other things" in this issue.

 Failure to include an issue in a Statement of Errors Complained of when ordered to do so

 pursuant to Pa.R.A.P. l 925(b) is a waiver of those issues. Both the trial court and the appellate

 court are impeded in the preparation of an opinion, preventing meaningful and effective

 appellate review. Commonwealth v. Lord, 553 Pa. 415, 719 A.2d 306, 308 (1998). A finding of

 waiver is required when the Statement is not filed, and is discretionary when it is filed late.

 Commonwealth v. Smith, 854 A.2d 597, 599-600 (Pa. Super. 2004). The court assumes Mr.

 Gibney is referring to other alleged error he asserts in his Statement of Errors Complained of,

                                                      9
and those are addressed elsewhere in this Opinion.

       Issue No. 4:    "The Court failed to conclude that Bengal materially breached the
                       Employment Agreement with Gibney because Bengal failed to pay
                       Gibney the compensation to which Gibney was entitled under the
                       terms of the Employment Agreement, and Bengal was thereby
                       barred from equitable relief."

               Mr. Gibney continued to work for Bengal Converting following the reduction in

salary without asserting a breach. The failure to assert a breach of contract waives that breach.

Walnut-Juniper Company v. McKee, Berger & Mansueto, Inc., 236 Pa. Super. I, 344 A.2d 549,

552 ( 1975) (en bane). Accepting a reduction in wages raises a presumption an employment

contract was changed with regard to those wages. Wagoner v. City of Philadelphia, 215 Pa. 379,

64 A. 557 (1906). Finally, paragraph IV. A. of the Agreement provides in its last sentence:

        "No breach or alleged breach of this Agreement shall limit the enforcement of the
        agreements or restrictions contained in Articles II and III of this Agreement."

        Issue No. 5:   "The trial court incorrectly concluded that Gibney engaged in
                       competition with Bengal when Gibney sold paper for Edgewood
                       Paper Company, which is not in competition to Bengal, and the
                       trial court failed to determine which business entities were compet-
                       itors of Bengal for purposes of Enforcement of the Employment
                       Agreement."

                This is a two part issue. As explained in the Findings of Fact Edgewood is a

 competitor of Bengal Converting. This is a factual finding, and the standard of review on appeal

 from a preliminary injunction is not to inquire into the merits but to examine the record only to

 determine if any apparently reasonable grounds for actions of lower court exist. Sidco Paper

 Company v. Aaron, 465 Pa. 586, 351 A.2d 250, 257 (1976).

                The court finds no authority for the proposition that a preliminary injunction

 against competition must name the customers. Not only is this a matter for enforcement, naming

                                                     10
the customers would only help the former employee compete.

        Issue No. 6:    "The trial court erred by deciding that the experience, knowledge
                        and skill obtained by Gibney as a result of his employment by
                        Bengal were trade secrets and confidential information that be-
                        longed to Bengal.and entitled to protection as Confidential Mate-
                        rial under the terms of the Employment Agreement."

                 Again, this is involves a factual finding, which is supported by the evidence.   Mr.

Gibney asserted customer information     could be found by a Google® search, but the evidence

established   Mr. Gibney would not have been able to "get in the door" without the information

and relationships   he obtained from his employment.     Sidco Paper Company v. Aaron, 465 Pa.

586, 351 A.2d 250, 257 (1976).

        Issue No. 7:     "The trial court committed an abuse of discretion by granting an
                         injunction because there was no evidence Bengal would suffer
                         immediate and irreparable harm that could not be adequately
                         compensated by damages.

         Issue No. 8:    "The trial court committed an abuse of discretion by granting an
                         injunction because there was no evidence Bengal would suffer
                         greater injury if the injunction were not granted than Gibney would
                         suffer if the injunction were granted.

         Issue No. 9:    "The trial court committed an abuse of discretion by granting an
                         injunction because Bengal failed to prove the right to relief was
                         clear, that the wrong was manifest, and that Bengal was likely to
                         prevail on the merits.

         Issue No. 10: "The trial court committed an abuse of discretion by granting an
                       injunction because Bengal failed to prove the injunction would not
                       adversely affect the public interest when Gibney was rendered
                       unable to work in his chosen field anywhere, and Gibney may
                       require public assistance to support his family which includes
                       special need dependents.

          Issue No. 11: "The trial court erred by concluding that enforcement of the re-
                        strictive covenants was reasonably necessary to protect the busi-
                        ness interests of Bengal."

                                                    l1
               These are the usual factors that must be found for a preliminary    injunction to

issue. As explained below, they are modified when breach of covenants in an employment

agreement   is sought to be enjoined.

                Mr. Gibney offered no credible evidence of his future need for public assistance,

and, as the injunction should be modified (see discussion at issued 3, above), he may sell paper

outside the 200 mile radius of Bengal Converting    ifhe does not solicit its customers where ever

they may be, or any printing or publishing company within the 200 miles. He was not prohibited

from working in his prior occupation    as a bartender, or in any other business or profession not

involving the sale of paper products to printers and publishers.   He had no specialized training

other than through his three years at Bengal Converting.    Again, this is a factual finding.   Sidco

Paper Company v. Aaron, 465 Pa. 586, 351 A.2d 250, 257 ( 1976).

                 Equity may enforce a restrictive covenant when it is incident to the employment

relationship, which it is here, when reasonably necessary to the protection of the employer, and

 reasonably limited in duration and geographic extent. Sidco Paper Company v. Aaron, 465 Pa.

 586, 351 A.2d 250 ( 1976). Where, as here, personal contact between the sales representative and

 prospective buyers is crucial to success of the business an injunction may issue without reference

 to the usual preliminary injunction factors. Jacobson & Company v. International Environment

 Corp., 427 Pa. 439, 235 A.2d 612 ( 1967). As the Supreme Court explained in Sidco Paper

 Company v. Aaron:

        "'In almost all commercial enterprises ... contact with customers or clientele is a
        particularly sensitive aspect of the business .... In most businesses ... as the size
        of the operation increases, selling-and servicing activities must be at least in part
        decentralized and entrusted to employees whose financial interest in the business
        is limited to their compensation. The employer's sole or major contact with
        buyers is through these agents and the success or failure of the firm depends in

                                                   12
      part on their effectiveness .... (t)he possibility is present that the customer will
      regard, or come to regard, the attributes of the employee as more important in his
      business dealings than any special qualities of the product or service of the
      employer, especially if the product is not greatly differentiated from others which
      are available. Thus, some customers may be persuaded, or even be very willing,
      to abandon the employer should the employee move to a competing organization
      or leave to set up a business of his own ....

       'The employer's point of view is that the company's clientele is an asset of value
       which has been acquired by virtue of effort and expenditures over a period of
       time, and which should be protected as a form of property. Certainly, the argu-
       ment goes, the employee should have no equity in the custom which the business
       had developed before he was employed. Similarly, under traditional agency
       concepts, any new business or improvement in customer relations attributable to
       him during his employment is for the sole benefit of the principal. This is what he
        is being paid to do. When he leaves the company he should no more be permitted
       to try to divert to his own benefit the product of his employment than to abscond
        with the company's cashbox.'

       Under our case law, and in view of the factors discussed by Professor Blake,
       Sidco clearly has a protectible interest in customer goodwill." 351 A.2d at 452-
       254.

                Also, Mr. Gibney agreed to equitable enforcement   of these covenants and the

facts that support it in paragraph   IV. of the Agreement:

        "IV.    INJUNCTIVE RELIEF

                A.      Employee recognizes that the agreements and restrictions contained in
        Articles II and III of this Agreement are essential to protect the business interests and
        goals of the Company and that violation of the agreements or restrictions therein will
        cause irreparable harm to the Company and its shareholders/members for which there is
        no adequate remedy at law. Employee agrees that the restrictions set forth in this
        Agreement are reasonable, proper and necessitated by legitimate business interests of the
        Company and do not constitute an unlawful or unreasonable restraint upon Employee's
        ability to earn a livelihood .... Employee further agrees that, should he violate any of
        the agreements or restrictions set forth herein, the Company shall be entitled to seek
        special, preliminary and permanent injunctive relief, as well as any other rights, remedies
        and damages to which it shall be entitled .... Both parties waive any requirement for the
        posting or securing of any bond in connection with the attainment of any such injunctive
        or other equitable relief. No breach or alleged breach of this Agreement shall limit the
        enforcement of the agreements or restrictions contained in Articles II and III of this
        Agreement."

                                                    13
                  The preliminary   injunction, as it should be modified, as explained above, was

supported by the evidence, the law and the parties' agreement.      That order should be affirmed.

Copies of this opinion served on
Juli.~~2015

By first class mail on:

Douglas T. Gould, Esquire
Gerald S. Berkowitz, Esquire

By interoffice mail on:

Court Administration - Equity/Emergency
Court Administration - Civil

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