v.
Fuchs, R.
J-A19010-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 TYCO FIRE PRODUCTS, L.P. D/B/A “TYCO IN THE SUPERIOR COURT OF FIRE PROTECTION PRODUCTS” AND PENNSYLVANIA TYCO INTERNATIONAL MANAGEMENT COMPANY, LLC,
Appellee v. RALPH M. FUCHS, Appellant No. 20 EDA 2017
Appeal from the Order Entered November 21, 2016 In the Court of Common Pleas of Montgomery County Civil Division at No(s): 2016-07384
BEFORE: BENDER, P.J.E., DUBOW, J., and MUSMANNO, J. MEMORANDUM BY BENDER, P.J.E.: FILED NOVEMBER 17, 2017
Appellant, Ralph M. Fuchs, appeals from the November 21, 2016 order which granted a petition for a preliminary injunction filed by Appellee, TYCO Fire Products, L.P., d/b/a TYCO Fire Protection Products and TYCO International Management Company, LLC (“TYCO”).1 After careful review, we affirm.
The trial court summarized the relevant facts and procedural history of this case in its Pa.R.A.P. 1925(a) opinion, as follows:
TYCO is a worldwide company which designs, manufactures and distributes chemical, water and mechanical ____________________________________________
1 An order granting a preliminary injunction is immediately appealable pursuant to Pa.R.A.P. 311(a)(4). J-A19010-17
products for the fire protection and building products businesses. [Appellant] was employed by TYCO, first as a sales manager and then as a senior sales manager, from February 27, 2006 through January 6, 2016. [Appellant’s] sales territory as a senior sales manager was the Northeast region, consisting of Pennsylvania, West Virginia, Delaware, New York, New Jersey, Maine, Massachusetts, New Hampshire, Vermont, Rhode Island and Maryland.
On February 17, 2006, prior to beginning his job at TYCO, [Appellant] signed an Employee Confidentiality Agreement and a Non-Competition Agreement (hereinafter “NCA”). The NCA contains a Confidentiality Clause … and a Non-Competition Clause[.] The Non-Competition Clause provides[:] “I agree, subject to the conditions stated, that I will not within twelve months after leaving [TYCO] employ, engage or enter into employment by, or self-employment or gainful occupations, a Competing Business or act directly or indirectly as an adviser, consultant or agent or representative for a Competing Business.” The NCA expressly provides for the entry of injunctive relief in the event of any breach of the agreement by [Appellant]. In 2015, [Appellant] signed another employment agreement which contained a non-competition restriction and provided for injunctive relief [(“2015 Agreement”)].
[Appellant] testified that he read and signed these three Agreements in connection with his employment with TYCO. He further testified that he understood that two of these Agreements contained non-compete provisions and non- solicitation provisions. He understood that the third Agreement he signed was a confidentiality agreement that provided for the protection of TYCO’s confidential information and trade secret information. [Appellant] testified at his deposition that he was provided with access to TYCO’s Salesforce Customer Relations Management Software, “which is a database of all the accounts TYCO had information about.”
In January of 2016, [Appellant] resigned from his position at TYCO and went to work at [Reliable Automatic Sprinkler Company, Inc. (“Reliable”)]. Reliable is in the same type of business and is a competitor of TYCO. After his resignation from TYCO, [Appellant] received a letter from counsel for TYCO reminding him of his legal obligations under the NCA.1 The letter also informed [Appellant] that TYCO believed that by accepting
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employment with Reliable, [Appellant] was in violation of his contract.[2] 1The evidence presented showed that both [Appellant] and Reliable were well aware of the issues raised by [Appellant’s] employment with Reliable….
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Inc. v. Richter, 587 A.2d 772 (Pa. Super. [] 1991) (upholding two-year restriction); see also John G. Bryant Co., Inc. v. Sling Testing & Repair, Inc., 369 A.2d 1164 (Pa. 1977) (upholding three-year restriction). Furthermore, the restriction’s geographical scope is the territory in which [Appellant] acted as TYCO’s sales manager immediately before leaving TYCO. This restriction is reasonable based on the nature of the work done by [Appellant] at TYCO, visiting customers in these geographic areas. The testimony shows that Reliable has five sales territories, and [Appellant] is only precluded from working in one of these territories. Accordingly, for all of the above reasons, TYCO is likely to prevail on the merits.
TYCO will suffer immediate and irreparable harm if [Appellant] is not enjoined because violating a restrictive covenant such as this clearly constitutes irreparable harm. As the Pennsylvania Supreme Court has specifically explained in [Sling Testing], 369 A.2d [at] 1167 … [,]
[i]t is not the initial breach of a covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer’s business that constitutes the justification for equitable intervention.[2] ____________________________________________
2Appellant avers that the trial court misapplied Sling Testing to the instant matter, and suggests that our Supreme Court clarified in New Castle Orthopedic Assocs. v. Burns, 392 A.2d 1383, 1387 (Pa. 1978), that it is an error for a trial court to merely presume irreparable injury from the nature of the business and the breach of the covenant. Appellant’s Brief at 20. Appellant’s conclusion ignores, however, the following portion of the Sling Testing opinion which is quoted by the New Castle Court:
The covenant seeks to prevent more than just the sales that might result by the prohibited contact but also the covenant is designed to prevent a disturbance in the relationship that has been established between appellees and their accounts through prior dealings. It is the possible consequences of this unwarranted interference with customer relationships that is unascertainable and not capable of being fully compensated by money damages. It is for this reason … that where a covenant (Footnote Continued Next Page)
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Here, TYCO has a significant interest in protecting its customer base, and in protecting the confidentiality of its business and pricing information. [Appellant] has already visited some of TYCO’s customers with Reliable employees. This could certainly lead to harm to TYCO were these customers, some of whom have become friends of [Appellant], to give business to Reliable, rather than TYCO. The facts in this case lead to the conclusion that the threat of continuous violation of the [NCA] constitutes immediate and irreparable harm to TYCO. TCO at 7-9.
In response to Appellant’s assertion that the two-year non-solicitation restriction set forth in the 2015 Agreement is broader than necessary to protect TYCO’s interests, we note that this covenant is governed by New
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