AMP Inc. v. McCaughey

38 Pa. D. & C.2d 109, 1966 Pa. Dist. & Cnty. Dec. LEXIS 269
CourtPennsylvania Court of Common Pleas, Luzerne County
DecidedJanuary 14, 1966
Docketno. 8
StatusPublished

This text of 38 Pa. D. & C.2d 109 (AMP Inc. v. McCaughey) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Luzerne County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AMP Inc. v. McCaughey, 38 Pa. D. & C.2d 109, 1966 Pa. Dist. & Cnty. Dec. LEXIS 269 (Pa. Super. Ct. 1966).

Opinion

Schiffman, J.,

We presently have before us defendants’ preliminary objections to plaintiff’s complaint, as well as defendants’ motion for a protective order in regard to plaintiff’s request to take the oral depositions of defendants pursuant to Pennsylvania Rule of Civil Procedure 4012.

It is averred that plaintiff is a New Jersey corporation having its principal place of business in Harrisburg, Dauphin County, Pa. Plaintiff corporation is allegedly engaged in research; development, design and manufacture of electrical devices and equipment, and machinery for producing and assembling these devices.

The complaint further states that the individual defendants were, at -the times hereinafter enumerated, [111]*111employed by plaintiff, and that each of them, at the times specified, entered into “invention agreements” with plaintiff, copies of which are incorporated in the complaint.

It is alleged that defendant McCaughey was employed by plaintiff from “1952” until the present time, and that on March 17, 1952, he entered into the said invention agreements “at the inception of his employment and as a condition thereof”. Defendant Postupack is said to have served with plaintiff for two periods of time, from April 20,1959, until July 5, 1961, and from August 20, 1962, until February 28, 1964. He likewise is alleged to have executed “invention agreements” contemporaneously with each period of employment, to wit, April 20, 1959, and August 21, 1962, as a condition of his employment. Defendant Zoba, it is alleged, remained in the employ of plaintiff from October 13, 1958, until February 16,1965, and that he executed an “invention agreement” on October 9, 1958, at the inception of his employment and as a condition thereof.

It is further averred that contrary to the terms of these “invention agreements”, the individual defendants formed defendant corporation, and began to design devices identical or similar to devices designed for plaintiff while employed by plaintiff, or during the time proscribed by the invention agreements and “oral understanding” with plaintiff.

Plaintiff seeks to have defendants enjoined from any further activities of the complained-of nature. It requests that they be required to turn over to it any secret papers, documents, drawings, etc., in their possession. Plaintiff also seeks punitive damages, costs and attorney’s fees, as well as compensatory damages in an amount no less than $100,000.

Defendants have filed preliminary objections to the complaint in the nature of a demurrer, motion for a more specific complaint and a motion to strike.

[112]*112We shall first consider defendants’ demurrer. The demurrer, of course, admits all facts properly pleaded. See Eden Roc Country Club v. Mullhauser, 416 Pa. 61.

Defendants maintain that the complaint fails to state a cause of action because the “invention agreements” relied upon do not reveal that any consideration was given or promised by plaintiff in exchange for the agreements set forth therein. The agreements with defendants Postupack and Zoba provide that defendants obligate themselves to turn over to plaintiff any inventions growing out of that part of the business of the company with which they were associated, or which might incorporate company information acquired during the period of their employment with the company, or which invention might be conceived within two years after the termination of their employment with the company.

The agreements also recite that this obligation was assumed “In view of his employment and of prospective assignments to work on confidential matters, and of the special opportunities for advancement which may come from creative work based upon such company information and of the assumption by others of like continuing obligations”.

The complaint alleges and the incorporated agreements demonstrate that the “invention agreements” were a necessary incident to the employment of defendants Postupack and Zoba by plaintiff.

The law of this Commonwealth has indicated that the taking of employment is a sufficient consideration to support a restrictive covenant made by an employe when such covenants are ancillary to the employment relationship: Morgan’s Home Equipment Corp. v. Martucci, 390 Pa. 618.

In addition, it is to be noted that these agreements also provide that part of the consideration for the covenants with regard to inventions is the “assumption [113]*113by others of like continuing obligation”. This statement, in itself, might be sufficient to render the agreement enforceable against the defendants. However, in view of our above determination, we need not consider this aspect of the matter.

The agreement by defendant MeCaughey contains slightly different terms than the ones previously referred to. MeCaughey agreed to essentially the same restrictions with regard to any inventions he might create. The agreement executed by him expressly states, however, that it was given “in consideration of his employment” by plaintiff. This more clearly brings his situation within the rule stated in Morgan’s Home Equipment Corp. v. Martucci, supra.

In each of the above instances, the complaint recites that defendants were, in fact, employed by plaintiff company for various periods of time.

Defendants cite the Martucci case as authority for the proposition also that in order to be effective, the restrictive agreements entered into herein must have been executed at the time of the taking of employment. It is noted, in this regard, that it is alleged one of the defendants, Postupack, executed his agreement one day subsequent to the date his alleged employment began.

Zoba’s agreement was executed, it is averred, four days prior to his employment by plaintiff.

It is alleged that in each instance, these agreements were executed as a condition of employment.

The same is also claimed to be true of defendant MeCaughey. However, from a reading of the complaint the relation between the date of his employment and the execution of his agreement is not apparent, since the complaint does not state when his employment began.

The Martucci case cited by defendants as authority for the proposition that the agreement and employment must be entered into concurrently does not, in fact, [114]*114stand for that proposition. That case requires merely that the covenants be ancillary to the employment. In fact, in the Martucci case, the persons involved had been employed by plaintiff for a period of four weeks before they executed the restrictive agreements. They did not become regular employes until the agreements had been executed. As we have seen, the complaint alleges that defendants were required to sign the agreements as a condition of, and incident to, their employment. These facts are admitted for present purposes. These allegations, therefore, bring this aspect of the matter within the above-enunciated rule.

The second aspect of defendants’ demurrer is that, even if it is conceded that the “invention agreements” are supported by consideration, they cannot be enforced, because they are unreasonable restrictions upon defendants. The reason advanced in support of this argument is that they require that defendants must assign their inventions to plaintiff for two years subsequent to the termination of their employment without additional consideration.

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Related

Morgan's Home Equipment Corp. v. Martucci
136 A.2d 838 (Supreme Court of Pennsylvania, 1957)
Albee Homes, Inc. v. Caddie Homes, Inc.
207 A.2d 768 (Supreme Court of Pennsylvania, 1965)
Ebur v. Alloy Metal Wire Co.
155 A. 280 (Supreme Court of Pennsylvania, 1931)
Harbison-Walker Refractories Co. v. Stanton
75 A. 988 (Supreme Court of Pennsylvania, 1909)
Eden Roc Country Club v. Mullhauser
204 A.2d 465 (Supreme Court of Pennsylvania, 1964)

Cite This Page — Counsel Stack

Bluebook (online)
38 Pa. D. & C.2d 109, 1966 Pa. Dist. & Cnty. Dec. LEXIS 269, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amp-inc-v-mccaughey-pactcomplluzern-1966.