Fox-Morris Associates, Inc. v. Conroy

Supreme Court of Pennsylvania

Fox-Morris Associates, Inc. v. Conroy

333 A.2d 732, 460 Pa. 290, 1975 Pa. LEXIS 640

CourtSupreme Court of Pennsylvania

DecidedMarch 18, 1975

Docket16

StatusPublished

Cited by9 cases

This text of 333 A.2d 732 (Fox-Morris Associates, Inc. v. Conroy) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Fox-Morris Associates, Inc. v. Conroy, 333 A.2d 732, 460 Pa. 290, 1975 Pa. LEXIS 640 (Pa. 1975).

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OPINION OF THE COURT

O’BRIEN, Justice.

This appeal arises from the denial of a preliminary injunction which was sought to enforce a restrictive covenant in certain employee contracts.

The facts surrounding this appeal are as follows. In 1969 appellees Joseph H. Mulqueen, Jr. and Robert Conroy became employed by appellant, Fox-Morris Associates, Inc., which was in the business of executive placement. Pursuant to their employment, Conroy and Mulqueen signed employment contracts which contained the following restrictive covenant:

“. . . The parties agree that the services of the Employee are unique and extraordinary and that the Company has given Employee access to confidential and valuable information as a result of which the use by Employee of trade secrets and/or customer lists, [292]*292applications and correspondence, would cause irreparable damage to the Company. Employee does agree that during the term of his employment and for a period of eighteen (18) months thereafter he will not disclose, use or furnish to anyone other than Company any trade secrets or other confidential information concerning the Company nor during such period will he, directly or indirectly, as principal, agent, stockholder, manager, representative, employee, counselor, or in any other capacity whatever, engage in the same or any similar business to that of Company within a one hundred mile radius of any city in which Company has established an office.

“Employee acknowledges that the above restrictions placed upon him are necessary for the reasonable and proper protection of Company’s business and that in the event such restrictions become operative, he will be able to engage in other businesses for the purposes of earning a livelihood.”

From 1970 to 1973, Conroy and Mulqueen renewed their employment contracts and each contract contained the identical restrictive covenant as previously quoted. In June of 1974, Conroy and Mulqueen, while still covered by the 1973 employment contract, gave notice of their intention to resign their positions. Thereafter, Conroy and Mulqueen entered the employment of K. Robert Brian, Inc., a corporation formed by another former employee of appellant, and engaged in the same executive placement field. On July 23, 1974, appellant filed a complaint in equity seeking to enforce the restrictive employment covenants against appellees Conroy and Mulqueen and against K. Robert Brian, Inc. The chancellor took testimony and denied the preliminary injunction on the grounds that the covenant was too broad for enforcement, making it subject to modification, and thus appellant’s right to the preliminary injunction was not clear. This appeal followed.

[293]*293Initially, we must point out that since this case arises from the denial of a preliminary injunction, our scope of review is limited to whether there were reasonable grounds for the action of the court below, and we will not consider the merits of the case or pass upon 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 inapplicable. See Albee Homes, Inc. v. Caddie Homes, Inc., 417 Pa. 177, 207 A.2d 768 (1965).

Examining the record and the chancellor’s decision in light of the above, we are convinced that the chancellor reached the correct result.

The covenant in the instant case restricted appellees from engaging in a competitive business within a one-hundred-mile radius not only of their places of employment in Philadelphia, but also within a one-hundred-mile radius of any place where appellant had offices. Under these circumstances, the enforcement of the restrictive covenant and its implications are not susceptible to the drastic action of a preliminary injunction.

Decree affirmed. Appellant to bear costs.

EAGEN, J., took no part in the consideration or decision of this case. ROBERTS, J,, filed a concurring opinion.

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OPINION OF THE COURT

O’BRIEN, Justice.

This appeal arises from the denial of a preliminary injunction which was sought to enforce a restrictive covenant in certain employee contracts.

The facts surrounding this appeal are as follows. In 1969 appellees Joseph H. Mulqueen, Jr. and Robert Conroy became employed by appellant, Fox-Morris Associates, Inc., which was in the business of executive placement. Pursuant to their employment, Conroy and Mulqueen signed employment contracts which contained the following restrictive covenant:

“. . . The parties agree that the services of the Employee are unique and extraordinary and that the Company has given Employee access to confidential and valuable information as a result of which the use by Employee of trade secrets and/or customer lists, [292]*292applications and correspondence, would cause irreparable damage to the Company. Employee does agree that during the term of his employment and for a period of eighteen (18) months thereafter he will not disclose, use or furnish to anyone other than Company any trade secrets or other confidential information concerning the Company nor during such period will he, directly or indirectly, as principal, agent, stockholder, manager, representative, employee, counselor, or in any other capacity whatever, engage in the same or any similar business to that of Company within a one hundred mile radius of any city in which Company has established an office.

“Employee acknowledges that the above restrictions placed upon him are necessary for the reasonable and proper protection of Company’s business and that in the event such restrictions become operative, he will be able to engage in other businesses for the purposes of earning a livelihood.”

From 1970 to 1973, Conroy and Mulqueen renewed their employment contracts and each contract contained the identical restrictive covenant as previously quoted. In June of 1974, Conroy and Mulqueen, while still covered by the 1973 employment contract, gave notice of their intention to resign their positions. Thereafter, Conroy and Mulqueen entered the employment of K. Robert Brian, Inc., a corporation formed by another former employee of appellant, and engaged in the same executive placement field. On July 23, 1974, appellant filed a complaint in equity seeking to enforce the restrictive employment covenants against appellees Conroy and Mulqueen and against K. Robert Brian, Inc. The chancellor took testimony and denied the preliminary injunction on the grounds that the covenant was too broad for enforcement, making it subject to modification, and thus appellant’s right to the preliminary injunction was not clear. This appeal followed.

[293]*293Initially, we must point out that since this case arises from the denial of a preliminary injunction, our scope of review is limited to whether there were reasonable grounds for the action of the court below, and we will not consider the merits of the case or pass upon 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 inapplicable. See Albee Homes, Inc. v. Caddie Homes, Inc., 417 Pa. 177, 207 A.2d 768 (1965).

Examining the record and the chancellor’s decision in light of the above, we are convinced that the chancellor reached the correct result.

The covenant in the instant case restricted appellees from engaging in a competitive business within a one-hundred-mile radius not only of their places of employment in Philadelphia, but also within a one-hundred-mile radius of any place where appellant had offices. Under these circumstances, the enforcement of the restrictive covenant and its implications are not susceptible to the drastic action of a preliminary injunction.

Decree affirmed. Appellant to bear costs.

EAGEN, J., took no part in the consideration or decision of this case. ROBERTS, J,, filed a concurring opinion.

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333 A.2d 732, 460 Pa. 290, 1975 Pa. LEXIS 640, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fox-morris-associates-inc-v-conroy-pa-1975.

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