Philadelphia Dairy Products Co. v. Kleiman

36 Pa. D. & C. 643, 1939 Pa. Dist. & Cnty. Dec. LEXIS 170

This text of 36 Pa. D. & C. 643 (Philadelphia Dairy Products Co. v. Kleiman) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philadelphia Dairy Products Co. v. Kleiman, 36 Pa. D. & C. 643, 1939 Pa. Dist. & Cnty. Dec. LEXIS 170 (Pa. Super. Ct. 1939).

Opinion

Levinthal, J.,

Plaintiff corporation, engaged in the manufacture and distribution of dairy products in Philadelphia, filed its bill of complaint seeking to enjoin defendant, a former employe, from violating the provisions of a restrictive covenant contained in his written contract of employment. It is averred [644]*644that after defendant voluntarily resigned as driver-salesman for plaintiff corporation he has been soliciting his former customers for another milk company, that he has succeeded in taking away about 50 of plaintiff’s customers, and that if he continues to violate the covenant plaintiff will suffer irreparable harm.

Defendant, in his answer, admits the execution of the contract, but denies that the' route assigned to him by plaintiff corporation was composed of its own customers. On the contrary, he avers that he had his own customers when he entered plaintiff’s employ, and that the only persons whom he has solicited or to whom he has sold after the termination of his employment were those customers he had brought with him when he entered plaintiff’s employ, and such other customers as he could secure since his resignation. It is further alleged that defendant did not voluntarily resign but that he was forced to abandon his job after an altercation with his foreman. Defendant asks that the bill be dismissed because the contract of employment lacks mutuality, is hard-featured, and therefore is not specifically enforcible.

The only issue is whether the restrictive covenant contained in the employment contract is valid and enforcible by way of injunctive relief.

A preliminary injunction was granted upon injunction affidavits on August 8, 1939, surety having been entered in the sum of $1,000. After a hearing on August 16th, this decrep was continued until final disposition of the case.

Findings of fact

1. Plaintiff is a Pennsylvania corporation engaged in the manufacture and distribution of dairy products in the City of Philadelphia.

2. For three years prior to April 30, 1936, defendant had been employed as driver-salesman for Victor Dairies Company, serving approximately 170 to 180 cus[645]*645tomers in the territory in South Philadelphia bounded by Mifflin, Bigler, Second, and Eleventh Streets.

3. Defendant, for two weeks prior to April 30, 1936, and thereafter, solicited his former customers in an attempt to have them transfer their patronage to plaintiff company.

4. On or about April 30,1936, defendant was hired by plaintiff as a driver-salesman, and was paid a weekly salary from that date until August 1, 1939, when his employment was terminated.

5. On or about May 6, 1936, defendant was assigned to serve all of plaintiff’s customers in plaintiff’s route 721, whose boundaries were Sixth and Eleventh Streets, Snyder Avenue and Bigler Street.

6. On May 8,1936, defendant signed a contract of employment with plaintiff. This contract was superseded by one substantially the same on November 6, 1936, the terms of which appear in plaintiff’s bill..

(а) By this contract, the compány agreed, inter alia: (1) To employ defendant as a salesman; (2) to pay him a weekly wage and commissions in accordance with the basis established by the company for its route salesman; (3) to assign defendant a route which was to be subject to alteration by the company; (4) to supply defendant with a list of plaintiff’s customers upon said route; (5) to make available to defendant its good will upon such route, to provide a route supervisor to assist him in becoming known to the customers, and to supply material for advertising; (6) to dismiss defendant only upon one week’s notice or payment of one week’s wages except in case of fraud, disregard of duty, or breach of the agreement; (7) to permit defendant to extend credit to customers and to return unsold merchandise within such limits as the company might fix.

(б) On his part defendant agreed, inter alia: (1) To accept employment and abide by the regulations of the company; (2) not to leave the employ of the company except upon one week’s written notice; (3) to deposit [646]*646security of $150 with the company; (4) not to divulge any information concerning customers of the company turned over to or acquired by him without the consent of the company; (5) not to engage directly or indirectly for six months after the termination of his employ (or six months after the entry of a final injunction if one issued) in the sale, solicitation for sale, or distribution of dairy products in the territory or within one mile of the territory served by him while in plaintiff’s employ.

7. Route 721 was formed several days prior to May 1, 1936, and consisted of 150 customers, of whom 140 had previously been served by plaintiff’s route 728 and the remainder by plaintiff’s route 708. All of these 150 customers had been served by plaintiff for at least one month prior to May 6, 1936, and none had previously been served by defendant.

8. During the months of May, June, and July, 1936, defendant brought about 119 new customers to plaintiff. Of these, at least 20 were acquired between April 30, 1936, and July 1, 1936; the balance represented former customers of defendant whom he was able to bring with him to plaintiff company.

9. Thirty-five of these customers who transferred their patronage to plaintiff were on May 6,1936, transferred to plaintiff’s route 728 and were not subsequently served by defendant.

10. Defendant served as driver-salesman on route 721 continuously from May 6, 1936, until August 1, 1939. About a year after he had been employed the route was altered so as to include the territory bounded by Seventh and Eleventh Streets, Snyder Avenue and Bigler Street. Although some customers were taken away from defendant by this change, at least an equal number of others were added.

■ 11. In addition to paying a weekly wage, plaintiff company conducted a bonus system whereby its salesmen received additional compensation for all products sold above a fixed minimum. In this way the salesmen were paid for [647]*647all new customers acquired. Defendant was paid, during the period from April 30, 1936, to August 1, 1939, the sum of $239.50 over and above his weekly wage, for new business. The records of the company show that this constituted consideration not only for customers acquired after April 30, 1936, but also for business brought to plaintiff at the time of entering its employ.

12. On August 1, 1939, defendant voluntarily left plaintiff’s employ after an altercation with Mr. Schrager, a route foreman. Defendant has been paid all the salary due him.

13. On the day prior to defendant’s resignation only 18 of the customers obtained by defendant in the months of May, June, and July, 1936, or prior thereto, remained as plaintiff’s customers on the said route 721.

14. On or about August 5, 1939, defendant secured employment with a competitor of plaintiff. In the course of this employment defendant solicited orders within the territory covered by plaintiff’s route 721 and was able to influence at least forty customers formerly served by him to transfer their patronage to Quaker Maid Dairies. Defendant continued such solicitation until restrained by the preliminary injunction.

Discussion

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36 Pa. D. & C. 643, 1939 Pa. Dist. & Cnty. Dec. LEXIS 170, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philadelphia-dairy-products-co-v-kleiman-pactcomplphilad-1939.