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JUN 0 3 1997
IN THE COURT OF COMMON PLEAS
CUMBERLA:'oiD COIDiTY, PE:'oi:'oiSYLVA:'oiIA
COMPUTER RESOURCE
ASSOCIATES, INC.,
Plaintiff
v.
No. 91, ;) 9 3(. ~u4- T.u-.
TWITTY ("MICK") DAVIS, III,
Defendant
CIVIL ACTION - IN EQUITY
ORDER
AND NOW, this !t!'day of ~1'r~ ,1997, it is HEREBY ORDERED, that a
hearing on Plaintiff's Petition for Preliminary Injuction be held on the (6u..day of Jtllll4
1997, in Court Room No. ~. Cumberland County Courthouse. Carlisle. Pennsylvania at
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4. On March 21, 1994, Plaintiff CRA hired Defendant Davis as a systems
engineer at CRA's office located at 3314 Market Street, Suite 201, Camp Hill, Cumberland
County, Pennsylvania 17011.
5. As a systems engineer, Mr. Davis' job duties included computer systems
development, program tasks, and computer consultation.
6. Incident to his employment arrangement with Plaintiff CRA, Defendant Davis,
on or about March 22. 1994. signed an employment agreement, which is attached hereto,
made a part hereof, and marked Exhibit "A,"
7, Said employment agreement was execUled in Plaintifrs former Camp Hill,
Pennsylvania office, and was a written memorialization of the terms of Defendant's
employment which had been agreed upon at the time of the commencement of Defendant's
employment on March 21, 1994.
8. While the aforesaid document, Exhibit "A". speaks for itself. generally
Defendant Davis agreed:
a. not to engage in any business in competition with that of
the Plaintiff within a radius of fifty (50) miles of Plaintifrs
corporate offices for one (1) year from the termination of his
employment at CRA, and
b, not to contact or work for any customers of the Plaintiff
for one (1) year from the termination of his employment at
CRA.
On May 7, 1997, Defendant Davis gave notice of his resignation from
48895.01 6JJI97
9.
2
(50) miles of the office location of Plaintiff CRA. and because PennDOT is and has been a
client of the Plaintiff CRA.
18. Plaintiff CRA has honored all of its obligations with respect to the employment
agreement entered into between it and the Defendant.
19. The activities of Defendant Davis, which involve his acting in violation of the
covenant, Exhibit" A" hereof. will cause, and threaten to cause irreparable harm and damage
to Plaintiff CRA 0 s business and good will.
20. Plaintiff will suffer incalculable damage to its competitive position due to this
breach of contract.
21. Plaintiff CRA believes and therefore avers that Defendant Davis will continue
to engage in such improper activities unless enjoined by this Court.
22. Plaintiff CRA has no adequate remedy at law and restraint by injunction is
necessary to provide adequate relief for the irreparable harm being suffered by it.
WHEREFORE, Plaintiff CRA, needing adequate relief in equity, prays this
Honorable Court to issue a Preliminary Injunction and a Permanent Injunction as follows:
(a) That Defendant Davis be enjoined for a period of one (I) year from the date
the decree is entered. within a fifty (50) mile radius of Camp Hill.
Pennsylvania, from directly or indirectly engaging in on behalf of customers of
the Plaintiff. the same or similar services he performed for Plaintiff as systems
engineer;
That Defendant Davis be enjoined for a period of one (I) year from the date
the decree is entered from soliciting business from any customer of Plaintiff.
48895.01613/97
(b)
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J:HPLOYKENT AGREEMENT
Purpose
The pwposc oC this agreement is to define the responsibilities of Computer ~SOlll'CC
Associates. Inc., a PeMsylvania,corporadon, hCll:inaCter reCerred tD as CRA, and
Twitty "Mick" Davis, hereinaCter referred tD as Associate.
Intent
The Intent oC this agreement is to provide the specific terms, co~ii~~s. ~
protectiDns required by Associate, CRA clients, and CRA during Associate's
emplDyment with CRA.
Agreement
Associate's duties will include consulting and prognumning activities. Associate's
title will be Systems Engineer, the SlBDdard title used by CRA Cor emplDyees engaged
in these types oC duties. Specific assignments may include working at the CRA office
and/or a client site,
Associate's gross starting salaIy will be a mDnthly r.lte oC $2.666,66. Pcrl'ormance
and salary reviews are scheduled annually based on Associate's slllrting date.
In the event Associate's employmentls terminated before any loans due CRA have
been complct.cly discharged, CRA may, at its discretion, withhDId any loan balance
then remaining due and payable from. Associate's final paycheck. A loan is dermed as
any mDnies or property advanced with the intention Df being returned to CRA at a
later date; including rime off benefits advanced in excess of amounts accrued.
Available benefits arc described in the Employee Handbook Associate will receive,
Additional CRA policies and procedures an: documented in the CRA Procedures
Manual Associate will receive,
A perfOllDance review may be conducted after 90 days to assess Associate's overall
compatibility with this positiDn. Associa1e'S employment may be continued, may be
continued Dn probation, or may be t=inated.
Associate will stan work on or before March 21. 1994.
CDnfidentiality
The parties recognize and agree that Associate may engage in developing Important
material for CRA and/or its clientele. In additiDn, Associate will have access to other
imponant material relating 10 Information TechnolDgy, ilS m:ui:eting. the marketing
practices DC CRA, and the administration of the '01 pocale business of CRA. Tasks
assigned 10 Associate may provide access to confidential infonnatinn of CRA and ilS
clients. Any disclosure oC such information would be of subslllntial detriment to CRA
and is considered grounds Cor immediate terminatiDn, Associate therefore agrees not
to disclose any such information,
P, 03/04
rRA
Computer
Re~ou ree
AIIsoc:ilte::6,
Inc.
Dl4 MJrJ..t.1 $t:eer
Suite 101
C..mr1fill,PA 17Ull
Td: (71717.l7~11U
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systems engineer at CRA included compUler systems dcvclopmcnt. program lasks. and
computer consultation.
At the lime Defcndant Davis was employed by Plaintiff CRA. CRA was located in
Camp Hill Pennsylvania. Recently. on or aboul May 9. 1997. CRA relocated its
headquarters to Mechanicsburg. Pennsylvania.
On or aboul March 22, 1994, incident 10 his commencement of employment with
Plainliff CRA, Defendant Davis signed an employment agreement. The employment
agreement included a restrictive covenant which prohibits Defendant Davis from working in
any form of business that is in competition with CRA within fifty (50) miles of CRA's
corporate offices and with any previous or then existing client for a period of one (I) year
after termination of employment at CRA.
On or about May 7, 1997, Defendant Davis resigned from his position as systems
engineer at CRA. Also, on or about May 7, 1997, prior to leaving employment at CRA,
Defendant Davis was advised by representatives of Plaintiff CRA that he was expected to
abide by the restrictive covenant provisions of his employment agreement.
According to information available to Plaintiff. Defendant Davis is working as an
employee of KPMG Peat Marwick ("KPMG") in KPMG's offices located in Harrisburg,
Pennsylvania performing the same type of work he performed at CRA.Furthermore,
Defendant Davis is servicing the Pennsylvania Department of Transportation ("PennDOT"),
a client of Plaintiff CRA.
Among other services, KPMG is in the business of providing consultation and
information technology services. KPMG is a competitor of Plaintiff CRA. Because
.tlJ1j7,OI6ll97
2
Defendant Davis' actions arc a \'iolation of his agreement with CRA. Plaintiff eRA causcd
this action to be instituted.
Plaintiff CRA is asking that this compctitive covcnant bc cnforced, so Ih,1t il will be
able to retain its customer good will in the area it services. Additionally. the covenant seeks
to protect Plaintiff from the effects of competition from the Defendant resulting from his
knowledge and skills obtained while employed by Plaintiff at Plaintiff's expense, and his
knowledge of the services provided by both Plaintiff and Defendant's new employer. It is
submitted that it is clear that the protection requested is necessary for the preservation of
legitimate business relationships of Plaintiff with its customers. and that il"would not impose
an undue or unnecessary hardship on Defendant Davis as he had agreed to its terms.
II. DISCUSSION OF LEGAL AUTHORITIES
A. STANDARDS APPLICABLE TO GRANT OF A PRELIMINARY
INJUNCTION
"The purpose of a preliminary injunction is to preserve the status quo by restoring it
to the last peaceable status which preceded the alleged wrongful conduct" Records Center,
Inc. v. Comprehensive Mana~ement Inc" 363 Pa. Super. 79, 82, 525 A.2d 433, 434 (1987)
citing Alpha Tau Ome~a Fraternitv v University of Pennsvlvania, 318 Pa. Super. 293. 301,
464 A.2d 1349, 1354 (1983). The three necessary criteria for the issuance of a preliminary
injunction are: (I) That it is necessary to prevent immediate and irreparable harm which
.&!I'1'Si 016i);""
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could not be compensated by damages; (~) That greater injury would result hy refusing it
than by granting it; and (3) That it properly restores the parties to their status as existed
immediately prior to the alleged wrongful conduct. John G Bn'ant Co Inc.\' Slin~ Testin~
and Repair Inc., 471 Pa. I, 6, 369 A.~d 1164, 1167 (1977) citing Alanama Binder &
Chemical Corp v Pennsvlvania Industrial Chemical Corp.. 410 Pa. 214. 220-221. 189 A.2d
180, 184-185 (1963).
"It is not the initial breach of a covenant [not to compete] which necessarily
establishes the existence of irreparable hanri 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." John G. Bryant Co..
lIIl:..., 369 A. 2d at 1167. "The covenant seeks to prevent more than just the lost profits that
might result by the prohibited contact but also the covenant not to compete is designed to
prevent a disturbance in the relationship that has been established between the former
employer 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 the Supreme Court noted
that where a covenant of this type meets the test of reasonableness, it is prima facie
enforceable in equity." John G. BI:Yanl Co. Inc., 369 A.2d at 1167 citing Bellin~er v Carl
Berke Assoc Inc.. 455 Pa. 100, 103.314 A.2d 296, 298 (1974); See also, Jacobson & Co.
v. International Environment Corp., 427 Pa. 439. 452. 235 A.2d 612, 6~0 (1967).
"[T]he injury caused by violation of a covenant not to compete is particularly difficult
to quantify for damages purposes. The great weight of modern authority is to the effect that
~8757.01 6.-3.97
4
operated. Thus. the geographic arca of thc prohihitinn against competition in this case. fifty
(50) miles, an area in which Pl;lintiff does husiness, is clearly reasonable. Furthermore. the
prohibition against doing husiness with customers is likewise cnforceable.
To lhe exter,t Defendant Davis may takc the posilion that Plaintiff's .restrictive
covenant is overhroml becausc it prohihits Defendant Davis from taking employment with a
competitor within the fifty (50) mile radius. a review of recent case decisions involving
employce restrictivc covcnllnt agrecmcllls reveals that such a restriction or similar restrictions
hllve been found reasonable and enforcemeillthereof granted. In John G.Brvant Co.. Inc v
Slin~ Testinll. supra, II restriclive covenllnt prohibiting an employee from engaging in a
compctitive business WIIS enforccd. In Sidco Paper Co v Aaron. supra. violation of a
restrictive coven:lIl1 prohibiting the employee from engaging in the same or similar types of
businesses as thc employer \\'lIS rcstrained. In Boldt Machinery & Tools Inc v Wallace.
SlIjllil, a rcstrictive covcnalll prohibiting a formcr employee from selling items regularly sold
by his former cmployer WlIS suslllincd. In Capital Bakers. Inc. v Townsend. 426 Pa. 188,
231 A.2d 292 (1967), a restrictive covenant precluding an employee from competition with
his former cmploycr was gmnted enforcement. Finally, in Beneficial Finance Company of
Lebanon v. Becker. supr:\, a restrictive covenant agreement prohibiting a former employee
against cngllging directly or indirectly in a business competitive with Beneficial was upheld.
Given these authorities, and the requirement that the Defendant has the burden of proving the
unreasonllbleness of the restriction, it is sub milled that the restriction must be sustained. In
any evelll, the law is clear that if the Court finds the covenant to be overbroad, the Court
may modify the covenant to the extent necessary to make it reasonable. ~. Sidco Paper
UH'lJlrdlJ'
8
solelv with the Leader Nursin~ Homes and not with lllasonic of
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Elizabethloll'n. The dcfendalll thus argues th.1t th.: restrictive
covenant in this case should be applicd only to customers with
whom he, the defendant, had prior contact. This is to rely upon
a distinclion without a difference. The fact remains that Mr.
Hickey has attempted to direct to his own benefit a product of
his employment in direct compctition with his former employer.
A contractual provision which would prevent him from doing so
can hardly be considcred unreasonable.
Additionally, as noted by Justice Pomeroy, in his concurring opinion in Sidco Paper
cu.. 351 A,2d at 260, not only is an employer entitled to protection against an employee
contacting former customers, but is also eniitled to protection in competition for the
patronage of the public at large. (Citing Mor~an's Home Equipment Corp', 136 A.2d at
846).
Given the fact that Defendant Davis is working for a competitor servicing an existing
client of Plaintiff, it is submilled that Plaintiff has a clear interest in protecting itself by
reason of a restrictive covenant agreement.
A case, similar to the instant one, instructive on the propriety of the issuance of a
preliminary injunction. is Robert Clifton Assoc. Inc v. O'Connor, 338 Pa. Super. 246, 487
A.2d 947 (1985), The O'eonnor Court, 487 A.2d at 951. in upholding the granting of a
preliminary injunction granting enforcement of a restrictive covenant signed by a former
employee, the court reviewed the standards applicable to restrictive covenants and stated as
follows:
[The] appellant claims the duration, geographic scope and
activities governed by the restrictive covenant were reasonable.
In a case factually analogous to the present one, our Supreme
Court reviewed the standards to be applied to restrictive
covenants and stated as follows:
* * '"
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Pa. Super. ~88, 536 A.2d 409 (1988); and 1l11ir Dcsil!n and C','nqrllcti"n Co Inc. \'.
Kalimon, 366 Pa. Super, 194, 530 A.2d 1357 (1987).
The above authorities indicatc that the focus should be 011 thc nalllrc of the
interference with customer relationships. A fact which is extremely important in this case, is
that KPMG is a direct competitor of the Plaintiff. in some cases servicing or allempting to
service the same exact customers. To the Plaintiff's knowledge Defendant Davis is in fact
servicing one of Plaintiff's clients, PennDOT. Accordingly, the harm which is threatened to
the Plaintiff in the instant case, goes well beyond the threat that Defendant Davis may contact
former clients of his while he was employed by Plaintiff. His ability and expertise in the
service provided by Plaintiff presents as much of a threat to Plaintiff as any other factor,
especially when those services are being rendered on behalf of a competitor of the Plaintiff,
An injunction should be granted against Defendant Davis, enjoining him from working
within fifty (50) miles of Camp Hill. Pennsylvania, from directly or indirectly engaging in on
behalf of customers of the Plaintiff, the same or similar services he performed for Plaintiff.
Specifically, Mr, Davis should be enjoined from working for KPMG. or at the very least
from servicing PennDOT and other CRA clients while working for KPMG, for a period of
one (1) year from the date in which an injunction is issued.
III. CONCLUSION
Based on the above legal standards. it is sub milled that the proof which will be
elicited at the hearing in this maller, will establish the right to preliminary injunction 011
behalf of the Plaintiff.
J1l7j701 6;J,lJ7
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Derend::ult.Respondent is Dougl~ :-'!usselzr.a.'1, a.:l adult indi~ic!u:tl residing at
4SU.3 Florence :\ve:lue, Mecha."licsburg, Cumberland County, Penns)"lv!l!li3. 'ane. :JJl
e:qlerienced systems eugineer as that ter=. is used above, On or about March 26, 1991,
the parties entered into !l!l Employ:nem Agreement, where b)" Plaintiff employed
Defenc!ant ~ a systeos engineer ""ith a gr05S st:u1:ng salary of 52,566.67 per month. I
'The :!.5-eement, weich comprises less than twO pages and is written in p~ain language,
contains the following promise by the employee:
Co....enant :Sot to Compete
[Employee] agrees not to engage in any for:n of bu=:::ess
that is in competition .....ith CR-\ ""ithin 50 t:illes of CR-\'s
corporate offices er w:th any previous or then existing
client, durmg the tem of eI:lplo)"tIlent wit::. CRA and for:
year therea..=ter.
00 or about December 24, 1992, Deiendant submitted a letter of resign:1tion to
?l:!.inti::f, e!Iecti~.e "Ja."lua:;' 5, 1993, Tn: letter resulted from e:nplorment obtained by
D"I-e"'~""'. n,;." . CO..........l.t.,- .,: P1a:....;;: D~..or Cn".u1+r...C' 2 r+ was Oefoodant's
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u.:lcerstar.diog ....it1:1 Devon th:lt he wo~c. be fu...ushed b). De~'oll to P~n05ylva.n..- ..:llue
Shield, an existing client of Plaintiff a::.:l situated ....itl:..l:l a radius cf 50 :::ill;;;; of
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systems engineer at CRA included computcr systems dcvelopment. program tasks. and
computer consultation.
At the time Defendant Davis was employed by Plaintiff CRA, CRA was located in
Camp Hill Pennsylvania, Recently, on or about May 9, 1997, CRA relocated its
headquarters to Mechanicsburg, Pennsylvania,
On or about March 22, 1994, incident to his commencement of employment with
Plaintiff CRA, Defendant Davis signed an employment agreement, The employment
agreement included a restrictive covenant which prohibits Defendant Davis from working in
any form of business that is in competition with CRA within fifty (50) miles of CRA's
corporate offices and with any previous or then existing client for a period of one (I) year
after termination of employment at CRA.
On or about May 7, 1997, Defendant Davis resigned from his position as systems
engineer at CRA. Also, on or about May 7, 1997, prior to leaving employment at CRA,
Defendant Davis was advised by representatives of Plaintiff CRA that he was expected to
abide by the restrictive covenant provisions of his employment agreement,
According to information available to Plaintiff. Defendant Davis is working as an
employee of KPMG Peat Marwick ("KPMG") in KPMG's offices located in Harrisburg,
Pennsylvania performing the same type of work he performed at CRA. Furthermore,
Defendant Davis is servicing the Pennsylvania Department of Transportation ("PennDOT"),
a client of Plaintiff CRA.
Among other services, KPMG is in the business of providing consultation and
information technology services. KPMG is a competitor of Plaintiff CRA. Because
'8737016:):<17
2
Defendant Davis' actions are a violation of his agrecm~nt with eRA. Plaillliff eRA causcd
this action to be instituted.
Plaintiff CRA is asking that this compctiti\'C covcnant bc enforccd, so th;\[ it will bc
able to retain its customer good will in the area it services. Additiomllly. the covenant seeks
to protect Plaintiff from the effects of competition from the Def~ndant resulting from his
knowledge and skills obtained while employed by Plaintiff at Plaintiff's expense, and his
knowledge of the services provided by both Plaintiff and Defendant's new employer. It is
submilled that it is clear that the protection requested is necessary for the preservation of
legitimate business relationships of Plaintiff with its customers, and that it'would not impose
an undue or unnecessary hardship on Defendant Davis as he had agreed to its terms.
II. DISCUSSION OF LEGAL AUTHORITIES
A. STANDARDS APPLICABLE TO GRANT OF A PRELIMINARY
INJm;CTION
"The purpose of a preliminary injunction is to preserve the status quo by restoring it
to the last peaceable status which preceded the alleged wrongful conduct." Records Center,
Inc. v. Comprehensive Mana~emenl. Inc., 363 Pa. Super. 79, 82, 525 A.2d 433,434 (1987)
citing Alpha Tau Ome~a Fraternitv v. Universitv of P~nnsvlvania. 318 Pa. Super. 293, 301,
464 A,2d 1349, 1354 (1983), The three necessary criteria for the issuance of a preliminary
injunction are: (1) That it is necessary to prevent immediate and irreparable harm which
.,lS751 01 bl"'91
3
could not be compensated by damages; (~) That greater injury would result hy refusing it
than by granting it; and (3) That it properly restores the parties to their status as existed
immediately prior to the allcged wrongful conduct. J01m G Rrvant ('0 Inc v Slin:; Tcstin~
and Repair Inc., 471 Pa. I. 6, 369 A.2d 1164, 1167 (1977) citing Alanama Binder &
Chemical Corp. v. Pennsvlvania Industrial Chemical Corp, 410 Pa. ~14, 2~0.221, 189 A.2d
180, 184-185 (1963).
"It is not the initial breach of a covenant [not to compete] 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." John G. Bryant Co..
lIIl:..., 369 A. 2d at 1167. "The covenant seeks to prevent more than just the lost profits that
might result by the prohibited contact but also the covenant not to compete is designed to
prevent a disturbance in the relationship that has been established between the former
employer 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 the Supreme Court noted
that where a covenant of this type meets the test of reasonableness, it is prima facie
enforceable in equity." John G. Bryant Co. Inc., 369 A,2d at 1167 citing Bellin~er v. Carl
Berke Assoc.. Inc , 455 Pa. 100, 103,314 A.2d 296,298 (1974); See also. Jacohson & Co.
v International Environment Cor:p., 427 Pa. 439, 452, 235 A.2d 612, 620 (1967).
"[T]he injury caused by violation of a covenant not 10 compete is particularly difficult
to quantify for damages purposes. The great weight of modern authority is to the effect that
.I8757016i),97
4
one who has been or will be injurcd (hy violation of a covenant not to compctc) is ordinarily
entitled to the equitable remedy of injunction." Records Center. Inc., 5~5 t\,2d at 436.
citing Schwam \' ! anndrv and Lincn SlIprh' Drh'cr<, 339 Pa. 353,357, 1-1 A.2d 438, -1-10
(1940),
B. STANDARDS APPLICABLE TO ENFORCEMENT OF RESTRICTIVE
COVENANTS
The law in Pennsylvania regarding enforcement of restrictive covenants has been well
established over the years by many cases, The germinal case is Mor~an's Horne Equipment
Corp. v. Martucci, 390 Pa. 618, 136 A.2d 838 (1957). Even though that case involved a
restrictive covenant incident to sale of a business, courts have imposed the same requirements
in those cases involving an employer-employee relationship, The three requirements that
must be satisfied are:
(1) the covenant must relate to a contract for employment or sale of good
will;
(2) the covenant must be supported by adequate consideration; and
(3) the application of the covenant must be reasonably limited in both time
and territory.
Piercin~ Pa~oda. Inc. v Hoffner, 465 Pa. 500, 507, 351 A.2d 207, 210 (1976). See also,
The Wood Co Inc. v. Hickev, 40 Cumbo 511. 514 (1990) .
In this case, Plaintiff intends to show that the restrictive covenant related to Defendant
Davis' contract of employment with Plaintiff CRt\. Thus, the tirst element is satisfied. As
to the second element, Plaintiff maintains that consideration for the covenant exists.
.\K75701 6:),97
5
opcrated. Thus. the geographic arca of thc prohihition againsl compctition in this case. lifty
(50) miles, an area in which Plaintiff does business. is clearly reasonablc. Furthermore, the
prohibition against doing business with customcrs is likewise cnforceablc.
To the extent Defendant Davis may take the position that Plaintiff's restrictive
covenant is overbroad because it prohibits Defendant Davis from taking employment with a
competitor within the fifty (50) mile radius, a review of recent case decisions involving
employee restrictive covenant agreements reveals that such a restriction or similar restrictions
have been found reasonable and enforcemeiu thereof granted. In John G Brvant Co.. Inc. v
Slin~ Testin~. supra, a restrictive covenant prohibiting an employee from engaging in a
competitive business was enforced. In Sidco Paper Co v Aaron supra, violation of a
restrictive covenant prohibiting the employee from engaging in the same or similar types of
businesses as the employer was restrained. In Boldt Machinery & Tools Inc. v. Wallace.
SIIllUl, a restrictive covenant prohibiting a former employee from selling items regularly sold
by his former employer was sustained. In Capilal Bakers. Inc v. Townsend, 426 Pa. 188,
231 A.2d 292 (1967), a restrictive covenant precluding an employee from competition with
his former employer was granted enforcement. Finally, in Beneficial Finance Companv of
Lehanon v. Becker. supra, a restrictive covenant agreement prohibiting a former employee
against engaging directly or indirectly in a business competitive with Beneficial was upheld,
Given these authorities, and the requirement that the Defendant has the burden of proving the
unreasonableness of the restriction, it is submilled that the restriction must be sustained. In
any event, the law is clear that if the Court finds the covenant to be overbroad, the Court
may modify the covenant to the extent necessary to make it reasonable. ~. Sidco Paper
.1875101613:91
8
Appellants argue that lhc record I:tils to establish irrcparable
harm. Thcy notc thm appellees wcre only ablc to demonstrate:
actual damages in the amount of S4~7 in loss of commission and
argued that this meagcr amount can not possibly constitute
irreparable harm. This reasoning, howevcr, ignorcs lhc nmurc
of the violation herein involvcd. It is not the initial breach of a
covenant which necessarily establishes thc e.xistence 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,
. . .
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
unwarrante~ interference with customer relationships that is
unascertainable and not capable of being fully compensated by
money damages. It is for this reason we noted in Bellinier v.
Carl Berke Associates. Inc., 455 Pa. 100, 103, 314 A.~d 296,
298 (1974), that where a covenant of this type meets the test of
reasonableness, it is prima facie enforceable in equity. See also
Jacobson & Co. v International Environment Corp., 427 Pa.
439,452, 235 A.2d 612, 620 (1967). In Sidco. supra, [465 Pa.
586, 351 A.2d 250 (1976)], we again recognized the employer's
right to protect, by a covenant not to compete, interests in
customer relationships that have been acquired through the
efforts of the employee.
As the Rohert Clifton Assoc. Inc. supra, case indicates, it is the "threat of the
unbridled continuation of the violation and the resultant incalculable damage" which
constitutes the need for equitable relief. Accordingly, evidence relating to actual lost sales or
actual damages, is not necessary.
More recent cases affirnling preliminary injunctions issued by trial courts restraining
violations of restrictive covenants by former employees are ThermoGuard. Inc. v Cochran,
408 Pa. Super. 54, 596 A.2d 188 (1991); Modern I aundrv & Drv Cleaninw v. Farrer, 370
':8751016').97
11
Pa. Super. ~88. 536 A.2d 409 (1988): and Blair nesi~n and C'"nstrtlcth'n Co Inc.. \'.
Kalimon, 366 Pa. Super. 194, 530 A,2d 1357 (1987),
The above authorities indicate that the focus should bc on the nature of thc
interference with customer relationships. A fact which is extremely imporlant in this case, is
that KPMG is a direct competitor of the Plaintiff, in somc cases servicing or allempting to
service the same exact customers. To the Plaintiff's knowledge Defendant Davis is in fact
servicing one of Plaintiff's clients, PennDOT. Accordingly, the harm which is threatened to
the Plaintiff in the instant case, goes well beyond the threat that Defendant Davis may contact
former clients of his while he was employed by Plaintiff. His ability and expertise in the
service provided by Plaintiff presents as much of a threat to Plaintiff as any other factor,
especially when those services are being rendered on behalf of a competitor of the Plaintiff.
An injunction should be granted against Defendant Davis, enjoining him from working
within fifty (SO) miles of Camp Hill, Pennsylvania, from directly or indirectly engaging in on
behalf of customers of the Plaintiff, the same or similar services he performed for Plaintiff.
Specifically, Mr. Davis should be enjoined from working for KPMG, or at the very least
from servicing PennDOT and other CRA clients while working for KPMG, for a period of
one (1) year from the date in which an injunction is issued.
III. CONCLUSION
Based on the above legal standards, it is submilled that the proof which will be
elicited at the hearing in this maller, will establish the right to preliminary injunction on
behalf of the Plaintiff.
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to be violated the restrictive covenant agreement, and filed Plaintiff's Memorandum in
Support of Petition for Preliminary Injunction.
4, On June 5, 1997, this Court scheduled a hearing regarding the preliminary
injunction for June 18, 1997, at 1:30 p.m.
5. On June 6, 1997, counsel for Plaintiff CRA filcd Plaintiff's Motion to Expeditc
Discovcry Rcsponses.
6, On that samc datc, June 6, 1997, counscl for Plaintiff CRA served Defcndant
Davis via Overnight Delivcry with Intcrrogatories and Rcquests for Production of Documcnts
and Things. Interrogatories arc allachcd hereto as Exhibit A. Requests for Production of
Documents and Things are allached hereto as Exhibit B.
7. On June 11, 1997, via a telephone call to Judge Bayley's Chambers, counsel
for Plaintiff CRA was advised that said Motion to Expedite Discovery Responses was denied,
because the Judge required more information on the specific requcsts for discovery.
8, The discovery responses requested, now allached hereto as Exhibits A and B,
are necessary for the preparation for and facilitation of the hearing scheduled for June 18,
1997,
9.
Plaintiff CRA's discovery requests are reasonable and not overburdensome.
4K'H.1.U16J11i97
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WHEREFORE, thc Plaintiff CRA hereby prays this Honorablc Court cxpedite
discovcry by instructing Dcfendant Davis to rcspond to Plaintiff CRA's requcsts no later than
Junc 16, 1997.
Rcspcctfully submilled,
SAUL, EWING, REMICK & SAUL
Dated: Junc 11, 1997
~~~
Michael A. Finio
Christinc D. DeMichcle
I.D, No, 38872, 66293
240 North Third Strcet
Suitc 700
Harrisburg, PA 17101
(717) 257-7671
Attorncys for Computcr Resource
Associates, Inc.
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happ~ning. relationship. schem~, conf~rence. discussion. development. servic~. inslance.
incident, ev~nt, ~lC., m~ans used or occurring or rer'err~d to in the pr~paration th~rer'or~. or
in th~ course thereof, or as a consequenc~ thereof. or ref~rrin\! th~r~to.
VII. Answer hv Reference 10 Documents: If any Interrogatory is answere.d by reference to
a document or group of documents, with respect to each such Interrogatory answer, identify
(as defined in paragraph III(C) hereof) the specific document or document containing the
requested information.
VIII, "Person": The term "person" means all natural persons. corporation, partnerships or
other business associations, public authorities, municipal corporations, stale governments,
local governments, all governmental bodies, and all other legal enthies.
VIX. "You" or "Your": The terms "you" and "your" shall be deemed to ref'i.r to
Defendant, Twitty ("Mick") Davis, rrr.
X. The time period covered by these Interrogatories is that which is relevant to the issues
presented by this litigation. If Deiendant intends to submit into evidence examples from
earlier years, then this Plaintiff requests responses back to that period oi time. If Defendant
is going to rely only on recent history in presenting evidence at trial, then the responses need
only cover recent history. The purpose of these Interrogalories is not to place any unfair
burden on the Defendant. but rather the purpose is to obtain all information that will be used
at trial.
Similarly, the Defendant need only provide as many examples to suppOrt any
particular claim as it intends to use at trial. If Defendant intends to only refer to one
example at trial, he need only state one example here. If Defendant intends to introduce
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possession, custody, or control of the party to whom this Request is addressed, its of ricers,
agents. employees and allorneys, or any of them.
B. When used herein, the term "person" shall mean any individu;11. partnership,
joint venture, firm, association, corporation of business or any governmental or legal entity.
C. When used herein, the term "communication" shall mean any and all
transmissions of information, the information transmilled, the process by which the
information is transmilled and the lerm shall expressly be inclusi\'e of all wrillen and oral
communications.
D. When used herein, the term "relate to", "relating to" or "in relation to" shall
mean constiruting , reflecting, representing, supporting, contradicting. referring to, stating,
describing, recording, noting, embodying, containing, mentioning, srud}'ing, analyzing,
discussing, or evaluating. As indicated, the term necessarily includes information which is in
opposition to as well as in suPPOrt of the position(s) and claim(s) of the party to whom the
Request is addressed.
II. General Instructions
A, Whenever a request for documents is framed in the conjunctive, it shall also be
taken in the disjuncti\'e, and vice versa.
B. Whenever a request for documents is framed in the singular, it shall be taken
in the plural, and vice versa.
C. For any documents which are stored or maintained in tiles in the normal
course of business. such documents shall be produced in such tiles, or in such a manner as to
preserve and identify the file from which such documents were taken.
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D. If >'011 object 10 the production of any document on the eround, that the
anorney-client, anorney work-product or any other privilege applicable thereco. you shall,
with respect 10 lhat document;
(1)
(2)
(3)
the document:
(4)
(5)
(6)
(7)
it or a copy !hereof; and
Stale its dale;
Identify its author:
Identify each person who prepared or participated in the preparation of
Identify each person who received it;
Identify each person from whom !he document was received;
State the present location of the document and all copies thereof;
Identify each person who has ever had possession, custody or control of
(8) Provide sufficient information concerning the document and !he
circumstances thereof to explain !he claim of privilege and to permit !he adjudication of the
propriety of that claim.
E. All documents produced in response to !his Request shall be produced
ill.mm notwithstanding !he fact !hat portions thereof may contain information not requested,
shall include interim as well as final editions of a document, and shall include all editions or
copies of a document which are not idemicalto (whether due to handwrillen notation, or
revisions, or o!herwise) the original or o!her produced copy of a document.
F. This Request shall be deemed to be continuing so as to require a supplemental
answer by the person to whom this Request is directed, or such person's agents, employees.
"
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