HomeMy WebLinkAbout02-3018 CIVILCUMULUS BROADCASTING, IN THE COURT OF COMMON PLEAS OF
INC., t/d/b/a WNNK, CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v. CIVIL ACTION - EQUITY
BRUCE BOND, MATTHEW
RABACK, a/k/a "STRETCH"
and CITADEL
COMMUNICATION
CORPORATIONS, t/d/b/a
CITADEL BROADCASTING
COMPANY, t/d/b/a WRKZ
102.3 FM,
Defendants NO. 02-3018 CIVIL TERM
IN RE: PLAINTIFF'S PETITION FOR EMERGENCY
PRELIMINARY INJUNCTION
BEFORE OLER, J.
OPINION and PRELIMINARY INJUNCTION
OLER, J., September 27, 2002.
In this unfortunate and difficult equity case, Plaintiff Cumulus Broadcasting, Inc.,
seeks a preliminary injunction enjoining Defendants Bruce Bond and Matthew Raback
from being employed by Defendant Citadel Communication Corporations as hosts of a
popular radio program broadcast by Defendant Citadel. Defendants Bond and Raback had
previously been employed in a similar capacity by Plaintiff Cumulus Broadcasting, Inc.,
pursuant to employment agreements that contained non-compete covenants which,
according to Plaintiff, prevented Defendants Bond and Raback from accepting
employment with Defendant Citadel. ~
A hearing on Plaintiff's petition for preliminary injunction was held on June 27,
2002, July 11-12, 2002, and August 29, 2002. For the reasons stated in this opinion, the
petition for a preliminary injunction will be granted in part and denied in part.
Pl.'s Pet. for Emergency Prelim. Inj., filed June 24, 2002.
STATEMENT OF FACTS
The evidence presented at the hearing on Plaintiff's petition demonstrated the
probability that Plaintiff will be able to establish the following facts at trial:
Plaintiff is Cumulus Broadcasting, Inc., a company that operates an FM radio
station known as WNNK-FM 104 (hereinafter WNNK) at 3400 North Sixth Street,
Harrisburg, Dauphin County, Pennsylvania. Its transmitter is located in Rye Township,
Perry County, Pennsylvania. Defendant Citadel Communications Corporation is a
company that operates an FM radio station known as WRKZ-FM 102.3 (hereinafter
WRKZ) at 1703 Walnut Bottom Road, Carlisle, Cumberland County, Pennsylvania.
Defendant Citadel's station is located within seventy-five miles of the transmitter of
Plaintiff Cumulus.2 The broadcasting industry in central Pennsylvania is highly
competitive, and the success of a station, which is based primarily on the generation of
advertising revenues, is directly related to the number of listeners to that radio station.3
Both WNNK and WRKZ target listeners in substantially the same broadcasting region,
known as the Harrisburg-Lancaster-York "Designated Market Area" (hereinafter DMA),4
which encompasses several counties, including Cumberland County, in the central
5
Pennsylvania area.
Defendant Bruce Bond is an adult individual residing at 219 Verbeke Street,
Harrisburg, Dauphin County, Pennsylvania. Defendant Matthew Raback is an adult
2 P1.'s Compl., filed June 24, 2002, paras. 1-2, 7-8, 42; N.T. 137-38, 257.
3 See P1.'s Exs. 15-16, Hr'g, June 27, 2002, July 11-12, 2002, Aug. 29, 2002 (hereinafter
P1.'s Ex. ) (revenue reports from Harrisburg-Lancaster-York DMA) (detailing
competition in area and the importance of advertising revenues); see, e.g., N.T. 448-49,
Hr'g, June 27, 2002, July 11-12, 2002, Aug. 29, 2002 (hereinafter N.T. ~. Plaintiff and
Defendant Citadel were described as companies of "about the same size" in terms of
radio station ownership and advertising revenues. N.T. 467.
4 The Harrisburg-Lancaster-York DMA is defined by a company known as Arbitron,
which "is a company [that is] accepted by both radio stations as well as advertisers as the
ratings service for radio stations in the United States." N.T. 16.
5 See N.T. 16-17.
2
individual residing at 1689 London Court, Harrisburg, Dauphin County, Pennsylvania.6
For several years prior to 2001, Defendants Bond and Raback were employed by
Plaintiff and hosted a radio program, called the "Late Afternoon Show," that was
broadcast Monday through Friday from 3:00 p.m. until 7:00 p.m. on WNNK. The "Late
Afternoon Show" consisted primarily of "discussions" and "banter" among Defendant
Bond, who was the very popular primary host, Defendant Raback, known as "Stretch" on
the air, and other co-hosts and guests.7 Ronald J. Giovanniello, the station manager of
WNNK, estimated that, over the previous five years, Plaintiff had expended over
$200,000 to promote Defendant Bond, Defendant Raback and the "Late Afternoon
Show" through "billboard advertising, newspaper and magazine advertising, [and]
television.., campaigns.''8 Further, Plaintiff included advertising and promotions for the
show throughout the day as part of its own programming that, according to Mr.
Giovanniello, "would obviously be worth millions of dollars over a five year period.''9
Studies conducted on behalf of Plaintiff while Defendants Bond and Raback were
employed with Plaintiff showed that each had the highest name recognition of any "on-
air personality" at WNNK.~°
On December 10, 2001, Defendant Bond was terminated by Plaintiff, and, several
months later, the "Late Afternoon Show" was cancelled. On June 21, 2001, Defendant
Raback resigned his position with Plaintiff. On June 24, 2002, approximately six months
after the termination of Defendant Bond and three days after the resignation of Defendant
Raback from employment with Plaintiff, a new radio program, the "Bruce Bond and
Stretch Morning Show," began broadcasting on WRKZ, which is operated by Defendant
Citadel.~ The program is hosted by Defendants Bond and Raback and, apparently,
6 N.T. 217, 254.
7 N.T. 18-19.
8 N.T. 21-22.
9 N.T. 21.
l0 N.T. 84-85.
~ N.T. 28, 115, 218, 357-59, 372-73.
3
employs the same conversational format as the previous "Late Afternoon Show,"
broadcast on WNNK. ~2
Because of the high name recognition of Defendants Bond and Raback in the
Harrisburg-Lancaster-York DMA, the "Bruce Bond and Stretch Morning Show," which,
like most "talk" shows, is very "personality driven," is likely to attract listeners, and
advertisers, to WRKZ from WNNK. ~3 Mr. Giovanniello testified that new businesses that
had advertised on WNNK in the past have begun to advertise during the "Bruce Bond
and Stretch Morning Show" on WRKZ and that he expects this trend to continue.TM
The employment agreements of Defendants Bond and Raback, and the facts
surrounding the termination of their employment with Plaintiff and the start of their new
employment with Defendant Citadel, will be discussed separately.
Defendant Bond Defendant Bond was employed by Plaintiff (or its predecessors
in interest) most recently from April 1, 1992, until December 10, 2001,~5 pursuant to a
series of employment agreements, of which the most recent was signed on December 7,
2000. Under this agreement, Defendant Bond received an salary of $80,000, subject to
annual increases of $12,500, a signing bonus of $10,000, live-appearance bonuses for
promotional events, and a "rating share bonus," which varied according to the number of
listeners to the "Late Afternoon Show.''~6
As in prior agreements executed by Defendant Bond,~7 this agreement contained
several restrictive covenants, which provided, in pertinent part, as follows:
4. Confidential Information. Except as authorized during the
performance of Employee's duties and responsibilities for Company,
Employee agrees to keep confidential and not use for Employee's personal
~2 N.T. 83-84, 448.
~3 E.g., N.T. 407-08, 493.
~4 N.T. 83-87; see also N.T. 452.
~5 He had previously been employed in the same capacity from 1983 to 1990. See N.T.
83 -87.
16 Pl.'s Ex. 13.
17 N.T. 28.
4
benefit or the benefit of any other person or entity the trade, business, and
financial secrets and confidential and propriety information of Company
and its affiliates which Employee hereby acknowledges he will obtain in
the course of his employment hereunder. Employee agrees to maintain all
such information in confidence following any termination of this
Agreement or Employee's employment. Employee agrees that this
covenant only supplements, but does not amend or modify, the confidential
information policy(ies) contained in Company's current Employee
Handbook, receipt of which is hereby acknowledged by Employee (and as
such Employee Handbook may be amended from time to time by Company
in its sole discretion). Employee affirms that Employee does not possess
and will not rely upon the protected trade secrets or confidential or
proprietary information of Employee's prior employer(s) in Employee's
work for Company.
5. Non-Competition.
a. Employee acknowledges and agrees that during the course of his
training and regular duties under this Agreement, Employee will receive
confidential and proprietary information, specialized training, expertise and
other consideration of significant material value. Employee further
acknowledges that, by virtue of Employee's employment with Company,
the general community and Company's listeners, clients and contractors
will associate Employee with Company and Company's goodwill. In
consideration of the foregoing and for and in consideration of Employee's
employment hereunder, including, without limitation, Employee's right to
receive the Severance Payments and the additional compensation described
in Exhibit C, Employee agrees that during the Employment Period and
continuing for (i) 180 calendar days after the date of termination of
Employee's employment hereunder in the event that Company terminates
Employee without Cause, or (ii) twelve months after the date of termination
of Employee's employment hereunder in the event that Employee's
employment hereunder terminates for any reason (including, without
limitation, expiration of the Employment Period), other than a termination
of Employee by Company without Cause (in either such event, the
"Noncompete Period"), he will not, directly or indirectly, be employed or
retained by, own, manage, control or be connected with and in any capacity
whatsoever, whether as an officer, director, shareholder, parmer, associate,
employee, owner, consultant or otherwise, any business that owns or
operates a radio station broadcasting within the Harrisburg-York-
Lancaster, Pennsylvania Designated Market Area (as defined by Arbitron)
(the "Noncompete Area"). Employee further agrees that during any such
period as he is in breach of this paragraph Sa, the Noncompete Period shall
automatically be extended for such period of time as he is in breach hereof.
5
Anything to the contrary herein notwithstanding, Company agrees that in
the event that (x) Company terminates Employee's employment hereunder
without Cause and (y) Employee waives in a written agreement in form and
substance satisfactory to Company (the "Severance Waiver") Employee's
right to receive any Severance Payments after the effective date of such
Severance Waiver, then Employee shall be released from the provision of
this paragraph 5a after the effective date of such Severance Waiver.
b. Employee acknowledges and agrees that during the course of his
training and regular duties under this Agreement, Employee will receive
confidential and proprietary information, specialized training, expertise and
other consideration of significant material value. Employee further
acknowledges that, by virtue of Employee's employment with Company,
the general community and Company's listeners, clients and contractors
will associate Employee with Company and Company's goodwill. In
consideration of the foregoing and for and in consideration of Employee's
employment hereunder, including, without limitation, Employee's right to
receive the Severance Payments, Employee agrees that during the
Employment Period and for one year thereafter, Employee agrees that he
will not, directly or indirectly (i) solicit, recruit or otherwise approach a
then-current Company employee for employment with a broadcast entity
which competes in any manner with Company, or (ii) influence or attempt
to influence any person or persons, firm, association, syndicate, partnership,
company, corporation or other entity that is a contracting party with
Company at any time during the Employment Period to terminate any
written or oral agreement with Company, or enter into any agreement with
any such person or entity which would have an adverse effect on Company.
c. Employee affirms that the geographic boundaries, scope of
prohibited competition, and time duration of this paragraph are reasonable
and necessary to maintain the value of the proprietary information, plans,
business methods and strategies of Company and its affiliates and to protect
the goodwill and other legitimate business interests of Company and its
affiliates. If this paragraph 5, or any portion thereof, is found by any court
having jurisdiction to be too broad in scope, whether as to activities, time
period, geographic area or otherwise, this paragraph 5 will nevertheless
remain effective but will be considered amended to the extent considered
by such court to be reasonable, and will be fully enforceable as so
amended. ~a
For purposes of termination "with Cause," the employment agreement provided, in
pertinent part, as follows:
la Pl.'s Ex. 13.
6
"Cause" means (a)a breach by Employee of this Agreement, (b)
Employee's conviction or no contest plea to a felony or crime involving
moral turpitude, or Employee's guilty plea to a lesser included offense or
crime in exchange for withdrawal of a felony indictment, felony charge by
information, or a charged crime involving moral turpitude, whether the
charge arises under the laws of the United States or any other state within
the United States, (c) Employee's dishonesty, willful misconduct, violation
of any law or regulation, or Employee's violation of any written policy of
Companyt~91 as defined in the Company's Handbook, (d) Employee's
nonperformance of Employee's duties or obligations as defined in this
Agreement, (e) Employee's act(s) or failure(s) to act in any manner which
threatens a radio station's qualification to maintain a radio broadcast license
or license to conduct its business affairs where such radio station is owned
by Company or its affiliates, (f) Employee's making of disparaging oral or
written statements regarding Company or any affiliated company and
including, without limitation, its or their officers, shareholders or
management team, provided, however, that Employee may mention
members of Company management or listeners in a satirical manner
consistent with the type of humor used in the Afternoon Show, unless
Company provides written notice to Employee to cease such actions, (g)
any judicial determination that Employee acted as a Company employee in
a tortious manner toward another employee, listener or prospective listener,
or client, (h) illegal drug or substance use or abuse on the part of Employee,
(i) Employee's entering into or causing Company or any of Company's
affiliates to enter into any agreement or obligation that binds Company or
any of Company's affiliates without express authority from an officer of
Company to enter into such agreement, or (j) Employee's ratings rank
position, defined as Monday-Friday 3pm-7pm, in any given consecutive
two (2) rating periods is//6 or lower in Adults 25-54.2°
The agreement also provided that, if Defendant Bond was terminated without cause,
"Company will pay Employee an amount equal to 180 calendar days base salary (the
"Severance Payments").''2~
With respect to remedies for breach of the contract, the agreement provided, in
pertinent part, as follows:
~9 A written directive from management was included in the agreement's definition of
"written policy." N.T. 63-64.
2o P1.'s Ex. 13.
2~ Id.
7
Company shall be entitled to equitable relief, including injunctive relief and
specific performance as against Employee, for Employee's threatened or
actual breach of paragraphs 4 or 5 of this Agreement, as money damages
for a breach thereof would be incapable of precise estimation, uncertain,
and an insufficient remedy for an actual or threatened breach of paragraphs
4 or 5.22
During the "Late Afternoon Show," Defendant Bond and others on the program
often made sarcastic comments directed at management of the station, at Cumulus
Broadcasting, Inc., and at other employees of Cumulus Broadcasting, Inc. These
comments were most critical of two employees, Tim Bums and Sue Campbell, the hosts
of the WNNK morning program -- one of the "most profitable part[s]" of the
programming schedule.23 According to Mr. Giovanniello, Defendant Bond repeatedly
engaged in "ridiculing," "bashing," and "attempting to intimidate" Mr. Bums and Ms.
Campbell.24 Both individuals complained several times to management of WNNK and
Cumulus about the attacks. According to Mr. Giovanniello, the disparaging remarks by
Defendant Bond were "killing morale" and "tearing the station apart internally.''25
In April 1998, Mr. Giovanniello issued one of several items of correspondence to
Defendant Bond in which Mr. Giovanniello notified Defendant Bond of the problems
associated with his on-air commentary about other employees.26 This memorandum
stated, in pertinent part, as follows:
As part of your job, you are expected to follow these guidelines. Violating
any of the guidelines outlined in this memo will result in probable
termination.
23 N.T. 30.
24 ~/d.
2~ See, e.g., N.T. 38-40, 44.
26 Pl.'s Ex. 1.
... You may ridicule management... [but] [t]here is to be no negative
on-air talk about any of your fellow employees.27
Defendant Bond signed the memorandum and, according to Mr. Giovanniello, agreed to
refrain from making derogatory comments about other employees.28
On February 29, 2000, Defendant Bond and his attorney were provided with a
proposal for an employment agreement, which included a statement of "rationale"
prepared by Mr. Giovanniello.29 With respect to Defendant Bond's performance with the
station, the document stated, in pertinent part, as follows:
Several issues have surfaced that have been repeatedly addressed with
[Defendant Bond]. These issues include, but are not limited to, the
following.
· Talking negatively about other station employees.
... We want to make it clear that the Company is unwilling to continue to
accept apologies for his lack of compliance on these issues. [Defendant
Bond] is a smart guy and knows the rules. All of these issues constitute
grounds for termination with cause .... Since these contract negotiations
began [Defendant Bond] has broken nearly every one of the above. The
Company will take a more aggressive approach.., in disciplining
[Defendant Bond] for failing to cooperate on these issues.3°
The employment agreement was later executed by Defendant Bond.3~
On April 4, 2000, during the "Late Afternoon Show," Defendant Bond again made
several derogatory comments about other employees, specifically Mr. Burns and Ms.
Campbell.32 On April 5, 2000, Mr. Giovanniello sent Defendant Bond an e-mail in which
Mr. Giovanniello specifically identified these references as a violation of the station's
27 Id.
28SeeP1.'sEx. 1;N.T. 31.
29 Pl.'s Ex. 6.
30 Id.
3~ See, e.g., N.T. 17-18, 22-25.
32 N.T. 33-34.
9
policy against any "negative talk" on the air about other employees.33 The e-mail stated,
in pertinent part, as follows:
I don't know what got into you yesterday after we met and before
you went on the air, but your antics about [Mr. Bums and Ms. Campbell]
are uncalled for. I don't understand what your problem is or what I need to
do to stop this .... Perhaps you don't recall my attached memo about this
subject.
I am not going to put up with this for three more years .... What
should the consequence be this time?34
The memorandum to which Mr. Giovanniello referred had been distributed to the staff of
WNNK, including Defendant Bond, on September 3, 1999, and stated, in pertinent part,
as follows:
I want to make it perfectly clear that it is my policy, and the policy
of this Company, that there be absolutely no on-air talk in any way, shape
or form, either directly or indirectly, by reference or by any other means in
a negative, derogatory or ridiculing way of another employee of this
Company. This applies to all employees, regardless of department, of
If this is in any way unclear to any of you then I suggest you see me
immediately. There will be no first offense warning. Consider this memo
fair and full notice that I will not allow the on-air antics of any single
individual(s) to derail or distract the efforts of moving.., forward.35
On April 6, 2000, in response to the on-air comments of April 4, 2000, Defendant Bond
was suspended without pay for one day.36
At another time, and following several other incidents in which Defendant Bond
made negative comments about other employees, particularly Mr. Bums and Ms.
33 Pl.'s Ex. 3.
34 Id.
35 P1.'s Ex. 2.
36 Pl.'s Ex. 4.
10
Campbell,37 Mr. Giovanniello sent Defendant Bond an e-mail that stated, in pertinent
part, as follows:
Several incidents have occured [sic] over the last few weeks that
[contradict] our understandings and go against directions that I have laid
out. The bottom line is that I have reached the end of my rope and I am
tired of looking the other way and giving you the benefit of the doubt ....
[H]ere is a brief list [of these issues].
6. Continued bashing of [Mr. Bums and Ms. Campbell.]
7. Mentioning other employees on the air (and their
children) ....
Needless to say, I'm done talking to you guys about things only to
have you do whatever you want. This attitude of we will tell him whatever
he wants to hear only to do whatever we want is over ....
... We [will] meet to discuss these issues on Tuesday morning at
10am in the conference room. If I am not convinced after this meeting that
you will live up to your word then you will not be on the air Tuesday
afternoon.
Basically, you will not go back on the air until I have your word that
you will live up to and follow the agreements YOU MADE ....
Gentlemen,... this is the final straw.38
In 2001, both Mr. Bums and Ms. Campbell sent correspondence to various
members of Cumulus management in which they reiterated their complaints about
Defendant Bond's behavior and the deleterious impact he was having on their program.39
Both requested an immediate stop to the "hurtful, insensitive, and demoralizing on air
comments aimed at co-workers," particularly in light of the effect on the morale of other
employees at the station.4°
37 N.T. 39-44.
38 P1.'s Ex. 5. The date of the e-mail does not appear of record.
39 See Pl.'s Ex. 7.
40 See id
11
On Friday, November 30, 2001, during the broadcast of the "Late Afternoon
Show," Defendant Bond quoted portions of an e-mail that referred to Mr. Burns:
By the way, you guys gotta get rid of Tim Burns!!! I actually tune into him
for a few seconds in the morning because I actually enjoy listening how bad
he can be. [What] he says on the air (I can't believe he can actually get
away with it). He makes racist or really moronic comments .... and no one
catches him on
Before reading the e-mail, Defendant Bond stated: "I feel as strongly as [the writer]
docs.''42
On Monday, December 3, 2001, in response to these comments, Defendant Bond
was suspended without psy.43 The suspension was extended "indefinitely" by e-mail
dated December 4, 2001.44 On December 10, 2001, Defendant Bond's employment was
terminated by Plaintiff.45 According to Mr. Giovanniello, the cause for the termination
was Defendant Bond's "talking on the air about fellow employees, specifically
workers, other air personalities of the radio station, and directly disobeying instructions
not to do that.''46 In an interview with a trade magazine after his termination, Defendant
Bond stated: "I was fired because I talked negatively about my fellow on-air
personalities.''47
Although Defendant Bond's employment agreement facially obligated Plaintiff to
make severance payments to Defendant Bond in the event of his termination without
48
cause, Defendant Bond did not pursue this option after his termination.49 Soon after his
4~ Pl.'s Ex. 8.
42 Pl.'s Ex. 14; see N.T. 55-57.
43 N.T. 60-62.
44 Pl.'s Ex. 10.
45 N.T. 62.
46 N.T. 28.
47 Pl.'s Ex. 22; see also Pl.'s Ex. 24.
48 Pl.'s Ex. 13.
49 N.T. 289, 527.
12
termination, Defendant Bond applied for unemployment benefits, but the claim was
challenged by Plaintiff on the ground that Defendant Bond had been fired for cause.
Accordingly, an initial denial of benefits was issued, an action from which Defendant
Bond appealed.5° However, before the date set for the hearing on the appeal, Defendant
Bond obtained employment in a television commercial, and, because of this, did not
appear at the unemployment compensation hearing. In Defendant Bond's absence, the
hearing officer found that Defendant Bond had been fired for cause and affirmed the
decision denying benefits to him on that basis.5~
Defendant Bond sought a position as an "on-air personality" with radio stations
outside the Harrisburg-Lancaster-York DMA, but was unable to gain such employment.52
On June 18, 2002, after several months of negotiations, Defendant Bond signed an
employment agreement with Defendant Citadel,53 and, on June 24, 2002, commenced his
employment as an on-air personality hosting the "Bruce Bond and Stretch Morning
Show" on WRKZ.54
Defendant Raback. Defendant Raback was employed by Plaintiff on a full-time
basis as a salesperson and on a part-time basis as a host of the "Late Afternoon Show" on
WNNK from January 4, 1999, until June 21, 2002,55 pursuant to an employment
agreement signed on January 4, 1999. Under this agreement, Defendant Raback received
commissions on the basis of his net advertising sales, $10.00 per hour, subject to annual
increases, for his "on-air announcing work," live-appearance bonuses for promotional
50 N.T. 516-18.
51N.T. 516-19.
52 E.g., N.T. 502.
53 No testimony was offered regarding the salary that Defendant Bond receives under the
employment agreement with Defendant Citadel.
54 N.T. 218.
55 Defendant Raback had been employed by Plaintiff for several years before 1999 on a
part-time basis as co-host of the "Late Afternoon Show." N.T. 357-58.
13
events, and a "rating share bonus," which varied according to the number of listeners to
the "Late Afternoon Show.''56
The employment contract between Plaintiff and Defendant Raback included the
following provisions:
[9.] Loyal_ty and Non-disclosure. During the term of this Agreement, the
Employee shall not be interested or participate, directly or indirectly, in any
business similar to the Company's business. In addition, the Employee
acknowledges that the format, methods, processes, and operations of the
Company are unique and confidential and are necessary to the continued
successful operation of the Company's business. The Employee shall not at
any time or in any manner, directly or indirectly, disclose any information
concerning the business of the Company and any confidential or proprietary
information concerning the format, methods, processes or operations
utilized by the Company, including without limitation, information
concerning customers, prices and agreements, nor use such information for
private gain or the benefit of any other person, firm or entity, either during
the terms of this Agreement or thereafter.
[10.] Covenant Not To Compete. Beginning with the date of this
Agreement, and ending six (6) months subsequent to the termination of
employment provided herein, irrespective of the time, manner or cause or
[sic] termination, the Employee does hereby agree and covenant that he or
she shall not, under any circumstances, directly or indirectly, accept
employment involving any duties similar to those to be performed under
the Agreement, for any person, firm or entity operating a radio station,
television station or cable system within a seventy-five (75) mile radius of
the Company's main transmitter site.
In the event that the Employee does not find a career in radio sales
rewarding, either financially or personally, and chooses to resign his sales
position, the Company shall release the Employee from the programming
aspect of the non-compete clause; however, the sales aspect of the non-
compete shall remain in effect. Likewise, if the Company terminates the
Employee from his sales position regardless of reason, the Company will
also release the Employee from the programming aspect of the non-
compete, however the sales aspect shall remain in effect. These are the
only two (2) exceptions to the non-compete clause of this Agreement.
Should the Employee choose to resign his sales position due to his
dissatifaction [sic] of a sales career, the Employee agrees to give the
Company the first opportunity to offer the Employee a full-time
56 PI.'s Ex. 18.
14
programming position and hereby agrees to enter into a good faith
negioting [sic] session with the Company regarding said programming
position.57
With respect to remedies for breach of the contract, the agreement included the
following provision:
Injunctive Relief. The Employee agrees that the rights granted to the
Employee hereunder are of special, unique, unusual, extraordinary,
intellectual character which gives them a peculiar value, the loss of which
cannot be adequately or reasonably compensated in damages in an action at
law, and that the Employee's failure to perform his or her obligations
hereunder will cause the Company irreparable injury or damage.58
For several months after the termination of Defendant Bond by Plaintiff,
Defendant Raback continued without Defendant Bond as host of the "Late Afternoon
Show." However, Mr. Giovanniello testified that, without Defendant Bond's
involvement, the program "wasn't received by the audience well," and, on March 20,
59
2002, Plaintiff cancelled the program.
After the cancellation, that part of Defendant Raback's employment involving on-
air broadcasting was eliminated, and, thereafter, Defendant Raback was employed solely
as a salesperson for Plaintiff. Plaintiff provided Defendant Raback with several
established sales accounts, which added to his net advertising sales and, concomitantly, to
his income from commissions, in order to mitigate the loss of income that resulted from
the elimination of his broadcasting position.®
Although Defendant Raback continued his employment as a salesperson with
WNNK for several months after the cancellation of the "Late Afternoon Show," he
testified that he was "not happy" and that he had told station management that he wanted
to return to an on-air position.6~ According to Defendant Raback, Mr. Giovanniello and
57 Id.
58 ]d.
59 N.T. 115, 357-59; see also infra note 74.
60 N.T. 123,269.
61 N.T. 367-69.
15
other members of Cumulus management foreclosed the possibility of future on-air
employment with Plaintiff:
It was very clear to me in February and in March [2002, after the
cancellation of the "Late Afternoon Show,"] that there was no on-air
position. [Mr. Giovanniello] had told me there is no place for you on
WINK 104 anymore. You don't fit into the new format.
·.. [At the end of March 2002,] I went to [Mr. Giovanniello and another
member of Cumulus management] and said, hey, is there a possibility for
me on this station? And neither one of them said anything about it. So it
was made very clear to me that there was no place for me on the air and
full-time sales is where I was going to be stuck.62
Starting in approximately May 2002, Defendant Raback engaged in discussions
with representatives of Defendant Citadel regarding the possibility of employment with
WRKZ as co-host of a program with Defendant Bond. On Wednesday, June 18, 2002,
while he was still employed under the agreement with Plaintiff, Defendant Raback signed
an employment agreement with Defendant Citadel. The new employment agreement had
an effective date of Monday, June 24, 2002.63
On Friday, June 21, 2002, Defendant Raback submitted a letter of resignation to
Mr. Giovanniello. After Mr. Giovanniello brought up the non-compete provisions
contained in Defendant Raback's employment agreement, and the requirement that
Defendant Raback engage in a good-faith negotiation with Plaintiff before accepting
employment at another station, Defendant Raback asked: "[A]re you offering me a full-
time on-air position right now?''64 Mr. Giovanniello said that a position was potentially
open on another station in the Harrisburg-Lancaster-York DMA, HOT 92, which was
also owned by Plaintiff, but that he would have to discuss the possibility with other
62 N.T. 433-34.
63 N.T. 264-67, 254-61.
64 N.T. 264-68, 371.
16
members of management.6s However, Defendant Raback was not interested in a position
on HOT 92, which had a different musical and broadcasting format than VqNNK.66
On Monday, June 24, 2002, pursuant to the employment agreement between
Defendant Raback and Defendant Citadel, Defendant Raback commenced his
employment as co-host of the "Bruce Bond and Stretch Morning Show" on WRKZ. In
accordance with the limitations of his employment agreement, Defendant Raback is not
involved in any sales or marketing work for Defendant Citadel.67
Counsel in this case have submitted excellent briefs on behalf of the parties.
DISCUSSION
Statement of Law
Preliminary Injunction. In order to establish a right to injunctive relief, the
moving party must satisfy five "essential prerequisites." John G. Bryant Co. v. Sling
Testing & Repair, Inc., 471 Pa. 1, 6-7, 369 A.2d 1164, 1166-67 (1977). First, the
injunction must be "necessary to prevent immediate and irreparable harm which could
not be compensated by damages." Second, the injunction must have the effect of
restoring the parties to the status quo "as it existed immediately prior to the alleged
wrongful conduct." Third, the requested injunction must be "reasonably suited" to the
abatement of the objectionable activity. Fourth, the moving party's right to relief must be
"clear" and the wrong must be "manifest." Fifth, the injunction must be required to avoid
a comparably greater injury than that which would result by a refusal to grant it. Id
65 N.T. 364-68, 371; see a/so N.T. 433-34 (discussing previous conversations between
Defendant Raback and Mr. Giovanniello in which the latter suggested that no openings
were available on other radio stations owned by Plaintiff). Mr. Giovanniello also testified
that, at the time at which the "Late Afternoon Show" had been cancelled, he had
proposed that he and Defendant Raback could "discuss a possible role of using him on
The [WNNK] Morning Show" when Mr. Burns, who was then a co-host of the program,
retired on June 21, 2002. N.T. 123.
66 N.T. 370-71; see also N.T. 433-34 (discussing previous conversations between
Defendant Raback and Mr. Giovanniello in which the latter suggested that no openings
were available on other radio stations owned by Plaintiff).
67 N.T. 372-73,412-21.
17
(quotingAlbee Homes, Inc. v. Caddie Homes, Inc., 417 Pa. 177, 181, 207 A.2d 768, 770
(1965)).68 The "purpose [of a preliminary injunction] is to preserve the status quo.., by
restoring the last peaceable, noncontested status which preceded the controversy." Soja v.
Factoryville Sportsmen's Club, 361 Pa. Super. 473,477, 522 A.2d 1129, 1131 (1987).
With respect to the requirement of "immediate and irreparable harm," courts have
consistently found that such harm may be established by evidence that the moving party
will suffer a competitive disadvantage if the objectionable activity is permitted to
continue. E.g., 144. Penn Specialty MSO, Inc. v. Nolan, 737 A.2d 295, 299 (Pa. Super. Ct.
1999). Even if the immediate effect of a refusal to issue an injunction would be merely
slight monetary losses, irreparable harm is established if "the plaintiff's proof of
injury.., foreshadows the disruption of established business relations which would result
in incalculable damage." Id. (quoting New Castle Orthopedic Assocs. v. Burns, 481 Pa.
460, 466, 392 A.2d 1383, 1386 (1978)). In other words, "[i]t is not the initial breach...
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."
Bryant, 471 Pa. at 7, 369 A.2d at 1167.
With respect to the requirement that the moving party's right to relief be "clear,"
the party seeking the preliminary injunction is not required to produce "absolute" proof to
demonstrate a right to injunctive relief. Rather, in recognition of the expedited and
temporary nature of the relief, the party must offer only sufficient evidence to show a
"reasonable likelihood of success on the merits." Citadel Broad. Co. v. Gratz, 52 Pa. D.
& C.4th 534, 543-44 (Lackawanna 2001) (citing Sheridan Broad. Networks, Inc. v. NBN
Broad., Inc., 693 A.2d 989, 992 (Pa. Super. Ct. 1997)).
With respect to the requirement that the entry of the preliminary injunction be
required to avoid a comparably greater injury, it has been stated that the court should not
engage in a "balancing of convenience." Pa. R.R. Co. v. Driscoll, 330 Pa. 97, 101, 198 A.
68 It should be noted that the order in which these prerequisites appear differs from that
provided inBryant. Cf. Bryant, 471 Pa. at 7, 369 A.2d at 1167.
18
130, 133 (1938). However, in such cases, it is proper for the trial court, in its discretion,
to assess and to balance the hardships that each side would potentially suffer from the
entry of the preliminary injunction to determine whether equitable intervention is
warranted. See Cappiello v. Duca, 449 Pa. Super. 100, 109, 672 A.2d 1373, 1378 (1996).
A preliminary injunction generally may issue only if:
(1) the plaintiff files a bond in an amount fixed and with security
approved by the court, naming the Commonwealth as obligee, conditioned
that if the injunction is dissolved because improperly granted or for failure
to hold a hearing, the plaintiff shall pay to any person injured all damages
sustained by reason of granting the injunction and all legally taxable costs
and fees, or
(2) the plaintiff deposits with the prothonotary legal tender of the United
States in an amount fixed by the court to be held by the prothonotary upon
the same condition as provided for the injunction bond.
Pa. R.C.P. 153 l(b). Although the amount of the bond should presumptively be set at a
level sufficient to cover those damages that are "reasonably foreseeable" as resulting
from the injunction, the trial court is required to balance the equities involved in the case
to arrive at the appropriate bond amount. Christo v. Tuscany, Inc., 368 Pa. Super. 9, 20-
21,533 A.2d 461,467 (1987).
Covenant Not To Compete. Post-employment covenants not to compete are
enforceable if they meet three requirements. Bryant, 471 Pa. at 9-10, 369 A.2d at 1168.
First, the covenant must be "ancillary to" or "incident to an employment relation."
Second, the restrictions contained in the covenant must be "reasonably necessary for the
protection of the employer." Third, the restrictions must be "reasonably limited in
duration and geographic extent." Id. Where unreasonableness of a covenant not to
compete is at issue, the burden is on the party asserting such unreasonableness to
demonstrate it. Id. at 12, 369 A.2d at 1169.
Under the "ancillary" requirement, the execution of the covenant not to compete
must occur contemporaneously with either the employment agreement itself or an
exchange of additional consideration from employer to employee. Records Ctr. v.
Comprehensive Mgmt., Inc., 363 Pa. Super. 79, 84-85, 525 A.2d 433, 435 (1987).
19
Generally, "the taking of employment is [considered] sufficient consideration for a
covenant not to compete." Id. at 84, 525 A.2d at 435.
Under the requirement that the restrictions be "necessary for the protection of the
employer," enforcement of a post-employment covenant must be both reasonable in light
of the circumstances of termination and intended to further a legitimate and protectable
interest. Reasonableness must be determined on a "case-by-case basis" and requires a
"searching inquiry of all the circumstances surrounding enforcement of the covenant,"
including, inter alia, "the reason for the termination of the employment relationship."
Insulation Corp. of Am. v. Brobston, 446 Pa. Super. 520, 532 & n.6, 534 n.8, 667 A.2d
729, 735 & nn.6, 8 (1995). Generally, if an employee has resigned voluntarily,
enforcement of the covenants is considered to be presumptively reasonable; however, if
the employee was terminated by the employer, enforcement is considered reasonable only
if the reason for the termination was not on "economic" grounds or grounds that the
employee "failed to promote the employer's legitimate business interests." Id at 532 &
n.6, 667 A.2d at 735 & n.6. In other words, "where an employer terminated an employee
for reasons beyond the employee's control," injunctive relief generally is barred because
enforcement of the covenant would be unreasonable. All-Pale, Inc. v. Johnston, 694 A.2d
347, 352 (Pa. Super. Ct. 1997) (citing Insulation Corp. of Am., 446 Pa. Super. 520, 667
A.2d 729).
With respect to the legitimacy of the interests the employer seeks to protect, a
primary consideration is the investment of the employer in promoting the employee for
the benefit of the employer. See, e.g., W. Penn Specialty, 737 A.2d at 299-300; see also
Bryant, 471 Pa. at 8-10, 369 A.2d at 1167-68. Although the employer cannot limit the
employee from marketing the skills and knowledge that the employee developed during
employment, the employer does have a protectable interest in the "reputation" that had
been built for the employee by the former employer. W. Penn Specialty, 737 A.2d at 299-
300; see also Bryant, 471 Pa. at 8-10, 369 A.2d at 1167-68. Specifically, several courts
have recognized that the promotion of "on-air personalities" constitutes a protectable
interest and that employers may limit the ability of such individuals to market themselves
20
to other broadcasters, particularly when the individual seeks to use the same "on-air
name" that had been promoted by the former employer. See Midwest Television, Inc. v.
OlofJg'on, 699 N.E.2d 230, 233-35 (Ill. App. Ct. 1998) (finding that twelve-month
restriction on regional employment in broadcast industry as applied to radio "on-air
personality" was reasonable because of considerable investment in promotion and
advertising of employee by employer); see also T.K. Communications, Inc. v. Herman,
505 So. 2d 484, 486 (Fla. Dist. Ct. App. 1987); Beckman v. Cox Broad Corp., 296
S.E.2d 566, 568-69 (Ga. 1982); cf Courier Times, Inc. v. United Feature Syndicate, 300
Pa. Super. 40, 56, 445 A.2d 1288, 1296 (1982) (affirming finding of irreparable harm
upon syndicate's cancellation of newspaper's subscription to popular comic strip because
absence of feature would place paper at competitive disadvantage in attracting new
customers), cited with approval in W. Penn Specialty, 737 A.2d at 299.
Under the requirement that the restrictions be both temporally and geographically
reasonable, "[g]eneral covenants are reasonably limited if they are 'within such territory
and during such time as may be reasonably necessary for the protection of the
employer.., without imposing undue hardship on the employee.'" Jacobson & Co., Inc.
v. Int'l Env 't Corp., 427 Pa. 439, 452, 235 A.2d 612, 620 (1967) (quoting Restatement of
Contracts § 516(t) (1932)). "What limits as to activity, geographical area, and time are
appropriate in a particular case depends upon all the circumstances." Restatement
(Second) of Contracts § 188 cmt. d (1981). The reasonableness of the temporal and
geographic aspects of a restrictive covenant must be determined in light of the nature of
the employer's interest sought to be protected. N. Am. Publ. Co. v. Bishop, 15 Phila. 448,
455 (1987) (citing Boldt Mach. & Tool,', Inc. v. Wallace, 469 Pa. 504, 366 A.2d 902
(1976)). With respect to the temporal aspect of a covenant not to compete incident to an
employment relationship, "restraints of [a five-year] duration have been upheld in a wide
variety of situations." Boldt Mach. & Tool,', Inc., 469 Pa. at 515, 366 A.2d at 908. With
respect to the geographic aspect of a covenant not to compete, "[t]he principle of
customer-contact protection finds its expression in the general rule that the territorial
restraint in a covenant not to compete will, generally speaking, be considered reasonable
21
if the area covered by the restraint is limited to the territory in which the employee was
able, during the term of his employment, to establish contact with his employer's
customers." C.T. Drechsler, Annotation, Enforceability of Restrictive Covenant, Ancillary
to Employment Contact, as Affected by Territorial Extent of Restriction, 43 A.L.R.2d 94,
162 (1955). In appropriate circumstances, a covenant encompassing the area of an entire
country may be upheld. See, e.g., Plunkett Chem. Co. v. Reeve, 373 Pa. 513, 95 A.2d 925
(1953) (upholding restriction encompassing United States).
Application of Law to Facts
In the present case, the court is constrained to conclude that the prerequisites for
issuance of a preliminary injunction enjoining Defendant Bond from continuing his
current employment have been met. However, in the court's view, Plaintiff has failed to
sustain its burden to warrant a preliminary injunction against Defendant Raback.
With respect to the first prerequisite for the issuance of a preliminary injunction,
the court is of the view that the harm occasioned to Plaintiff by the alleged breaches by
Defendants Bond and Raback of their restrictive covenants is immediate and irreparable,
as those terms are understood in this area of the law. According to the evidence presented
at the hearing on Plaintiff's petition, the radio industry is very competitive and, in the
field of "talk" programs, such as the shows hosted by Defendants Bond and Raback, very
"personality driven." As such, Defendants Bond and Raback, who are well recognized
and have a large audience in the Harrisburg-Lancaster-York DMA, pose a threat to
WNNK in terms of a loss of listeners and advertisers, which create the bulk of revenues
for WNNK. Although at the time of the hearing on the petition only a few companies that
had previously advertised on the "Late Afternoon Show" on WNNK had begun to
advertise on the "Bruce Bond and Stretch Morning Show" on WRKZ, the court is of the
view that the "unbridled continuation of the violation" of the covenants would potentially
cause a continuing erosion of Plaintiff's market share and a corresponding drop in
Plaintiff's advertising revenues. In the court's view, the overall losses that may result are
22
"incalculable," and, thus, the potential damages in this case constitute an "immediate and
irreparable harm.''69 Bryant, 471 Pa. at 7, 369 A.2d at 1167.
With respect to the second and third prerequisites for the issuance of a preliminary
injunction, the court is of the view that specific enforcement of the covenants in this case
would have the effect of restoring the parties to the status quo "as it existed immediately
prior to the alleged wrongful conduct" and that enforcement is "reasonably suited" to the
abatement of the objectionable activity. Plaintiff seeks to enjoin Defendants Bond and
Raback from continuing their current employment with Defendant Citadel. If this relief
should be granted, all parties would be in the same position that they held prior to
Defendants Bond and Raback accepting employment as on-air personalities with WRKZ,
and the activity to which Plaintiff objects, the broadcast of the "Bruce Bond and Stretch
Morning Show," would effectively be enjoined.
69 In their brief, Defendants suggest that Merrier-Toledo, Inc. v. Acker, 908 F. Supp. 240
(M.D. Pa. 1995), in which a federal district court refused to issue a preliminary injunction
to enforce a non-compete provision, is analogous to the present case and represents
persuasive authority. However, Merrier-Toledo involved a company "in the business of
selling and servicing state-of-the-art technology precision balances, instruments and
systems" that was attempting to limit the activities of a former employee, who was
allegedly, as part of the employee's new business, soliciting customers with whom the
employee had worked while in the company's employ. Id. at 242-44. Arguably in dicta,
the district court stated that, because the employee had been the company's only
representative in the limited area in which the employee now solicited customers, the
"damages [that may accrue during the pendency of this action] can be readily ascertained
by reviewing the customer lists and receivables" of the employer's company and
employee's new business. Id. at 245, 248. Therefore, according to the court, the harm was
not proven to be incalculable. Id. at 248. In this case, however, the effects of the violation
are not so easy to measure. Rather than dealing with a distinct and identifiable group of
customers, Plaintiff and Defendant Citadel compete for a undefined and continuously
changing segment of the population who listen to the radio. Although ratings measures
exist, these cannot gauge, to the extent that could be accomplished in Merrier-Toledo, the
number of WNNK listeners who may, during the pendency of this action, discover the
"Bruce Bond and Stretch Morning Show," begin to listen to it, and, eventually, abandon
WNNK in favor of WRKZ. Even if it were controlling authority, the court is of the
opinion that Merrier-Toledo represents a factual situation that is easily distinguishable
from the one presented in this case.
23
With respect to the fourth prerequisite for the issuance of a preliminary injunction,
the court is of the view that Plaintiff has presented sufficient evidence to show a
likelihood of success on its claims (1) that the restrictive covenants at issue here
represented reasonable and enforceable provisions ancillary to the employment
agreements and (2) that the restrictive covenants limited Defendants Bond from accepting
his current employment with Defendant Citadel.
First, the court is of the opinion, based on the evidence presented thus far, that the
provisions likely represented enforceable restrictions. With respect to the "ancillary"
requirement, in this case the restrictive covenants were executed contemporaneously with
the employment agreement. Because the taking of employment is generally considered
sufficient consideration for such covenants, the restrictions were likely ancillary to the
employment.
With respect to the requirement that the restrictions be necessary for the protection
of the employer, on the basis of the evidence presented at this stage, it appears, at least
preliminarily, that the covenants are reasonable in light of the circumstances of
termination and were intended to further a legitimate and protectable interest of Plaintiff.
Although Defendant Bond was terminated by Plaintiff, a circumstance that may militate
against a finding of reasonableness, this situation may be distinguished from cases in
which the employer terminated the employee for economic reasons or because the
employee "failed to promote the employer's legitimate business interests," when the
employer has effectively deemed the employee "worthless" and enforcement of the
covenant would not be reasonable. Insulation Corp. of Am., 446 Pa. Super. at 532, 667
A.2d at 735. In the present case, Plaintiff, in the person of Mr. Giovanniello, repeatedly
acknowledged during his testimony that Defendants Bond and Raback were among the
most "recognized personalit[ies]" among Plaintiff's employees and that this recognition
translated into increased ratings and higher advertising revenues for Plaintiff.?° Thus, it
would appear that Plaintiff, far from considering Defendant Bond "worthless," viewed
70 See, e.g, N.T. 85-86.
24
him as a valuable asset in terms of attracting listeners and promoting the economic
interests of WNNK. As will be discussed further, the court is of the view, on the basis of
the evidence present at the hearing on Plaintiff's petition, that Defendant Bond was
terminated not for "failing to do his job," but for repeated violations of contractual
provisions unrelated to job performance that Defendant Bond knew could result in
termination of his employment. See All-Pak, 694 A.2d at 352 & n. ll (stating that
enforcement of covenants is unreasonable when "an employer terminated an employee
for reasons beyond the employee's control," but is reasonable when employee violates
contractual requirements intentionally). In a circumstance such as this, in which it is
essentially undisputed that the employee's performance on-air was "completely
satisfactory" in terms of furthering the interests of the employer in garnering ratings and
advertising revenue, the termination of the employee for violations of unrelated
contractual provisions should not render the enforcement of post-employment restrictive
covenants unreasonable. Cf Insulation Corp. of Am., 446 Pa. Super. at 529-32, 667 A.2d
at 733-35 (finding that, when sales manager "was terminated because he failed to do his
job to increase sales[,] .... to take overnight sales trips to develop business[, or] ... to
report sales calls and expenses," the employee was fired for failing to promote his
employer's interests, and, as such, enforcement of post-employment restrictive covenant
would be unreasonable). As against Defendant Raback, the enforcement of the covenants
likely do not represent an unreasonable restriction for Plaintiff's protection because
Defendant Raback resigned voluntarily. See id
Further, it appears, again at least preliminarily, that the interests sought to be
protected by the covenants at issue in this case were legitimate. Plaintiff invested heavily
in promoting the names "Bruce Bond" and "Stretch," in conjunction with the "Late
Afternoon Show" for the purpose of garnering higher ratings and more advertising
revenues for the station. As Plaintiff seeks to enforce them in this case, the restrictive
covenants would serve only to limit a competing radio station, WRKZ, from exploiting
the investment of Plaintiff through the broadcast of a program on WRKZ that used the
same names as those promoted by Plaintiff and targeted listeners in the same DMA in
25
which Plaintiff currently competes. As such, the court is of the view that the covenants
likely sought to protect legitimate interests of Plaintiff.
Finally, in the view of the court, the evidence supported the proposition that the
covenants were reasonably limited in scope. They were drawn to encompass only the
broadcasting range in which WNNK operates and to last for only one year, which appears
to be a reasonable estimation of the period necessary for a radio station to hire a new on-
air personality and to develop an audience base for that individual. Cf Oloffson, 699
N.E.2d at 235 (finding one-year restriction reasonable as necessary to develop new on-air
personality). As such, it seems likely that the provisions will be found to represent
enforceable post-employment restrictive covenants.
Second, the court is of the view that, based on the evidence introduced thus far
regarding the circumstances surrounding the termination of the employment of
Defendants Bond and Raback, Plaintiff has preliminarily established "clear[ly]" that the
covenants limited Defendants Bond from accepting his current employment with
Defendant Citadel but has not established that the covenants so limited Defendant
Raback. In connection with Defendant Bond, the restrictive covenant, which facially
prohibited him from accepting broadcasting employment in the Harrisburg-Lancaster-
York DMA for a period of one year after his termination, provided that the limitations
would become effective upon his termination "for cause." Under the agreement, "cause"
was defined to include the "making of disparaging oral or written statements" about other
employees of PlaintiffTM and the "violation of any written policy" or directive of Plaintiff.
The evidence presented at the hearing tended to show that Defendant Bond had engaged
in a pattern of ridicule directed at several other employees, that Plaintiff, in the person of
Mr. Giovanniello, had issued several written directives instructing Defendant Bond to
refrain from doing so, advising him of the terms of his employment agreement, and
71 The exemption contained in Defendant Bond's employment agreement permitting
remarks about Cumulus management is inapplicable here because Mr. Bums and Ms.
Campbell, the individuals at whom the majority of Defendant Bond's comments were
directed, were not members of Cumulus management. See, e.g., N.T. 43-44.
26
warning him that more violations would result in his termination, and that Defendant
Bond was terminated by Plaintiff after he had again made disparaging remarks about co-
workers. In the court's opinion, this was sufficient to show, with a reasonable degree of
likelihood, that Defendant Bond was terminated "for cause," particularly in light of the
facts that Defendant Bond did not pursue his severance benefits, to which he would have
been entitled if he had been fired without cause, and that Defendant Bond was found to
have been terminated with cause by the unemployment compensation hearing officer.TM
Therefore, it would appear at this stage that the restrictive covenants limited him from
accepting employment with another broadcaster in the Harrisburg-Lancaster-York DMA
for one year after such termination.
In connection with Defendant Raback, the terms of the restrictive covenant, which
facially prohibited him from accepting broadcasting or sales employment in Carlisle and
other areas within a seventy-five mile radius of Plaintiff's transmitter in Perry County,
Pennsylvania, provided that Defendant Raback would be exempted from the broadcasting
position aspect of the non-compete provision if he gave Plaintiff "the first opportunity to
72 Although the Pennsylvania Supreme Court has found that decisions by unemployment
compensation hearing officers do not have preclusive effect on consideration of issues
raised by employers in subsequent judicial proceedings, see Rue v. K-Mart Corp., 552 Pa.
13, 21, 713 A.2d 82, 86 (1998) ("Because of the fast and informal nature of the
proceedings before the Referee, as well as the negligible economic consequences thereof,
we conclude that [the employer] did not have a full and fair opportunity to litigate the
issue of whether [the employee] stole a bag of potato chips."), and although at least one
Court of Common Pleas has reached a similar conclusion with respect to issues raised by
an employee, see Kerlin v. Nat'l R.R. Passenger Corp., 41 Pa. D. & C.4th 237, 240-41
(Dauphin 1999), those decisions were based on an examination of the circumstances
surrounding the presentation of the matter and not on any per se rule excluding
application of the collateral estoppel doctrine to prior decisions by an unemployment
compensation hearing officer. See Rue, 552 Pa. at 21, 713 A.2d at 86-87 (discussing
"negligible" financial interest of employer in litigating claim); Kerlin, 41 Pa. D. & C.4th
at 240-41 (discussing failure of hearing officer to consider issue of psychiatric injuries).
Based on the court's finding that Plaintiff has sufficiently demonstrated on the basis of
the evidence presented for present purposes that Defendant Bond was terminated for
cause, it is unnecessary to determine whether the prior decision by the unemployment
compensation hearing officer on the same issue should have preclusive effect in the case
subjudice.
27
offer [him] a full-time programming position and.., enter[ed] into a good faith
[negotiating] session with [Plaintiff] regarding said programming position." In essence,
these terms required that Defendant Raback present Plaintiff with a "right of first refusal"
before he commenced employment in a broadcasting position with another employer.
See, e.g., CBS Inc. v. Capital Cities Communications, Inc., 301 Pa. Super. 557, 572, 448
A.2d 48, 56 (1982). In the present case, it was basically undisputed that Defendant
Raback, on the day of his resignation from Plaintiff, before he had commenced
employment with Defendant Citadel, presented Plaintiff, in the person of Mr.
Giovanniello, with the opportunity to offer him an acceptable full-time broadcasting
position on WNNK. However, Plaintiff could not present him with a firm offer on terms
that were acceptable to Defendant Raback.73 See id (stating that individual presenting
offer pursuant to contractual right of first refusal need not agree to terms that are not
personally acceptable). Further, because the evidence tended to show that Defendant
Raback had been effectively terminated by Plaintiff from his previous broadcasting
position and that Plaintiff accorded little value to Defendant Raback as a host without the
presence of Defendant Bond,TM the court was of the view that Defendant Raback was at
73 See supra note 66 and accompanying text.
74 Plaintiff' s view of the value of Defendant Raback as a primary host, without Defendant
Bond, was well illustrated by the testimony of Mr. Giovanniello:
So we came back after the first of the year [2002], and at that point
the [Late Afternoon Show] was being hosted by Matt Raback... and we
made an attempt to do the best job we could, but it just wasn't working. We
were trying to live in a world that didn't exist any longer. Bruce was the
show. The show revolved around Bruce [Bond], and Bruce wasn't there.
And we were left instead, although, you know, an admirable attempt
was made, we were left instead with.., the hosts remaining that were
trying to continue on doing the show, and it just wasn't working. It wasn't
being received by the audience well.
[I]n particular, as it relates to Matt Raback, his character as Stretch is
just that. It's a character. It's a persona. It's a character being a sidekick.
And trying to take him in that role and change it to where he was being the
28
least arguably justified in concluding that Plaintiff was not prepared to offer him an
acceptable full-time broadcasting position and that further negotiations would have been
futile.75 See id; cf Birth Center v. St. Paul Cos., Inc., 727 A.2d 1144, 1155 (Pa. Super.
Ct. 1999) (stating that insurer's duty to negotiate for settlement in good faith does not
require insurer to settle for less than policy limit if it reasonably believes settlement is
excessive), aff'd, 567 Pa. 386, 787 A.2d 376 (2001). Because the evidence presented at
this stage showed that, at a minimum, Defendant Raback provided Plaintiff with the
opportunity to offer him a full-time broadcasting position but that Plaintiff did not make
an offer acceptable to Defendant Raback, the court is of the view that Plaintiff did not
sustain its burden to show a "clear" right to relief on the basis of the restrictive covenant
contained in Defendant Raback's employment contract.76
With respect to the fifth prerequisite for the issuance of a preliminary injunction,
the court is of the opinion that specific enforcement of the covenant as against Defendant
Bond would prevent greater harm than would otherwise result.77 Plaintiff offered
host of the show full-time, although we all had good intentions to try to
make it work, it just wasn't working.
N.T. 115.
75 Lex neminem cogit ad vana seu inutilia peragenda. Black's Law Dictionary 1653 (7th
ed. 1999) ("The law forces no one to do vain or useless things."); see also Learock v.
Paxson, 208 Pa. 602, 610, 57 A. 1097, 1100 (1904) (quoting maxim).
76 Plaintiff also alleged that Defendant Raback took with confidential information
regarding WNNK pricing and marketing strategies. The court found this allegation to be
without merit. See N.T. 376-78.
77 Although the court's disposition of the case makes it is unnecessary to reach the issue
of the balancing of harms between Defendant Raback and Plaintiff, the court is of the
opinion that greater harm would arguably result from granting the injunction than a
refusal to do so. Although Defendant Raback, under the name "Stretch," has a high name
recognition in the area, the evidence presented as the hearing on the petition tended to
show that this name recognition produced increased ratings only when paired with the
name "Bruce Bond." During the short time after Defendant Bond's termination, when
Defendant Raback hosted the "Late Afternoon Show" on WNNK, the program did poorly
in the ratings and was cancelled quickly by Plaintiff. See supra note 74. Accordingly, the
court is of the opinion that Plaintiff has failed to establish that the harm suffered by
29
evidence that tended to show that the continuing violation of the covenant by Defendant
Bond will cause an increasing loss of advertising revenue and market share, both of
which pose significant threats to the viability of a radio station in a competitive market
such as the Harrisburg-Lancaster-York DMA. In comparison, Defendant Bond is limited
from employment as an on-air personality for only one year, six months of which have
already passed, and only in the limited area encompassed by the Harrisburg-Lancaster-
York DMA. Although Defendant Bond may experience difficulties in finding gainful and
permanent employment outside this DMA, in which he has a high name recognition, the
court is of the view that the temporary restriction represent by enforcement of the
covenant is not unreasonable and does not outweigh the potential harm caused to
Plaintiff.78
For the foregoing reasons, the following preliminary injunction will be entered:
PRELIMINARY INJUNCTION
AND NOW, this 27th day of September, 2002, upon consideration of Plaintiff's
petition for a preliminary injunction, following a hearing held on June 27, 2002, July 11-
12, 2002, and August 29, 2002, and for the reasons stated in the accompanying opinion, it
is ordered, adjudged and decreed as follows:
1. Pending further order of court, Defendant Bruce Bond and
Defendant Citadel Broadcasting Company are enjoined from continuing
Defendant Bond's present employment with Defendant Citadel for a period
Plaintiff outweighs the potential harm caused to Defendant Raback by a loss of his
current employment, provided that Defendant Bond is enjoined from participating with
Defendant Raback on the air.
78 Plaintiff did not present evidence relating to the salaries of either Defendant Bond or
Raback in connection with their employment with Defendant Citadel. However, both
Defendant Bond and Raback testified at the hearing that they are being paid a lower
annual salary by Defendant Citadel than they received from Plaintiff. As such, based on
the equities involved, the court will assign the value of the bond to be posted pursuant to
Pennsylvania Rule of Civil Procedure 153 l(b) based on the previous salaries paid by
Plaintiff, which, in the case of Defendant Bond, was approximately $100,000.
30
of one year from December 10, 2001, plus a period equal to that of his
recent employment with Defendant Citadel.
2. This preliminary injunction shall become effective upon the
posting of a bond or cash in the amount of $100,000 in accordance with
Pennsylvania Rule of Civil Procedure 1551(b) for the protection of
Defendants Bond and Citadel with respect to the preliminary injunction
affecting Defendant Bond's employment.
3. In the event that the requisite bond or money is not posted or
deposited within twenty days of the date of this order, the order shall be
deemed automatically dissolved.
4. No other relief is granted at this time.
BY THE COURT,
/s/J. Wesley Oler, Jr.
J. Wesley Oler, Jr., J.
Anthony J. Nestico, Esq.
Richard B. Druby, Esq.
840 East Chocolate Avenue
Hershey, PA 17033
Attorneys for Plaintiff
John J. Myers, Esq.
Adam M. Schienvold, Esq.
Allan W. Brown, Esq.
Bridget E. Montgomery, Esq.
213 Market Street, 8th Floor
P.O. Box 1248
Harrisburg, PA 17108-1248
Attorneys for Defendants
31
CUMULUS BROADCASTING, IN THE COURT OF COMMON PLEAS OF
INC., t/d/b/a WNNK, CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v. CIVIL ACTION - EQUITY
BRUCE BOND, MATTHEW
RABACK, a/k/a "STRETCH"
and CITADEL
COMMUNICATION
CORPORATIONS, t/d/b/a
CITADEL BROADCASTING
COMPANY, t/d/b/a WRKZ
102.3 FM,
Defendants NO. 02-3018 CIVIL TERM
IN RE: PLAINTIFF'S PETITION FOR EMERGENCY
PRELIMINARY INJUNCTION
BEFORE OLER, J.
PRELIMINARY INJUNCTION
AND NOW, this 27th day of September, 2002, upon consideration of Plaintiff's
petition for a preliminary injunction, following a hearing held on June 27, 2002, July 11-
12, 2002, and August 29, 2002, and for the reasons stated in the accompanying opinion, it
is ordered, adjudged and decreed as follows:
1. Pending further order of court, Defendant Bruce Bond and
Defendant Citadel Communication Corporations are enjoined from
continuing Defendant Bond's present employment with Defendant Citadel
for a period of one year from December 10, 2001, plus a period equal to
that of his recent employment with Defendant Citadel.
2. This preliminary injunction shall become effective upon the
posting of a bond or cash in the amount of $100,000 in accordance with
Pennsylvania Rule of Civil Procedure 1551(b) for the protection of
Defendants Bond and Citadel with respect to the preliminary injunction
affecting Defendant Bond's employment.
3. In the event that the requisite bond or money is not posted or
deposited within twenty days of the date of this order, the order shall be
deemed automatically dissolved.
4. No other relief is granted at this time.
BY THE COURT,
J. Wesley Oler, Jr., J.
Anthony J. Nestico, Esq.
Richard B. Druby, Esq.
840 East Chocolate Avenue
Hershey, PA 17033
Attorneys for Plaintiff
John J. Myers, Esq.
Adam M. Schienvold, Esq.
Allan W. Brown, Esq.
Bridget E. Montgomery, Esq.
213 Market Street, 8th Floor
P.O. Box 1248
Harrisburg, PA 17108-1248
Attorneys for Defendants