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HomeMy WebLinkAbout98-5103 equityINFORMATION SERVICES GROUP, : IN THE COURT OF COMMON PLEAS OF INC., a Pennsylvania : CUMBERLAND COUNTY, PENNSYLVANIA corporation, : Plaintiffs : V. : : JOSEPH D. HOWE, an individual : NO. 98-5103 EQUITY TERM and DATAQUEST, INC., : a Pennsylvania corporation, : Defendants : IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE GUIDO, J._ . ORDER OF COURT AND NOW, this ; ~ ~4< day of OCTOBER, 1998, the last paragraph of our order dated October 13, 1998, is amended to provide as follows: This preliminary injunction shall become effective upon Plaintiff posting bond in the amount of $1000.00 with the Prothonotary in accordance with Pa. Rule of Civil Procedure 1531(b) on or before October 31, 1998. In all other respects the order of October 13, 1998, shall remain in full force and effect. David T. Kluz, Esquire For the Plaintiff Stephen L. Grose, Esquire For the Defendants 'sld By th~ Edward E. Guido, J. INFORMATION SERVICES GROUP, : IN THE COURT OF COMMON PLEAS OF INC., a Pennsylvania corporation, Plaintiffs Ve CUMBERLAND COUNTY, PENNSYLVANIA JOSEPH D. HOWE, an individual : NO. 98-5103 EQUITY TERM and DATAQUEST, INC., : a Pennsylvania corporation, : Defendants : IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE GUIDO, J. AND NOW, this ORDER day of OCTOBER, 1998, Plaintiff's request for a Preliminary Injunction prohibiting Defendant Howe from working as an employee of Defendant Dataquest, Inc. assigned to the Penn DOT project with KPMG is DENIED. However, for a period of six (6) months beginning August 5, 1998, Defendant Howe is enjoined from the following: (1) Disclosing any confidential information, including information regarding rates, profit margins, and pricing, which he gained while employed for Plaintiff. (2) Disclosing any information with regard to the qualifications or salaries of any other employees or subcontractors of Plaintiff. (3) Except as otherwise specifically provided herein with regard to the KPMG project at Penn DOT, from providing any services to or on behalf of any of the clients listed in the non-compete provision of the Contract Employment Agreement between him and Plaintiff. For a period o~f six (6) months beginning August 5, 1998, Defendant Dataquest, Inc. is enjoined from the following: (1) Receiving from Defendant Howe any confidential · information, including information regarding rates, profit margins, and pricing, which he gained while employed for Plaintiff. (2) Receiving from Defendant Howe any information with regard to the qualifications or salaries of any other employees or subcontractors of Plaintiff. (3) Except as otherwise specifically provided herein with regard to the KPMG project at Penn DOT, allowing Defendant Howe to provide on its behalf any services to or on behalf of any of the clients listed in the non-compete provision of the Contract Employment Agreement between Defendant Howe and Plaintiff. This preliminary injunction shall become effective upon Plaintiff posting bond in the amount of $1000.00 with the Prothonotary in accordance with Pa. Rule of Civil Procedure 1531(b). David T. Kluz, Esquire For the Plaintiff Stephen L. Grose, Esquire For the Defendants :sld By the Edward E. Guido, J. INFORMATION SERVICES GROUP, : IN THE COURT OF COMMON PLEAS OF INC., a Pennsylvania : CUMBERLAND COUNTY, PENNSYLVANIA corporation, : Plaintiffs : Vo : : JOSEPH D. HOWE, an individual : NO. 98-5103 EQUITY TERM and DATAQUEST, INC., : a Pennsylvania corporation, : Defendants : IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE GUIDO, J. OPINION AND ORDER OF COURT The Plaintiff filed this action in equity seeking, inter alia, to enforce the terms of a covenant not to compete contained in an employment contract with its former employee Joseph D. Howe. Currently before us is Plaintiff's motion for a Preliminary Injunction. Plaintiff has asked us to prohibit Defendant Howe from working on a project for Defendant Dataquest with the Pennsylvania Department of Transportation. It has also requested that Defendant Howe be enjoined from further violations of the non-compete agreement. A hearing on said motion was held before this Court on September 25, 1998. Ail parties have filed trial briefs and the matter is now ready for disposition. FINDINGS OF FACT 1) Plaintiff is in the business of locating technical job assignments and providing consulting services in connection with computer programming, software development, data base design and systems analysis. 2) Defendant Dataquest is a competitor of Plaintiff. NO. 98-5103 EQUITY 3) Defendant Howe was employed by Plaintiff from 1988 through August 5, 1998. In 1995, Plaintiff went from being a full time salaried employee to being a contract employee. As part of that change in job status, the parties entered into a written employment contract. 4) The contract contained a non-compete provision. 5) For purposes of this hearing, the parties have agreed that the non-compete provision was supported by adequate consideration. 6) The non-compete provision prohibits Defendant Howe from working with a competitor in providing services to certain specified clients of Plaintiff for a period of six (6) months after he leaves his employment with Plaintiff.~ ' · 7) Defendant Howe was an at will employee at all relevant times. 8) While employed by Plaintiff, Defendant Howe gained specific and confidential knowledge regarding Defendant's staffing, employee salaries, rates, profit margins, and retail pricing structures. 9) If the Defendant shared the above information with a competitor, the competitor could consistently underbid Plaintiff. 10) Sometime in July 1998, Defendant Howe contacted Defendant ~It is important to note that the agreement does not prohibit him from working for a competitor. It merely prohibits him from providing services to certain clients on behalf of the competitor. NO. 98-5103 EQUITY Dataquest to inquire if it had any need for his services. He was advised that Defendant Dataquest did not. 11) A few weeks later Defendant Dataquest contacted Defendant Howe to advise him that it did have a position for him. 12) Defendant Howe quit his job with Plaintiff and went to work for Defendant Dataquest on August 5, 1998. 13) Defendant Howe has been assigned to work as a subcontractor for KPMG on a project it was awarded by Penn DOT. 14) Penn DOT is one of Plaintiff's clients for which Defendant Howe is prohibited from working under the terms of the non- compete provision of the employment contract. 15) If Defendant Howe had not left Plaintiff, Plaintiff might have been able to subcontract Defendant Howe to KPMG for the Penn DOT job. 1.6) Defendant Howe is particularly qualified to work on the project. 17) The Penn DOT project was awarded to KPMG by Penn DOT well before Defendant Howe ceased working for Plaintiff. Defendant Howe had no knowledge of, or input to, KPMG's proposal to Penn DOT. DISCUSSION The standards for granting a preliminary injunction are extremely high. All-Pak, Inc. v. Johnston, 694 A.2d 347 (Pa. Super. Ct. 1997). This is because "a preliminary injunction is somewhat like a judgment and execution before trial." Herman v. NO. 98-5103 EQUITY Dixon, 393 Pa. 33, 36, 141 A.2d 576, 577 (1958). It will not be granted unless the. Defendant's conduct is manifestly actionable and the Plaintiff's right to relief is clear. Sinqzon v. Pa. Dept. of Pub. Welfare, 496 Pa. 8, 436 A.2d 125 (1981). In the instant case, we are satisfied-that Defendant Howe has violated the terms of the non compete provision of the employment contract. We are further satisfied that the covenant not to compete is both reasonable and supported by adequate consideration. Therefore, it appears as though Defendant Howe's conduct is actionable and that Plaintiff's right to relief is clear. However, the issuance of a preliminary injunction to prevent Defendant Howe from working on the KPMG project at Penn DOT is still not appropriate in the instant case.-Our Supreme Court has stated on many occasions that such an injunction should not issue unless all of the following essential prerequisites are present: first, that it is necessary to prevent immediate and irreparable harm which could not be compensated by damages; second, that greater injury would result by refusing it than by granting it; and third, that it properly restores the parties to their status as it existed immediately prior to the alleged wrongful conduct. (emphasis added) (citations omitted) John G. Bryant Co. v. Sling Testinq and Repair, Inc., 471 Pa. 1, 7, 369 A.2d 1164, 1167 (1977). In the case before us, neither of the first two prerequisites have been met. Plaintiff's only legitimate concern is that it may lose business if Defendant Howe works for a competitor. The damages NO. 98-5103 EQUITY for business improperly diverted by Defendant Howe in violation of his employment agreement are the lost profits to Plaintiff. Any lost profits on the Penn.DOT project are clearly capable of being calculated.2 Therefore, a preliminary injunction is not appropriate. See Sheridan Broadcasting Networks, Inc., v. NBN Broadcastinq, Inc., 693 A.2 989 (Pa. Super. Ct. 1997). In addition, if we grant Plaintiff's request for a preliminary injunction and prohibit Defendant Howe from working on the Penn DOT project, he will be deprived of his livelihood. If we refuse to grant the injunction, we can perceive of no great injury to Plaintiff. Plaintiff had already lost the Penn DOT project to KPMG long before Defendant Howe had ever approac.hed Defendant Dataquest for a job.3 Therefore, we are satisfied that greater injury would result in granting the requested relief than will result in refusing it. While we see no need to enjoin Defendant Howe from working on the KPMG project at Penn DOT, we are receptive to Plaintiff's argument that it might be competing for other jobs with Defendant Dataquest over the next six (6) months. Certainly, disclosure of confidential information by Defendant Howe in such instances could do irreparable harm to Plaintiff. Neither Defendant 2Plaintiff's exhibit #4 has calculated its potential lost profits resulting from Defendant Howe working for Defendant Dataquest on the Penn DOT project. 3Were we faced with a situation where Defendant Howe had been involved in the attempt to obtain the Penn DOT job we would certainly reach a different result. NO. 98-5103 EQUITY disputes this proposition. Furthermore, each Defendant has indicated that neither would incur any harm by an order enjoining Defendant Howe from sharing confidential information or from working on any project other than the KPMG project at Penn DOT. Therefore, we are satisfied that the following order is appropriate. ORDER AND NOW, this 13th day of OCTOBER, 1998, Plaintiff's request for a Preliminary Injunction prohibiting Defendant Howe from working as an employee of Defendant Dataquest, Inc. assigned to the Penn DOT project with KPMG is DENIED. However, for a period of six (6) months beginning August 5, 1998, Defendant Howe is enjoined from the following: (1) Disclosing any confidential information, including information regarding rates, profit margins, and pricing, which he gained while employed for Plaintiff. (2) Disclosing any information with regard to the qualifications or salaries of any other employees or subcontractors of Plaintiff. (3) Except as otherwise specifically provided herein with regard to the KPMG project at Penn DOT, from providing any services to or on behalf of any of the clients listed in the non-compete provision of the Contract Employment Agreement between him and Plaintiff. For a period of six (6) months beginning August 5, 1998, Defendant Dataquest, Inc. is enjoined from the following: (1) Receiving from Defendant Howe any confidential information, including information regarding rates, profit margins, and pricing, which he gained while employed for Plaintiff. NO. 98-5103 EQUITY (2) Receiving from Defendant Howe any information with regard to the qualifications or salaries of any other employees or subcontractors of Plaintiff. (3) Except as otherwise specifically provided herein with regard to the KPMG project at Penn DOT, allowing Defendant Howe to provide on its behalf any services to or on behalf of any of the clients listed in the non-compete provision of the Contract Employment Agreement between Defendant Howe and Plaintiff. This preliminary injunction shall become effective upon Plaintiff posting bond in the amount of $1000.00 with the Prothonotary in accordance with Pa. Rule of Civil Procedure 1531(b). David T. Kluz, Esquire For the Plaintiff Stephen L. Grose, Esquire For the Defendants :sld By the Court, /s/ Edward E. Guido Edward E. Guido, J.