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HomeMy WebLinkAbout2009-7033 Civil AMBASSADOR HOME : IN THE COURT OF COMMON PLEAS OF IMPROVEMENTS, INC., : CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFF : : V. : : WILLIAM VOKOUN, : DEFENDANT : NO. 09-7033 CIVIL IN RE: SPECIAL AND PRELIMINARY INJUNCTION ORDER OF COURT st AND NOW , this 21 day of May, 2010, upon consideration of the Plaintiff’s Request for a Special and Preliminary Injunction, the Defendant’s Answer thereto and after hearing; IT IS HEREBY ORDERED AND DIRECTED that the Plaintiff’s Petition for DENIED Special and Preliminary Injunction is . By the Court, M. L. Ebert, Jr., J. Robert E. Kelly, Jr., Esquire Attorney for Plaintiff John Kerr, Esquire Attorney for Defendant bas 1 AMBASSADOR HOME : IN THE COURT OF COMMON PLEAS OF IMPROVEMENTS, INC., : CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFF : : V. : : WILLIAM VOKOUN, : DEFENDANT : NO. 09-7033 CIVIL IN RE: SPECIAL AND PRELIMINARY INJUNCTION OPINION AND ORDER OF COURT Ebert, J., May 21, 2010 – PROCEDURAL HISTORY On October 15, 2009, the Plaintiff filed a complaint in law and equity in the above captioned matter. The complaint alleged a breach of a Nondisclosure and Noncompetition Agreement. Plaintiff requested a “Special and Preliminary Injunction” be granted which would prohibit Defendant from his alleged continued violation of the Nondisclosure and Noncompetition Agreement. The Defendant filed an Answer to the Complaint on December 4, 2009. A hearing on the request for “Special and Preliminary Injunction” began on January 22, 2010. A second day of testimony was held on February 22, 2010 on which date the hearing was concluded. Transcripts of the testimony were filed. Plaintiff filed proposed Findings of Fact and Conclusion of Law on March 28, 2010. The Defendant filed his proposed Findings of Fact and Conclusion of Law on March 29, 2010. For the reasons stated in this opinion, the Plaintiff’s request for DENIED Special and Preliminary Injunction is . 2 FINDINGS OF FACT 1. William Vokoun, hereinafter “Vokoun,” was employed by Ambassador Home Improvements, Inc., hereinafter “Ambassador,” on April 13, 2009, and resigned on 1 August 12, 2009. 2. Upon being hired, Vokoun signed Ambassador’s Nondisclosure and Noncompetition Agreement. The Agreement contained provisions which called for a noncompete period of 2 years following resignation and prevented Vokoun from generally engaging in any business which competed with Ambassador within a 50 mile 2 radius of their offices at 4856 Carlisle Pike, Mechanicsburg, PA. 3. Defendant received a Bachelor’s Degree from West Chester University in 3 Music and Education in 2006. 4. Prior to working for Ambassador, Defendant never worked in the home 4 improvement field. 5. Defendant was initially assigned by Ambassador to sell Owens Corning 5 basement finishing systems for Ambassador, ranging in price from $20,000 to $80,000. 6. While at Ambassador, Defendant was trained on the Owens Corning 6 basement finishing system, one-on-one, by his Manager Darryl Hodge. 7. While at Ambassador, Defendant was not trained on the Anderson Window system, which involved a different division, different sales manager, different training 7 classes and different meeting times. 1 Notes of Testimony, January 22, 2010, page 17 (hereinafter N.T., 1/22/10, p. _) 2 N.T. 1/22/10, p. 46; Pl. Ex. 8 3 Pl. Ex. 9, 10 4 N.T. 1/22/10. p. 18, 42-44 5 N.T. 1/22/10, p. 52 6 N.T. 1/22/10, p. 50 7 N.T. 1/22/10, p. 50 3 8. Plaintiff’s selling system was a ten step selling system. This selling system is also used by other companies in the home improvement industry, including Thermal Industries, Appleby, Champion and Castle. This ten step selling system is utilized not only to sell windows, but bathrooms, basements, roofing, siding and other home 8 improvements. 9. The Ten Step Selling System utilized by Ambassador does not represent a trade secret, was not created by Ambassador, and was not unique to Ambassador. 10. Defendant had difficulty selling the basement finishing system. He sold only 9 four units and was not making enough money to live on. 11. Plaintiff expected Defendant to close a sale on twenty percent (20%) of the leads he was given. His performance was under twenty percent and he was concerned about his continued employment at Ambassador because he was not selling to their 10 standards. 12. Defendant worked for Ambassador from April 13, 2009 to August 12, 2009, a 11 period of approximately 4 months. 13. Defendant Vokoun accepted a sales position with West Shore Window and Door (hereinafter West Shore) and started working for them on August 19, 2009. In that position he was assigned to sell replacement windows and doors. 14. West Shore is located at 1160 West Trindle Road, Mechanicsburg, PA 17055. Ambassador Home Improvements is located at 4856 Carlisle Pike, 8 N.T. 1/22/10, p. 51, 93, 94 9 N.T. 1/22/10, p. 52 10 N.T. 1/22/10, 11 N.T. 1/22/10, p. 17,18 Pl. Ex. 8 4 Mechanicsburg, PA 17050. West Shore is located less than 7 miles from Ambassador, and thus well within a 50 mile radius of Ambassador. 12 15. Defendant did not take any customer lists with him when he left Plaintiff. 16. Defendant has not solicited any known customers of Plaintiff on behalf of 13 West Shore. 17. Defendant has not tried to induce, solicit or get any employee of Plaintiff to 14 leave their employment. 18. West Shore’s windows sell for a price in the neighborhood of $600 to $800 per window, while Anderson windows marketed by Ambassador sell for between 1,200 15 to $1,300 per window. 19. Ambassador has produced no evidence to show that it lost any money as a result of Vokoun’s employment by West Shore. 20. Vokoun’s employment at West Shore is not causing Ambassador immediate and irreparable harm. DISCUSSION A covenant not to compete is a restricted covenant “relied upon by employers to shield their protectable business interest.” A noncompetition covenant may preclude a former employee from competing with his prior employer for a specified period of time and within a precise geographic area. This Court fully recognizes that in Pennsylvania noncompetition agreements may be enforceable. J. C. Ehrlich Company, Inc. V. Martin, 979 A.2d 862 at 864-865 (Pa.Super. 2009). 12 N.T. 1/22/10, p. 53, 55 13 N.T. 1/22/10, p. 55 14 N.T. 1/22/10, p. 56 15 N.T. 1/22/10, p. 35, 53 5 At this point we do not attempt to determine whether Ambassador, the party seeking the preliminary injunction, will eventually prevail in this lawsuit. The decision regarding the preliminary injunction does not reach the final merits of the controversy. Indeed, at trial of this matter, Ambassador could well prevail and by the very terms of its Nondisclosure and Noncompetition Agreement at minimum would be entitled to $5,000 per month in addition to any actual money damages. The Plaintiff does seek a Special and Preliminary Injunction against Defendant. The purpose of a preliminary injunction is to prevent irreparable injury or gross injustice by preserving the status quo as it exists or as it previously existed before the acts complained of in the complaint. Ambrogi v. Reber, 932 A.2d 969 at 974 (Pa.Super. 2007). A Plaintiff seeking such an injunction must establish that: (1) Relief is necessary to prevent immediate and irreparable harm; (2) A greater injury will occur from refusing the injunction than from granting it; (3) The injunction will restore the parties to the status quo; (4) The alleged wrong is manifest and the injunction is reasonably suited to abate it; and (5) The Plaintiff’s right to relief is clear. Federal Courts who have addressed the issue of when a preliminary injunction should issue have stated the standard in a slightly different fashion which includes four factors. Without question, these Courts do state that a party seeking a preliminary injunction must demonstrate “that it will suffer irreparable harm if the injunction is denied and that granting a preliminary relief will not result in even greater harm to the nonmoving party.” Zambelli Fireworks Manufacturing v. Wood, 2009 W.L. 159182 6 (W.D. Pa.). For an injunction to issue the Plaintiff must produce evidence sufficient to convince the Court that all factors favor preliminary relief. Id. Accordingly, if the Plaintiff fails to provide sufficient evidence to prove one of the required factors the request for a preliminary injunction must fail. The grant of injunctive relief is an extraordinary remedy… which should be granted in only limited circumstances. In applying this standard to the case at bar, it is clear that the Plaintiff cannot prevail. Ambassador has simply failed to show that the preliminary injunction is necessary to prevent immediate and irreparable harm. This Court can simply not accept the proposition that Defendant Vokoun, who graduated from West Chester University in May of 2006 with a degree in music and education, who has held various sales positions each for less than a year since 2007 with companies such as Harrisburg Copiers, Yellowbook and United Rentals, Inc. and who had never been employed in the home improvement business could cause Ambassador immediate and irreparable harm by working for West Shore. Vokoun was trained to sell Owens Corning Basement Finishing Systems not windows and doors. He did not receive any special training from Ambassador which was not standard basic training in the ten step selling system used by practically everyone involved in the home improvement business. Ambassador maintains that it does not have to establish that it actually lost money as a result of Vokoun’s actions. It cites a quote from Zambelli that “Pennsylvania Courts have uniformly recognized that a violation of a noncompetition agreement results in harm which is not compensable by money damages. Id. at 15. However, Ambassador fails to recognize that Zambelli also holds that “harm is 7 irreparable when it cannot be adequately compensated in damages, either because of the nature of the right that is injured or because there is no certain pecuniary standards for measurement of damages.” Id. at 16. Here, Ambassador in its nondisclosure and noncompetition agreement has clearly defined monetary damages by stating that Vokoun “will pay Ambassador the sum of five thousand ($5,000.00) dollars in addition to actual damages for each month… violations continue. (Plaintiff’s Exhibit No. 8) Additionally, the facts in Zambelli are significantly different from the case at bar. In Zambelli, the Defendant, Matthew Wood, was in essence an expert in the field of pyrotechnics and firework choreography. Wood had worked for the Zambelli Fireworks Company for a period of over 6 years and was identified as a “key employee.” He went to work for Pyrotecnico, a competing fireworks display company, even though he had signed a noncompete agreement with the Zambelli Company. Clearly, William Vokoun, who worked for Ambassador for approximately four months and who wasn’t even trained in selling windows and doors can hardly be equated to the type of specialist that Matthew Wood was in the very technical and unusual field of firework displays. Equally important, Zambelli states that “restrictive covenants have been historically viewed with disfavor and as a trade restraint that prevents an individual from earning a living.” Id. at 10. Hess v. Gebhard & Co. Inc., 808 A.2d 912 (Pa. 2002). The Court held that an individual’s right to pursue a career and to earn a livelihood is a unique and substantial interest. Thus the enforcement of restrictive employment covenants is a matter of equity rather than a pure legal exercise in contractual interpretation. A Court must balance the interest the employer seeks to protect against 8 the important interest of the employee in being able to earn a living in his chosen profession. Zambelli clearly indicates that “a more stringent balancing test is applied when the restrictive covenants are ancillary to employment, as opposed to the sale of a business.” Id. William Vokoun was a novice home improvement salesman. He was clearly concerned about making a living in his employment with Ambassador. Accordingly, the stringent balancing test required in this case clearly comes down on the side of Vokoun. CONCLUSION OF LAW For the foregoing reasons, Ambassador is not entitled to a preliminary injunction at this stage because it has not shown that relief is necessary to prevent immediate and irreparable harm. ORDER OF COURT st AND NOW , this 21 day of May, 2010, upon consideration of the Plaintiff’s Request for a Special and Preliminary Injunction, the Defendant’s Answer thereto and after hearing; IT IS HEREBY ORDERED AND DIRECTED that the Plaintiff’s verified Petition DENIED for Special and Preliminary Injunction is . By the Court, M. L. Ebert, Jr., J. Robert E. Kelly, Jr., Esquire Attorney for Plaintiff John Kerr, Esquire Attorney for Defendant bas 9