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Insulation Corp. of Am. v. Brobston

Superior Court of Pennsylvania

January 31, 1995, Argued ; November 3, 1995, Filed

No. 322 Philadelphia 1994

Opinion

 [*523]  [**730]   OPINION BY KELLY, J.:

Filed November 3, 1995

In this opinion, we are called on to determine whether the enforcement of a two-year, three hundred mile "non-competition"  [*524]  covenant contained in a employment contract is reasonable where the former employee was terminated for poor performance and the employer's proprietary business information was already protected under injunctive enforcement of a "non-disclosure" covenant of the same agreement. Under such circumstances, we hold that the modified two-year time restriction imposed upon the former employee is both broader than necessary to  [**731]  protect the employer's business interests and unduly oppressive on the former employee. Accordingly, we affirm in part and reverse in part, dissolving the preliminary injunction enforcing the "non-competition" covenant of the agreement.

This appeal involves a challenge to the trial court's grant of a preliminary injunction in favor [***2]  of appellee, Insulation Corporation of America ("ICA"), enforcing the terms of "non-disclosure" and "non-competition" restrictive covenants contained in a post-employment agreement between ICA and appellant, Richard Brobston ("Brobston"). The pertinent facts and procedural history of this case are as follows. ICA is a corporation engaged in the manufacture and sale of polystyrene packaging, roofing and insulation products. Brobston was hired by ICA in October, 1982. At the time, Brobston was forty-seven years old, had worked in the insulation industry since 1977, and began his employment without a written contract. His initial position was territory sales manager. In 1986, he was promoted to national account manager. In 1990, he was promoted to general manager.

In July, 1992, ICA decided to expand its product line from commodity or "anyone can do" 1 products into more specialized products through the utilization of a computer-assisted design (CAD) system. Prior to purchasing the CAD system, ICA required that Brobston and certain other employees sign employment contracts which contained restrictive covenants or be terminated. On July 24, 1992, Brobston signed the proffered  [*525]  employment [***3]  contract, which contained the following pertinent terms:

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446 Pa. Super. 520 *; 667 A.2d 729 **; 1995 Pa. Super. LEXIS 3370 ***; 11 I.E.R. Cas. (BNA) 170

INSULATION CORPORATION OF AMERICA, Appellee v. GARY BROBSTON, Appellant

Prior History:  [***1]  Appeal from the Order entered December 30, 1993, in the Court of Common Pleas of Lehigh County, Civil, No. 93-E-107. Before REIBMAN, J.

Disposition: Order affirmed in part, reversed in part.

CORE TERMS

restrictive covenant, covenant, terminated, non-competition, circumstances, trial court, products, sales, post-employment, customer, training, preliminary injunction, former employee, hardship, employment contract, injunctive, insulation, trade secret, non-disclosure, confidential, oppression, courts, margin, novice, legitimate business, business interests, specialized, discloses, territory, utilizing

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Remedies, Injunctions, Preliminary & Temporary Injunctions, Business & Corporate Compliance, Contract Formation, Consideration, Adequate Consideration, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Noncompetition & Nondisclosure Agreements, Contracts Law, General Overview, Contracts Law, Types of Contracts, Covenants, Employment Relationships, Employment Contracts, Duration of Employment, At Will Employment, Duration of Employment