John G. Bryant Co. v. Sling Testing & Repair, Inc. - 471 Pa. 1, 369 A.2d 1164 (1977)

Rule:

The essential prerequisites for the issuance of a preliminary injunction are: 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. Even more essential, however, is the determination that the activity sought to be restrained is actionable and that the injunction issued is reasonably suited to abate such activity. And unless the plaintiff's right is clear and the wrong is manifest, a preliminary injunction will not generally be awarded.

Facts:

Appellees hired appellant individual as sales agent for several years under two written contracts, each containing covenants not to compete. Appellant individual decided to go into business for himself and entered into a written agreement with appellees, whereby he was allowed to form appellant company and to solicit new business within a defined sales territory. Appellant company was prohibited from selling directly to appellees' established accounts. Appellant made direct sales to appellees' accounts in violation of the agreement. Appellees sued, requesting a preliminary injunction to restrain appellants, company and individual, from continuing direct sales to those accounts protected under the covenant. The court granted appellees' motion, and appellants challenged the decision.

Issue:

Was the covenant not to compete enforceable, thereby justifying the grant of preliminary injunction in favor of appellees? 

Answer:

Yes.

Conclusion:

On appeal, the court affirmed. Appellees sustained their burden of showing that irreparable harm would result from appellants' continued violation of the covenant not to compete. The covenant was reasonably limited as to duration of time, geographical extent, and was prima facie enforceable. A preliminary injunction was necessary to protect appellees' established relationships with their sales accounts.