Albee Homes, Inc. v. Caddie Homes, Inc.
| Decision Date | 16 March 1965 |
| Citation | 207 A.2d 768,417 Pa. 177 |
| Parties | ALBEE HOMES, INC., and Albee Summit Homes, Inc., Albee Pearl Homes, Inc., Albee Camden Homes, Inc., Albee Penn Homes, Inc., Albee Star Homes, Inc., Albee Garden Homes, Inc., representing themselves and all sales subsidiaries of Albee Homes, Inc., a class of persons too numerous to set forth, v. CADDIE HOMES, INC., Meir Lutman, Haron Dahan, Appellants. |
| Court | Pennsylvania Supreme Court |
Allen J. Levin, of Folz, Bard, Kamsler, Goodis & Greenfield, Edward Greer, Philadelphia, for appellants.
Pace Reich, of Modell, Pincus, Hahn & Reich, Philadelphia, for appellees.
Before BELL, C. J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
These are appeals from the decree of the Court of Common Pleas No. 6 of Philadelphia County granting a preliminary injunction to the plaintiffs, Albee Homes, Inc. and its subsidiaries (Albee), restraining the corporate defendant, Caddie Homes, Inc. (Caddie), and two individual defendants, Lutman and Dahan, from carrying out any course of conduct designed to induce Albee employees to terminate their employment.
Albee and Caddie are competitors engaged in the design, manufacture and sale of pre-cut homes and allied products. Albee brought this action for preliminary and permanent injunctions, alleging, inter alia, that the individual defendants had been former employees of Albee; that they had acquired secret trade information during the course of their employment with Albee and had thereafter used it unfairly upon leaving their employment to organize Caddie; that, knowing of the existence and nature of employment contracts which Albee had with each of its employees, the individual defendants induced and continued to attempt to induce Albee employees to terminate and violate their employment contracts; and that, Caddie knowing of such wrongful activities, associated with the individual defendants in order to acquire the benefits thereof. Albee sought to enjoin Caddie from further engaging in a business similar to that of Albee, to restrain further disclosures of trade secrets, to enjoin the defendants from inducing Albee employees to terminate their employment contracts, and to recover both compensatory and punitive damages.
On a rule to show cause, the court below heard testimony and issued a preliminary injunction, enjoining Caddie, Lutman and Dahan, 'from directly or indirectly committing any act, and from communicating directly or indirectly with any person * * * in the employ of the plaintiffs Albee Homes, Inc. * * *, or following any course of conduct, designed to or which would have the effect of persuading or inducing any employee of the plaintiffs * * * to sever or terminate his or her relationship with the plaintiffs, or any of them.' From the decree issuing this preliminary injunction these appeals are taken.
The scope of our review on an appeal from a decree either granting or denying a preliminary injunction is Alabama Binder & Chemical Corp. v. Pennsylvania Industrial Chemical Corp., 140 Pa. 214, 215, 189 A.2d 180, 181 (1963). And 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. Alabama Binder & Chemical Corp. v. Pennsylvania Industrial Chemical Corp., supra. 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: Keystone Guild, Inc. v. Pappas, 399 Pa. 46, 159 A.2d 681 (1960), and Herman v. Dixon, 393 Pa. 33, 141 A.2d 576 (1958).
In the first place, the offering of employment to a person under a contract, terminable at the will of either, with another is not actionable in and of itself: Morgan's Home Equipment Corp. v. Martucci, 390 Pa. 618, 136 A.2d 838 (1957); Harley & Lund Corp. v. Murray Rubber Co., 31 F.2d 932 (2d Cir. 1929); and, Triangle Film Corp. v. Aircraft Pictures Corporations, 250 F. 981 (2d Cir. 1918). As stated in Morgan's Home Equipment Corp. v. Martucci, 390 Pa. at 633-634, 136 A.2d at 847:
Such being the case, the first question is whether the purpose of Caddie's offer of employment was to secure the services of 'particularly gifted or skilled' employees, or just to take them away from Albee. The record supports no other conclusion than that the purpose of Caddie was merely to get salesmen experienced in the business of selling pre-cut homes. There is no evidence whatsoever of an ulterior motive. The only testimony in this regard is that if Caddie is allowed to continue its course of inducing employees then Albee's business would suffer. the disruptive effect is the consequence, not the purpose, of the inducement.
The next test is whether the inducement was made for the purpose of having the employees commit wrongs. That the purpose was not to pilfer trade secrets is plainly refuted by the complaint, which alleges that both of the indivicual defendants were possessed of these 'secrets' before they left Albee's employ. If, in fact, there are 'trade secrets' and 'unique methods' to be protected, this must be done in another phase of the proceeding directly dealing therewith. At the present, we are concerned only with whether the procurement of secrets was a purpose of the enticement of employees. Clearly, it was not.
Neither do we consider one of the purposes to have been enticement of Albee's customers. The only direct testimony on this point was given by Dahan as part of Albee's case. And he stated categorically that not only was that not the purpose, but also that any employees who came from Albee came devoid of 'leads' (i. e., names of potential customers). Furthermore, with the exception of two men (one of whom was hired by Caddie not in the capacity of a salesman), all of the ex-employees of Albee moved substantial distances from the place of their employment by Albee. If the population of the country is in fact Albee's clientele, then perhaps these men were employed to entice potential Albee customers. But we do not consider 'customers' in such broad terms, nor would such a clientele be capable of protection.
It is further asserted that the enticement is enjoinable because all of Albee's employees were and are under employment contracts (terminable at will), the terms of which were and are known to all the defendants, which contain restrictive covenants, including one to the effect: '(c) that, while in the employ of * * * Albee Homes, Inc., * * * and for a period of one year after the termination...
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