HARRISBURG – The Superior Court of Pennsylvania on Nov. 17 affirmed a trial court decision granting a preliminary injunction to Tyco International Management Co. LLC and Tyco Fire Products LP in a dispute with a former employee whom Tyco officials accused of violating employment contracts after taking a job with a competing company.
In backing the trial court’s granting of the preliminary injunction, the high court said the agreements signed by former employee Ralph M. Fuchs were valid and enforceable and that the appellant had breached his obligations by going to work for Reliable. The court added that the time period of one and two years prohibiting Fuchs from competing with Tyco as an employee of Reliable was also reasonable.
“The restrictive covenants in the non-compete agreements are reasonably necessary for the protection of Tyco’s legitimate business interests,” the court brief read. “Tyco has a significant interest in protecting its customer base, and the confidentiality of its business and pricing information.”
A preliminary injunction is a document designed to stay a party in a case from pursuing further action until the case is decided.
According to the Nov. 17 memorandum, Ralph M. Fuchs, a former employee of Tyco, a manufacturer of fire protection products, filed an appeal contesting the order granting the preliminary injunction but the Superior Court of Pennsylvania described his appeal as “without merit.”
The memorandum states Fuchs had been employed at Tyco first as a sales manager and then as senior sales manager from Feb. 27, 2006, to Jan. 6, 2016. Just prior to beginning his job at Tyco, Fuchs signed employee confidentiality and non-competition agreements in which he promised not to enter employment with a competing company if he left Tyco for a period of 12 months. He also pledged not to work for another competing company in states and territories served by Tyco, and to protect and keep confidential Tyco’s customer and trade secret information including access to the company’s computer software data base.
In January 2016, Fuchs left the company to take a job with Reliable Automatic Sprinkler Co. Inc., a competitor of Tyco. Fuchs received a letter from Tyco informing him that the company believed he was in violation of the contract agreements he had signed, the memorandum states.
According to the memorandum, while working for Reliable, Fuchs visited Tyco customers in states covered by the agreement restrictions for the purpose of selling Reliable products.
On April 13, 2016, Tyco filed a complaint in the court of Common Pleas of Montgomery County, seeking a preliminary injunction to prevent Fuchs from working for Reliable in 11 states which made up his former Tyco sales territory.
On Nov. 21, 2016, the trial court granted the preliminary injunction. Under the order, Fuchs was prohibited from working the same sales territories for Reliable as served by Tyco for a period of one year, soliciting Tyco customers for a period of two years, and from disclosing Tyco’s confidential information.
In December 2016 Fuchs appealed, posing questions that challenged the allegation Tyco had suffered future harm, and also questioned why the two-year-period restriction dated from the time of the injunction order and not the end of Fuch’s employment with Tyco.
The high court said the trial court did not error in granting Tyco’s petition for a preliminary injunction and affirmed the Nov. 21, 2016, order.