Injunctionary Enforcement On Non-Competition And Non-Solicitation Provisions Of Sales Manager’s Employment Agreement Is Denied

In the business law and business litigation case of Jarvis v. Cumulas Media, Inc. PICS Case No. 15-0129 (C.P. Berks Jan. 22, 2015), the Honorable Jeffery K. Sprecher dismissed the defendant’s appeal from the order which granted plaintiff’s petition for preliminary injunction to enjoin defendant from enforcing non-competition and non-solicitation provisions of plaintiff’s employment agreement was dismissed.

On May 7, 2007, defendant Citadel Broadcasting hired plaintiff Michael Jarvie as a general sales manager for its radio stations in Harrisburg, Lancaster, Reading, and York. Plaintiff executed a sales manager standard agreement which contained non-competition and non-solicitation provisions.

Plaintiff’s duties included supervising the sales efforts through the sale of advertising time, supervising and developing account executives and assistants, attending meetings, working with the programming and promotions departments to maximize sales opportunities and managing the budgets of the stations’ sales departments. From 2007 to 2010, plaintiff typically earned $85,000 to $99,000 per year, including salary and bonuses.

In 2011, Citadel merged with defendant Cumulus Media, Inc. Defendant changed the terms and conditions of plaintiff’s employment. Plaintiff was demoted to account manager with a reduction in salary and duties.

On Oct. 1, 2014, plaintiff accepted a position with IHeartMedia as a local sales manager. This radio station was in one of defendant’s markets. His responsibilities included supervising, developing and growing a team for radio stations in Berks County, pricing inventory and working on projects to increase the station’s profitability. Plaintiff gave defendant two weeks’ notice but defendant asked him to leave immediately. Defendant then contacted IHeartMedia and indicated it would enforce the non-competition and non-solicitation provisions of the agreement if IHeartMedia hired plaintiff.

Plaintiff filed this action for declaratory judgment and sought a preliminary injunction to preclude defendant from interfering with his ability to obtain new employment and to procure business. The court granted plaintiff’s motion.

The court concluded that plaintiff established a strong likelihood of success on the merits. Plaintiff was demoted and his managerial duties were eliminated. His compensation changed. Plaintiff no longer did the type of work for which he had been hired and for which he signed the agreement. The parties never executed a new agreement for the change of position nor did plaintiff assent to the change of duties. Moreover, the purpose of the non-compete clause was to prevent plaintiff from using his customer contacts and causing defendant a loss of revenue. Generally, non-competition covenants aim to protect trade secrets, confidential information, good will, and unique or extraordinary skills. If a non-competition covenants is for some improper purpose, for example, eliminating or repressing competition or to keep the employee from competing for the employer’s economic advantage, the covenant will not be enforced.

Plaintiff also made a showing of immediate and irreparable harm that could not be compensated by money damages. If plaintiff was not permitted to work for his new employer, he would not have any job. Defendant did not try to keep plaintiff employed while seeking legal resolution. Without employment, plaintiff had no way to support himself and his family. His damages were not compensable because he could not be reimbursed for the loss of this job.

Plaintiff also met his burden to show a greater injury would result if a preliminary injunction were denied rather than if it were granted. If the preliminary injunction were denied, plaintiff would lose the job from which he was fired and the new position and the means to support his family. Defendant, however, would still remain in business. Defendant contended that it may lose some revenue, but in all likelihood, it would not. The two stations serve different audiences in different localities.

Finally, the preliminary injunction would restore the status quo because plaintiff would become an employee in the same type of position he held at Citadel and defendant continued to operate its stations.

Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 38PLW113 (February 3, 2015)

Filed Under: Employment Agreements; Non-Solicitation Clauses; Non-Compete Clauses; Restrictive Covenants; Injunctions; Business Litigation; Business Law.

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