Metalico Pittsburgh Inc. v. Newman

J-A33020-16
2017 Pa. Super. 109
METALICO PITTSBURGH INC. IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
DOUGLAS NEWMAN, RAY MEDRED, AND
ALLEGHENY RAW MATERIALS, INC.
No. 354 WDA 2016
Appeal from the Order Dated January 20, 2016
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD 15-019082
BEFORE: LAZARUS, J., SOLANO, J., and STRASSBURGER, J.*
OPINION BY SOLANO, J.: FILED APRIL 19, 2017
Appellant Metalico Pittsburgh, Inc. appeals from the order granting
partial 1 summary judgment in favor of Appellee Allegheny Raw Materials,
Inc. (“ARM”) and its current employees, Appellees Douglas Newman and Ray
Medred (together, “Employees”). We reverse.
Newman and Medred formerly were employed by Metalico, a scrap
metal broker, and Metalico brought this action to enforce non-solicitation
provisions in their Metalico Employment Agreements. Newman and Medred
began working for Metalico in 2011 and signed Employment Agreements that
were effective as of September 19, 2011. The Agreements, which were the
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*
Retired Senior Judge assigned to the Superior Court.
1
As set forth below, all outstanding claims were resolved prior to appeal.
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2
same in all material respects, stated that each employee would be
employed for a term of three years, with an option to renew, and also set
compensation and benefits.
Each Employment Agreement included the following non-solicitation
provisions:
(b) Covenants of the Executive. In consideration of the
acknowledgments by the Executive, and in consideration of the
compensation and benefits to be paid or provided to the
Executive by the Employer, the Executive covenants that he will
not, directly or indirectly:
* * *
(ii) whether for the Executive’s own account or for the account of
any other person, at any time during the Employment Period or
the Post-Employment Period, solicit business of the same or
similar type being carried on by the Employer, from (A) any
person listed on Schedule A to this Agreement and (B) any other
person known by the Executive to be a supplier of the Employer
on or before the Termination Date, in either case whether or not
the Executive had personal contact with such person during and
by reason of the Executive’s employment with the Employer;
(iii) whether for the Executive’s own account or the account of
any other person at any time during the Employment Period and
the Post-Employment Period, (A) solicit, employ, or otherwise
engage as an employee, independent contractor, or otherwise,
any person who is or was an employee of the Employer at any
time during the Employment Period or in any manner induce or
attempt to induce any employee of the Employer to terminate
his employment with the Employer; or (B) interfere with the
Employer’s relationship with any person, including any person
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2
Newman’s Agreement referred to him as “the Executive,” and his
Agreement is quoted in this opinion; Medred’s Agreement referred to him as
“the Employee.” In all other pertinent respects, the Agreements are
substantially identical.
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who at any time during the Employment Period was an
employee, contractor, supplier, or customer of the Employer
....
Employment Agreements, § 8(b).
The Agreements defined “Employment Period” as “the term of the
Executive’s employment under this Agreement as set forth in § 2(b).”
Employment Agreements, § 1. Section 2(b), in turn, stated:
Subject to the provisions of § 6 [Termination], the term of the
Executive’s employment under this Agreement will be three (3)
years, beginning on the Effective Date [September 19, 2011]
and ending on the day before the third (3rd) anniversary of the
Effective Date (the “Termination Date”). Thereafter this
Agreement may be renewed for additional three-year terms at
the Employer’s option, subject to the agreement of the
Executive, and the Termination Date will be automatically
extended to the end of such renewal term.
Id. § 2(b). For purposes of the non-solicitation provisions, the “Post-
Employment Period” began “on the last day of the Executive’s employment
by [Metalico].” Id. § 1. The length of the Post-Employment Period depended
on the manner in which the Executive was terminated. See id. If the
Executive was terminated for cause or voluntarily terminated his
employment with Metalico “during or after the Employment Period,” then the
Post-Employment Period was two years. Id. §§ 1, 6(c), 6(e). If Metalico
terminated the Executive without cause, the Post-Employment Period was
one year. Id. §§ 1, 6(d).3 The Employment Agreements also provided that,
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3
The definition of “Post-Employment Period” in Section 1 reads:
“Post-Employment Period” means a period of time, determined
as of and commencing on the last day of the Executive’s
(Footnote Continued Next Page)
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“[i]f the Executive’s employment hereunder expires or is terminated, this
Agreement will continue in full force and effect as is necessary or
appropriate to enforce the covenants and agreements of the Executive in [§]
8,” the section including the non-solicitation provisions. Id. § 9(b).
On September 4, 2014, Newman sent an e-mail to Arnie Graber, the
General Counsel of Metalico’s parent company, with copies to Medred, Carlos
Agüero (President of Metalico), and another Metalico executive. The
message began:
As I am sure you are aware, both Ray [Medred] and I have
contracts that expire on September 18th (two weeks from
today). We are looking for clarity on what will happen on
September 19th 2014. We are under the assumption from
_______________________
(Footnote Continued)
employment by the Employer or any affiliate of the Employer,
equal to:
(i) For purposes of § 6(b) below [relating to termination
upon disability], twelve (12) months commencing on the later to
occur of (a) the Executive’s date of termination and (b) the last
date on which the Executive is issued a Disability insurance
payment.
(ii) For purposes of §§ 6(c) [relating to termination for
cause], 6(e) [relating to voluntary termination], and 7(b)
[relating to agreements regarding confidentiality and inventions]
below, two (2) years.
(iii) For purposes of § 6(d) below [relating to termination
by Metalico without cause], one (1) year.
(iv) For purposes of § 8(b) [relating to the non-
solicitation provisions], the period set hereinabove forth for the
subsection of § 6 applicable to the Executive’s termination.
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previous discussions that we will become employee[s] at will
once the contracts expire.
Mot. for Partial Summ. J., Ex. 1.4 Newman then asked about the effect of
the contracts’ expiration on his and Medred’s salary, benefits, expenses,
vacations and holidays, bonuses, and annual reviews. Id. That same day,
Agüero responded, stating, in pertinent part:
We are aware that the 3 year agreement for both you and Ray
matures on the 18th.
As I have mentioned before after the 18th you each become an
employee at will.
I believe that you are both valued employees that make
important contributions to the business and have the company’s
best interest at heart. Therefore it is our goal that you both
continue to be employed by Metalico even though your
preference is to not renew the 3 year agreements.
Mot. for Partial Summ. J., Ex. 1. Agüero then explained:
 Salary would not change, but raises would be discretionary, rather
than contractual;
 Medical coverage would not change;
 Normal and ordinary business expenses would continue to be covered,
but corporate credit cards may be eliminated and replaced by a
reimbursement plan5;
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4
The parties disagree as to who first suggested non-renewal of the
Employment Agreements. That dispute, however, does not affect our
resolution of this appeal.
5
ARM and the Employees note that Metalico later discontinued Newman’s
vehicle allowance. Appellees’ Brief at 11. However, this change did not occur
until August or September of 2015. See Ex. 2 in Support of Mot. for Partial
Summ. J. (Deposition of Kristen Kacik), at 123-24. ARM and the Employees
cite the discontinuation as evidence of a change in benefits.
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 Vacation days and holidays would not change;
 Bonuses would fall under the “IFCO” 6 formula that Metalico was
moving towards for the entire company, but there could still be
subjective or discretionary bonuses; and
 Contractual deferred stock grants would end with the agreement, but
Medred and Newman would still be eligible to participate in the
corporate pool of stock grants.
Id. This e-mail exchange did not contain any discussion of restrictive
covenants.
The three-year terms of Newman and Medred under the Employment
Agreements ended on September 18, 2014, and those terms were not
renewed. However, both Newman and Medred continued to work for
Metalico as employees at will, and they remained in that status until
September 21, 2015, when their employment with Metalico ended. 7 Shortly
thereafter, Newman and Medred began working for ARM, another scrap
metal supplier.
Metalico alleges that once they began their employment with ARM,
Newman and Medred solicited Metalico customers and employees to move to
ARM. Accordingly, on October 28, 2015, Metalico initiated this action, in
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6
“IFCO” is not otherwise identified or defined in the record. Agüero
explained that the formula was “based on profits of the Pittsburgh division”
and did “not distinguish between ferrous and non-ferrous” results. Mot. for
Partial Summ. J., Ex. 1.
7
Newman and Medred claim they were terminated. Metalico contends that
they resigned. As we later explain, this dispute is not material to our
disposition of this appeal.
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which it alleges, among other things, that Newman, Medred, and ARM
tortiously interfered with Metalico’s employee and customer contracts (Count
V), and that Newman and Medred breached their Employment Agreements
(Count VI). On January 14, 2016, Metalico filed a motion for a preliminary
injunction to prohibit ARM, Newman, and Medred from contacting any of
Metalico’s previous or current customers, suppliers, and employees.
On January 19, 2016, the day before the trial court was scheduled to
hold a hearing on the preliminary injunction, ARM, Newman, and Medred
filed a motion for partial summary judgment with respect to Counts V and VI
of Metalico’s complaint. They contended that the non-solicitation provisions
were unenforceable because the “Employment Agreements had expired in
September 2014, more than a year prior to the termination of [Medred and
Newman’s] employment with [Metalico], and . . . by agreement of the
parties, those Agreements were replaced with at will relationships that did
not include non-solicitation provisions or any other restrictive covenants.”
Mot. for Partial Summ. J. at ¶ 3. In their supporting brief, the movants
argued that “the parties’ agreement to terminate the 2011 Employment
Agreements and to replace them with new at will relationships effected
novations of the 2011 Employment Agreements.” Brief in Support of Mot. for
Partial Summ. J. at 10.
After considering the parties’ written submissions and oral arguments,
the trial court granted the motion for partial summary judgment and denied
Metalico’s motion for a preliminary injunction as moot. The trial court’s order
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was dated January 20, 2016, and was entered on the docket on March 3,
2016.
The trial court issued an opinion on February 5, 2016, explaining its
summary judgment ruling. The trial court reasoned that the Agreements
explicitly stated that the consideration for the non-solicitation provisions was
“the compensation and benefits to be paid or provided.” Trial Ct. Op.,
2/5/16, at 3. Thus, according to the trial court, when Metalico unilaterally
and materially changed the compensation and benefits, consideration for the
non-solicitation provisions failed. Id. The trial court further reasoned that
when the Employment Agreements expired, Medred and Newman were
terminated without cause. Id. at 4. Thereafter, “employment restarted . . .
with none of the provisions of the Employment Agreements.” Id. According
to the trial court, the non-solicitation provisions continued in effect for one
year after the purported termination without cause, that is, until August
2015. Id. Thus, they were no longer in effect when Employees allegedly
solicited Metalico’s customers, suppliers, and/or employees. Id.
On March 7, 2016, Metalico filed a Praecipe for Discontinuance with
respect to all unresolved counts of the complaint. On March 8, 2016,
Metalico filed its notice of appeal from the grant of partial summary
judgment.
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Metalico timely filed a Pa.R.A.P 1925(b) statement, raising the
following issues: (1) the trial court erred by finding that the non-solicitation
provisions were unenforceable for lack of consideration 8; (2) the trial court
erred by finding the non-solicitation provisions could be enforced for only
one year after expiration of the Employment Agreements, rather than for
two years after Medred and Newman resigned; (3) the trial court erred by
resolving material issues of fact and inferences in favor of ARM and the
Employees; and (4) the trial court erred by granting summary judgment to
ARM and the Employees on grounds not raised by them in their motion and
brief, without giving the parties an adequate opportunity to develop the
record on summary judgment. Metalico’s Pa.R.A.P. 1925(b) Statement,
3/21/16.
The trial court issued a Pa.R.A.P. 1925(a) opinion on June 30, 2016.
The court reiterated its conclusions that (1) Metalico “changed the material
terms of the agreement” when the Employment Agreements expired, and
thus consideration for the non-solicitation provisions failed; and (2) when
the Agreements were not renewed, “Newman and Medred’s employment was
terminated without cause given and replaced by a new at will employment
under different, inconsistent terms.” Trial Ct. Op., 6/30/16, at 7. The trial
court further responded that it was not able to identify which material fact(s)
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8
Metalico broke this purported error into three listed issues, but all of them
related to consideration.
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Metalico thought it resolved, and it was not aware of any such facts. Id. at
8. Finally, the trial court rejected the claim that its rationale differed from
the grounds raised in the motion for summary judgment:
In their Brief in Support of Motion for Partial Summary
Judgment, Newman and Medred argued that Metalico’s
agreement to terminate the 2011 Employment Agreements and
to replace them with new at will relationships constituted
novations that extinguished the terms of the non-solicitation
covenants. Newman and Medred argued in their brief that one of
the elements for a novation of a contract was the displacement
and extinction of consideration. Buttonwood Farms, Inc. v.
Carson, 478 A.2d 484, 487 (Pa. Super. 1984), citing Yoder v.
T.F. Scholes, Inc., 173 A.2d 120, 121-22 (Pa. 1961). We
agreed and found that because Metalico disavowed its obligation
to continue to provide the benefits to Newman and Medred
under the Employment Agreements, the non-solicitation
covenants failed for lack of consideration.
Id. at 8-9.
In this appeal, Metalico raises the following issues, as stated in its
brief:
Did the Trial Court err, as a matter of law, by holding that
the non-solicitation covenants in the employment agreements of
Newman and Medred, which were supported by adequate
consideration when Newman and Medred were first hired,
subsequently became unenforceable for lack of consideration
merely because the employment agreements expired and
Newman and Medred continued as at-will employees?
Did the Trial Court err, as a matter of law, in granting
summary judgment . . . by resolving material disputes of facts
and inferences in favor of [ARM and the Employees] and against
Metalico when it found there were material changes to the
employment of Newman and Medred after they became at-will
employees?
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Metalico’s Brief at 8-9.9
Our standard of review for a trial court’s order granting summary
judgment is as follows:
A reviewing court may disturb the order of the trial court only
where it is established that the court committed an error of law
or abused its discretion. As with all questions of law, our review
is plenary.
In evaluating the trial court’s decision to enter summary
judgment, we focus on the legal standard articulated in the
summary judgment rule. Pa.R.C.P. 1035.2. The rule states that
where there is no genuine issue of material fact and the moving
party is entitled to relief as a matter of law, summary judgment
may be entered. Where the non-moving party bears the burden
of proof on an issue, he may not merely rely on his pleadings or
answers in order to survive summary judgment. Failure of a
nonmoving party to adduce sufficient evidence on an issue
essential to his case and on which it bears the burden of proof
establishes the entitlement of the moving party to judgment as a
matter of law. Lastly, we will view the record in the light most
favorable to the non-moving party, and all doubts as to the
existence of a genuine issue of material fact must be resolved
against the moving party.
Socko v. Mid-Atl. Sys. of CPA, Inc., 99 A.3d 928, 930 (Pa. Super. 2014)
(citation omitted), aff’d, 126 A.3d 1266 (Pa. 2015).
In its first issue, Metalico argues that the trial court erred in finding
that consideration for the non-solicitation provisions failed. The Supreme
Court of Pennsylvania has stated:
[I]n Pennsylvania, restrictive covenants are enforceable only if
they are: (1) ancillary to an employment relationship between
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9
Metalico has also filed an application to amend the reproduced record. We
grant that application.
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an employee and an employer; (2) supported by adequate
consideration; (3) the restrictions are reasonably limited in
duration and geographic extent; and (4) the restrictions are
designed to protect the legitimate interests of the employer.
Socko, 126 A.3d at 1274. The only one of these elements at issue in this
appeal is the second: whether the non-solicitation provisions in the
Employment Agreements were supported by adequate consideration.
As the trial court recognized, “under Pennsylvania law, adequate
consideration is found where a restrictive covenant is signed as part of the
initial employment relationship.” Trial Ct. Op., 6/30/16, at 6 (citing Pulse
Techs., Inc. v. Notaro, 67 A.3d 778, 781 (Pa. 2013)). Further, “it is
possible for a non-solicitation covenant to survive the end of a term of an
employment contract, when the employee stays on as an at-will employee.”
Trial Ct. Op., 6/30/16, at 6-7 (citing Boyce v. Smith-Edwards-Dunlap
Co., 580 A.2d 1382 (Pa. Super. 1990), appeal denied, 593 A.2d 413 (Pa.
1991)).
In Boyce, the employer and employee entered into a three-year
contract with restrictive covenants that applied “both during and for a two-
year period after the period of [the employee’s] employment by Employer
. . . (whether pursuant to this Agreement or otherwise).” Boyce, 580 A.2d
at 1384. The contract also stated, “It is expressly understood by the parties
to this Agreement that certain provisions, rights and obligations pursuant to
this Agreement, are expressly meant to survive the termination date of this
Agreement and shall be given full effect pursuant to their terms.” Id. After
the contract expired, Boyce continued to work for the employer for more
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than two years, and then began working for a competitor. Id. at 1385. In
the ensuing litigation, Boyce claimed that he was no longer bound by the
restrictive covenants because they expired two years after his contract
expired. Id. at 1387. This Court disagreed, holding that under the terms of
the contract, Boyce was bound by the covenants for two years following his
employment, “whether pursuant to this Agreement or otherwise.” Id.
The trial court concluded that this case differs from Boyce because
here, “employment did not continue as before. Rather, Metalico changed
the material terms of the agreement” because it employed Newman and
Medred as employees at will under different terms than those that had
applied during their three-year term under the Employment Agreements.
Trial Ct. Op., 6/30/16, at 7; see also Appellees’ Brief at 28-29. We
disagree. In Boyce, this Court did not hold that application of the restrictive
covenants depended on whether the terms of employment continued as
before or materially changed. Rather, in holding that Boyce was bound by
the restrictive covenants in his employment contract while working for the
employer after the contract expired, we relied only on the explicit language
in the contract. Thus, Boyce does not support the trial court’s rationale.
The language of the Metalico Employment Agreements anticipated
three relevant time periods when Newman and Medred would be subject to
the restrictive covenants. First, they would be subject to the covenants
during the three-year terms of their employment under the Agreements, as
well as during any renewal of those terms. See Employment Agreements,
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§§ 8(b) (making the covenants applicable during the “Employment Period”),
1 & 2(b) (defining “Employment Period” to mean three-year term plus any
renewals). Second, they would be subject to the covenants during any
continued employment with Metalico after expiration of their terms under
the Employment Agreements, at the time when they were employees at will.
See id. § 9(b) (if employment under the Agreement “expires,” the
Agreement continues in effect “as is necessary or appropriate to enforce” the
covenants in Section 8).10 Third, they would be subject to the covenants
for one or two years after they left Metalico’s employment, depending on the
reason why they left. See id. § 8(b)(ii), (iii) (providing that the relevant
covenants apply during the “Post-Employment Period”), 1 (defining the
“Post-Employment Period” as a time running one or two years from “the last
day of the Executive’s employment by the Employer”). See also id. § 9(b)
(Agreement continues in effect for enforcement of covenants after
employment expires or is terminated).11 Notably, this period runs from the
“last day of the Executive’s employment by the Employer” (thus including
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10
Employment under the Agreements would expire when the three-year
term ended. See Employment Agreements, § 2(b). The Agreements
contemplated, however, that employment could continue after expiration of
the Agreements’ terms. See, e.g., id. § 6(e)(1) (discussing voluntary
termination “after the Employment Period”).
11
Because both Newman and Medred are accused of violating the covenants
within one year of leaving employment by Metalico, it is not necessary here
to determine whether the one- or two-year period is applicable.
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the time of employment at will), and not from the date when the three-year
term of employment under the Employment Agreements ended. See id. §§
1, 2(b) (defining “Post-Employment Period” and “Termination Date”).12
In sum, the specific language of the Employment Agreements made
the restrictive covenants apply to Newman and Medred both throughout the
time of their employment by Metalico and in the relevant time at issue here
after they left Metalico’s employ. Indeed, this case resembles Boyce, 580
A.2d at 1384, in that, like the contract in Boyce, the Metalico Employment
Agreements contain a special provision, Section 9(b), that reinforces the fact
that the non-solicitation covenants survive termination of the contract. We
find this language controlling. See generally Synthes USA Sales, LLC v.
Harrison, 83 A.3d 242, 250 (Pa. Super. 2013) (“In construing a restrictive
covenant, ‘courts do not assume that a contract’s language was chosen
carelessly, nor do they assume that the parties were ignorant of the
meaning of the language they employed’” (citations and brackets omitted)).
Therefore, under Boyce, Newman and Medred were subject to the
covenants’ terms.
The trial court held, however, that the Employees’ transition to at-will
employment following the end of their three-year contract terms wiped away
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12
The Agreements also provided for extension of the period of the
covenants’ coverage. See Employment Agreements § 8(b) (penultimate
paragraph) (“The period of time applicable to any covenant in this § 8(b) will
be extended by the duration of any violation by the Executive of such
covenant . . .”).
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the restrictive covenants because such covenants were not specific terms of
the at-will employment relationship. Trial Ct. Op., 2/5/16, at 3-4. Without
explicitly holding that a novation had occurred, 13 the trial court, citing
Buttonwood Farms, 478 A.2d at 487, stated that “one of the elements for
a novation of a contract [is] the displacement and extinction of
consideration.” Trial Ct. Op., 6/30/16, at 9. In the trial court’s view, the fact
that the compensation and benefits under the at-will arrangement were
different from the terms of the Employment Agreements meant that the
consideration for the restrictive covenants failed. In the trial court’s words,
“Metalico’s failure to continue the compensation and benefits provided under
the contract invalidated the non-solicitation clause. Metalico cannot claim
the benefit of its bargain while denying its employees the same.” Id. at 7.
Once again, we disagree.
The Metalico Employment Agreements set forth the restrictive
covenants in Section 8(b) and, under Sections 8(b) and 9(b), made them
applicable both after the Agreements’ expiration and during a one- or two-
year “Post-Employment Period.” They recited that the Employees agreed to
those covenants “in consideration of the compensation and benefits to be
paid or provided by the Employer.” Employment Agreements § 8(b). There
is no dispute that Metalico paid that compensation and those benefits to
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13
ARM and the Employees acknowledge that the trial court “did not base its
decision on a finding that a novation had occurred.” Appellees’ Brief at 26.
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Newman and Medred throughout the Agreements’ three-year terms.
Therefore, contrary to the trial court’s decision, there was no failure of
consideration. “Failure of consideration . . . shows that the consideration
contemplated was never received.” McGuire v. Schneider, Inc., 534 A.2d
115, 1119 (Pa. Super. 1987), aff’d, 548 A.2d 1223 (Pa. 1988). Here,
Newman and Medred received the consideration they were promised in the
Agreements, and, in return, they continue to be bound by the Agreements’
restrictive covenants for the full period — both after the expiration of their
three-year terms, and after their at-will employment — during which they
agreed to be bound under Sections 8(b) and 9(b). Newman and Medred
specifically acknowledged the importance of the non-competition provisions
to Metalico, see Employment Agreements, § 8(a), 9(b), and the contention
that these essential terms would evaporate merely because Metalico agreed
to retain Newman and Medred on its payroll under a different contractual
arrangement once the three-year Agreements expired is unsupported by
anything in the Agreements or the parties’ employment relationship.
The trial court’s reliance on Buttonwood Farms was misplaced. In
Buttonwood Farms, this Court explained:
The required essentials of a novation are the displacement and
extinction of a valid contract, the substitution for it of a valid
new contract, a sufficient legal consideration for the new
contract, and the consent of the parties. The party asserting a
novation or substituted contract has the burden of proving that
the parties intended to discharge the earlier contract.
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478 A.2d at 486 (citations, quotation marks, ellipsis, and italics removed). A
novation, or substituted agreement, extinguishes all rights and duties under
the earlier agreement. Id. However, contrary to the trial court’s opinion,
“the displacement and extinction of consideration” is not one of the elements
of a novation. See id. Because the trial court did not find that all elements
of a novation were present, Buttonwood Farms does not apply here. The
trial court cites no other authority for its holding.
In their brief, ARM and the Employees rely on Innoviant Pharm. Inc.
v. Morganstern, 390 F. Supp. 2d 179 (N.D.N.Y. 2005) (applying
Pennsylvania law), but Innoviant is factually distinguishable from this
case.14 In Innoviant, Morganstern signed an employment agreement with
restrictive covenants. Id. at 184. Approximately two years later, the
employer required Morganstern to sign a written document acknowledging
that he had no employment contract with the employer. Id. at 185. After
Morganstern resigned the next year, the District Court held that the
restrictive covenants were not enforceable. Id. at 193. The court
acknowledged that, “under Pennsylvania law an intent to terminate a
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14
Innoviant is not binding on this Court. See Branham v. Rohm and
Haas Co., 19 A.3d 1094, 1103 (Pa. Super. 2011) (“This Court is not bound
by the decisions of federal courts, other than the United States Supreme
Court, . . . on a matter of Pennsylvania law”), appeal denied, 42 A.3d 289
(Pa. 2012). We also do not find Appellees’ reliance on numerous cases from
other jurisdictions that do not apply Pennsylvania law to be helpful in
resolving the issues in this appeal.
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contractual agreement must be mutual, and demonstrated by clear, precise
and convincing evidence that the parties agree to terminate the contract.”
Id. (quotation marks and citations omitted). The court found that the
parties’ intent to reform the contract was clear because (1) the employer
required Morganstern to sign a document acknowledging the non-existence
of any employment contract; and (2) Morganstern signed it. Id. Here, unlike
in Innoviant, Medred and Newman never signed a document disavowing
the Employment Agreements and they never were asked to do so.
Therefore, Innoviant is inapposite.
In sum, we hold that the trial court erred in finding that the non-
solicitation provisions were not applicable because there was a failure of
consideration with respect to them. We therefore reverse the trial court’s
order granting summary judgment in favor of ARM and the Employees.15
Application to amend the reproduced record granted. Order reversed.
Case remanded. Jurisdiction relinquished.
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15
As we reverse on the basis of Metalico’s first issue, we need not address
its second.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/19/2017
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