J.A05035/14


                                2015 PA Super 25

WMI GROUP, INC., WM ROBOTS, LLC,            :     IN THE SUPERIOR COURT OF
AND WM MANAGEMENT GROUP, INC.,              :          PENNSYLVANIA
                                            :
                          Appellants        :
                                            :
                    v.                      :
                                            :
                                            :
CHARLES FOX AND IED DETECTION               :
SYSTEMS, LLC,                               :
                                            :
                          Appellees         :     No. 1550 EDA 2013


                   Appeal from the Order Entered May 24, 2013
              In the Court of Common Pleas of Montgomery County
                        Civil Division No(s).: 2013-11288

BEFORE: ALLEN, JENKINS, and FITZGERALD,* JJ.

OPINION BY FITZGERALD, J.:                        FILED FEBRUARY 06, 2015

        Appellants, WMI Group, Inc., WM Robots, LLC, and WM Management

Group, Inc., appeal from the order entered in the Montgomery County Court

of Common Pleas denying their petition for a temporary restraining order

and preliminary injunction against Appellees, Charles Fox and IED Detection

Systems, LLC.1      Appellants contend the trial court erred by not issuing a

preliminary injunction enjoining Appellees from violating a restrictive

covenant. We hold that Appellants have not established their burden that



*
    Former Justice specially assigned to the Superior Court.
1
    This is an interlocutory appeal as of right. See Pa.R.A.P. 311(a)(4).
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the restrictive covenant binds Fox and, regardless, have not demonstrated

the existence of a trade secret. Given the preliminary nature of the record

and that Appellants’ entitlement to injunctive relief is presently unclear, we

affirm.2

      We state the facts as set forth by the trial court:

           [Appellants] are in the business of marketing and selling
           machine and robotic products, some of which they
           manufacture, and some of which are manufactured by
           other companies.

              On August 6, 2004, [Fox] entered into an employment
           agreement with Wolstenholme Machine, Inc. (WMI).[3]
           Attached to the employment agreement was an
           employment letter on Wolstenholme Machine stationary
           which outlined Fox’s salary, commission, benefits and


2
 Our affirmance is based on the preliminary nature of this record. It is not
a holding on the ultimate merits of Appellants’ claims, which can be
developed more fully prior to trial. As our Supreme Court explained:

           It is somewhat embarrassing to an appellate court to
           discuss the reasons for or against a preliminary decree,
           because generally in such an issue we are not in full
           possession of the case either as to the law or testimony—
           hence our almost invariable rule is to simply affirm
           the decree, or if we reverse it to give only a brief outline
           of our reasons, reserving further discussion until appeal,
           should there be one, from final judgment or decree in law
           or equity.

Summit Towne Ctr., Inc. v. Shoe Show of Rocky Mount, Inc., 573 Pa.
637, 646, 828 A.2d 995, 1000-01 (2003) (emphasis added and citation
omitted).
3
 Although WMI is not one of the named appellants, the parties agree that
WMI is now known as WMI Group, Inc. Appellants’ Brief at 4; Appellees’
Brief at 3.




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         general employment duties. Both of these documents
         were signed by Agit Gene Samsi (hereinafter “Samsi”)
         [who was then the] Vice President General Manager and
         Fox. Section 5 of the 2004 Employment Agreement stated
         as follows:

               NON-COMPETITION

               5.01 During the term of this Agreement and for
               12 months following the termination of
               Employee’s employment, Employee will not,
               without WMI’s prior written consent: (i) accept
               employment with a competitor or in any other
               manner compete with those business activities
               to which the Employee was assigned during the
               24 month [sic] prior to his termination of
               employment with WMI, (ii) solicit any customer
               or potential customer of WMI that Employee or
               his subordinates solicited or serviced for WMI or
               (iii) solicit to leave WMI or hire any individual
               who was an WMI employee during Employee’s
               employment at WMI.

Trial Ct. Op. at 1-2.

      The 2004 Agreement explicitly provided that the non-compete clause

was effective upon termination of the Agreement:

             1.04 This Agreement and all obligations hereunder,
         except for the post-employment obligation, shall
         automatically terminate if and when Employee assumes a
         different position in the Company[4] and signs a new
         Agreement, or upon termination of employment.         The
         post-employment obligations described in Section 4.0 and
         5.0 of the Agreement shall remain in full force and effect
         after this Agreement is terminated.




4
  The 2004 Agreement defined “Company” as Wolstenholme Machine, Inc.,
i.e., WMI. See Appellants’ Prelim. Inj. Hr’g Ex. 3-B.




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Appellants’ Prelim. Inj. Hr’g Ex. 3-B.5 The 2004 Agreement was also binding

upon any successors and assigns to WMI: “This Agreement . . . shall be

binding upon and inure to the benefit of WMI and Employee and their

respective successors and permitted assigns and the Company will require

its successors to expressly assume its obligations under this Agreement . . .

.” Id.

      We continue to quote the trial court’s recitation of the facts:

         Fox’s initial employment duties were to acquire new
         customers and sell products manufactured by [Appellants]
         in their machine shop.

            On January 10, 2007, Fox signed a document on WM
         Robots, LLC stationary titled “Promotion to new Position
         within Company.” The employer listed is A. Gene Samsi
         with WM Management Group, LLC.[6]         This document
         described Fox’s new position as WM Robots’ Sales and
         Business Development Manager and set forth his salary
         and commissions. The document did not contain a non-
         compete provision and did not refer to the non-compete
         provision in the 2004 agreement [with WMI].

Trial Ct. Op. at 2 (citation omitted).

5
  The certified record did not include the preliminary injunction hearing
exhibits. Our Supreme Court held “that where the accuracy of a pertinent
document is undisputed, the Court could consider that document if it was in
the Reproduced Record, even though it was not in the record that had been
transmitted to the Court.” Pa.R.A.P. 1921 note (citing Commonwealth v.
Brown, 617 Pa. 107, 117 n.4, 52 A.3d 1139, 1145 n.4 (2012)). In this
case, because the preliminary hearing exhibits are part of the reproduced
record and neither party has disputed their accuracy, we will consider them.
See id.
6
  WM Management Group, LLC is not a named party.              WM Management
Group, Inc., however, is a party.




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     We reproduce the 2007 document, as follows:

               Promotion to new Position within Company

       Employee: [Fox]

       Employer: A. Gene Samsi with WM Management Group,
       LLC

       Date: 1/10/2007

       Effective Date: 1/1/2007

       This letter is to formalize and define the agreement to
       Promote . . . Fox to the position of WM Robots’ Sales and
       Business Development Manager.

       Responsibilities include, but not limited to, Sales, Sales
       Management, Customer Service & Business Development
       for WM Robots’ products.

       The defined territory for these responsibilities is global with
       the exception of UVSS products with territories reserved
       by BDL Systems Limited (England).

       Products included, but not limited to, Robots (Currently
       [sic] the KNIGHT) and accessories, Wolstenholme
       AeroMed’s HazProbe, BDL Systems’ UVSS, and any other
       WM Robots’ product defined as any product or system sold
       as a WM Management Group’s part number.

       Salary is $70,000 per year with annual reviews in the
       month of December.

       Commissions on all WM Robot products will be 1% of Gross
       Sales with the exception of the KNIGHT product line, which
       will be .5% of Gross Sales. All new sales (sales orders
       received after January 1st, 2007) are subject to this
       commission structure.       In addition to commissions
       received for WM Robots’ products, certain projects
       currently running or pending in WMI and CST are subject
       to a commission of .25% through 2007. These projects
       are listed below . . . .



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Appellants’ Prelim. Inj. Hr’g Ex. 4. As noted above, WM Robots, LLC, is a

different entity than WMI/WMI Group, Inc., in the 2004 agreement.

         Fox’s new position replaced two individuals who left the
         company, and included new responsibilities of working on
         WM Robots’ robotic under-vehicle surveillance and [robotic
         camera]-type equipment.      Fox stopped selling WMI
         products and solely worked on WM Robots’ product lines in
         his new position.

            Later in 2007, WM Robots, LLC contracted with Vallon, a
         German manufacturer of metal detection systems,
         magnetometers and degaussing equipment to represent
         and sell their products in the United States. Fox was
         assigned by Samsi as the sole salesperson for Vallon
         products.     In this new position, Fox established a
         relationship with Vallon and the U.S. Military, the largest
         customer of WM Robots’ Vallon products. Thereafter, 90
         percent of Fox’s sales were devoted to selling Vallon
         products. The annual sales from WM Robots to the U.S.
         Military was approximately $60 million in 2011 and $110
         million in 2012.

            On April 6, 2011, Fox signed a document on WM Robots
         stationary titled “Promotion and Commission Agreement
         Update for Charles Fox.” This document identified Fox’s
         new title as Vice President of Business Development and
         described his commissions. This document was signed by
         Samsi and Fox, and did not contain a non-compete
         provision. Again, no reference was made to the non-
         compete provision in the 2004 agreement between Fox
         and WMI.

Trial Ct. Op. at 2-3.

      We set forth the 2011 document:

         PROMOTION & COMMISSION AGREEMENT UPDATE FOR
         CHARLES FOX

         Effective immediately, Charles Fox has been promoted to
         the new position of Vice President of Business



                                    -6-
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        Development. The following commission rates apply and
        are valid indefinitely:

        All Vallon products: 3% of Gross Sales

        All existing WM Robots’ products: 1% of Gross Sales

        New WM Robots’ products: To be negotiated on a case by
        case basis.

        HazProbe: 1% of Gross Sales

        Wolstenholme Machine Shop Sales related to WM Robots’
        customers: 1% of Gross Sales

        Commission is due upon payment from customer in [sic]
        payable in soonest pay cycle.

Appellants’ Prelim. Inj. Hr’g Ex. 8. WM Robots, LLC—a different entity than

WMI Group, Inc.—is the company listed in the signature blocks of the

agreement. Id.

            In late October 2012, Samsi and Bob Wolstenholme,
        owner of the three companies, presented Fox with a new
        Employment Agreement[,] which included a non-compete
        provision. Fox believed he was not bound by a non-
        compete provision since there was no such provision in the
        April 6, 2011 Employment Agreement. Fox would not
        agree     to    Wolstenholme’s    proposed    non-compete
        restriction.   After failed negotiations, Fox submitted a
        letter of resignation on March 29, 2013, wherein he stated
        “it is my intention to begin a new venture which will
        involve my representation of Vallon GmbH and Cobham
        Technological Services.” Fox intended to actively compete
        with [Appellants] for Vallon’s business. On April 2, 2013,
        Samsi received an email from Dan Dukes, a program
        manager for WM Robots, which was anonymously
        forwarded to him by one of his government contacts who
        had received the email from Fox. The email states, in
        relevant part:




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               If I have assumed correctly, you should have
               received an email from Gene Samsi about my
               resignation from WM Robots. I am creating my
               own company and still will be representing
               VALLON. I will also be representing Cobham
               Technical Services, who manufactures the
               ground penetrating radar portion of the VALLON
               detectors.

                    I am not sure what role WM Robots will have
               with Vallon in the future, but I promise there
               will be no service interruptions. This departure
               from WM Robots was not a rushed decision. My
               company will allow you more flexibility in
               dealing with VALLON, including direct contracts
               if so desired.

          On May 10, 2013, Jürgen Braunstein, sales director for
       Vallon, emailed Samsi and Fox and stated:

                  We informed you in an earlier phase that we
               want to go ahead with Clay [i.e., Charles Fox],
               preferably within WM Robots.

                  This is still our preference. However, Clay
               has his own company now.

                   The legal situation remains to be cleared,
               also for the staff that WM Robots is hiring. As
               long as the legal situation is not clear, we do not
               want to lose any business opportunities.
               Therefore we encourage WM Robots and IED
               Detection Systems to win customers for our
               products. We do not want any confusion for the
               customers and that both parties behave fair.
               Do not do any competition in front of the
               customer. If one party has a new business
               opportunity then the other party should respect
               it and should not try to squeeze in.

          On May 13, 2013, [Appellants] filed a Complaint against
       Fox and his new company, IED Detection Systems, LLC,




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           alleging   breach    of   contract,    misappropriation,[7]
           conversion of trade secrets, tortious interference, unfair
           competition, conversion, and breach of duty of loyalty.
           [Appellants] concurrently filed a Petition for Temporary
           Restraining Order and for Preliminary Injunction.      An
           evidentiary hearing before the undersigned was held on
           May 22, 2013, and an order denying the Petition for
           Temporary Restraining Order and for Preliminary
           Injunction was entered on May 24, 2013. A Notice of
           Appeal to the Superior Court was filed by [Appellants] on
           the same day.

Trial Ct. Op. at 3-4 (footnote omitted).         Appellants timely filed a court-

ordered Pa.R.A.P. 1925(b) statement. Appellants also filed an application for

an injunction pending appeal pursuant to Pa.R.A.P. 1732(b), which this

Court denied on August 19, 2013.8

        Appellants raise the following issues:

           Whether [Appellees] should have been temporarily and
           preliminarily restrained from using [Appellants’] trade
           secrets and confidential information to unfairly compete
           with [Appellants] by stealing (and/or attempting to steal)
           [Appellants’] primary supplier and customers, in violation
           of the restrictive covenants in Fox’s 2004 employment
           agreement and in violation of [PUTSA]?

           Whether Fox’s employment agreement was valid and
           enforceable at the time of [his] resignation, where the
           employment agreement was never terminated or
           superseded by a subsequent agreement during the course
           of [his] employment?

7
  This claim is based upon a violation of the Pennsylvania Uniform Trade
Secrets Act (“PUTSA”), 12 Pa.C.S. §§ 5301-5308, which “displaces
conflicting tort, restitutionary and other law of this Commonwealth providing
civil remedies for misappropriation of a trade secret.” 12 Pa.C.S. § 5308.
8
    Appellants did not file anything under seal with the trial court or this Court.




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         Whether [Appellants’] network of customer contacts,
         customer-related information, marketing relationships
         within the niche (bomb detection device) market, and
         pricing methodology constitute trade secrets under the
         PUTSA, where such information is integral to [Appellants’]
         competitive advantage, required the expenditure of
         significant resources to develop, and is not readily
         ascertainable by [Appellants’] competitors?

         Whether Fox’s solicitation of [Appellants’] primary supplier
         and customers while possessing and using [Appellants’]
         confidential information and trade secrets, in violation of
         the restrictive covenants in Fox’s 2004 employment
         agreement,      constitutes    irreparable    harm    under
         Pennsylvania law?

Appellants’ Brief at 2-3 (reordered to facilitate disposition).

      We summarize Appellants’ arguments for their first two issues.9

Appellants generally allege the trial court was obligated to issue a

preliminary injunction against Appellees.      Appellants suggest that a prior

2004 agreement with WMI, which included a non-compete clause, was not

replaced by the 2007 and 2011 agreements with WM Robots, LLC, each of

9
  Despite raising four issues in their brief, Appellants divide their argument
into only three parts, thus violating Pa.R.A.P. 2119(a), which mandates that
“argument shall be divided into as many parts as there are questions to be
argued.” See Pa.R.A.P. 2119(a). We decline to quash, however. See PHH
Mortg. Corp. v. Powell, 100 A.3d 611, 615 (Pa. Super. 2014) (declining to
quash appeal despite numerous violations of appellate briefing rules); see
also Commonwealth v. Briggs, 608 Pa. 430, 516, 12 A.3d 291, 343
(2011) (“The briefing requirements scrupulously delineated in our appellate
rules are not mere trifling matters of stylistic preference; rather, they
represent a studied determination by our Court and its rules committee of
the most efficacious manner by which appellate review may be conducted so
that a litigant’s right to judicial review as guaranteed by Article V, Section 9
of our Commonwealth’s Constitution may be properly exercised.”).




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which lacked a non-compete clause. Id. at 17. Appellants reason that Fox’s

promotion within WM Robots, LLC, did not void the prior agreement with

WMI.    Id.     Instead, Appellants opine that the trial court should have

disregarded the plain language of the 2007 and 2011 agreements with WM

Robots, LLC, and considered the parties’ intent. Id. That intent, Appellants

insist, was to incorporate the original 2004 agreement with WMI by implicit

reference. Id. To substantiate their unstated intent, Appellants rely upon

parol evidence.     Id. at 19-21.   Appellants alternatively suggest that the

2004 agreement with WMI coexists with the 2007 and 2011 agreements

with WM Robots, LLC. Id. at 17-18 (citing, inter alia, Restatement (First) of

Contracts § 408 (1932)).10 We hold Appellants are not entitled to relief.

       In Synthes USA Sales, LLC v. Harrison, 83 A.3d 242 (Pa. Super.

2013), our Court discussed the applicable standard of review and legal

principles for resolving an appeal from a request for a preliminary injunction:

              Our scope of review is plenary.

                Our review of a trial court’s order granting or
                denying preliminary injunctive relief is highly
                deferential. This highly deferential standard of
                review states that in reviewing the grant or

10
   Appellants cite only one Pennsylvania state case, Robert Grace
Contracting Co. v. Norfolk & W. Ry. Co., 259 Pa. 241, 102 A. 956
(1918), which predates Section 408.           Appellants also cite several
Pennsylvania federal cases, which are not binding on this Court. See
Appellants’ Brief at 17-18. Generally, “federal court decisions do not control
the determinations of the Superior Court.” NASDAQ OMX PHLX, Inc. v.
PennMont Secs., 52 A.3d 296, 303 (Pa. Super. 2012) (citations omitted).




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               denial of a preliminary injunction, an appellate
               court is directed to examine the record to
               determine if there were any apparently
               reasonable grounds for the action of the court
               below.

       An abuse of discretion is not merely an error of judgment,
       but if in reaching a conclusion the law is overridden or
       misapplied, or the judgment exercised is manifestly
       unreasonable, or the result of partiality, prejudice, bias, or
       ill will, as shown by the evidence or the record, discretion
       is abused. We do not inquire into the merits of the
       controversy. Only if it is plain that no grounds exist
       to support the decree or that the rule of law relied
       upon was palpably erroneous or misapplied will we
       interfere with the decision of the trial court.

          A trial court has apparently reasonable grounds for
       granting the extraordinary remedy of preliminary
       injunctive relief if it properly finds that all of the essential
       prerequisites are satisfied.

               There are six essential prerequisites that a party
               must establish prior to obtaining preliminary
               injunctive relief. The party must show: 1) “that
               the injunction is necessary to prevent
               immediate and irreparable harm that cannot be
               adequately compensated by damages”; 2) “that
               greater injury would result from refusing an
               injunction    than    from     granting   it,   and,
               concomitantly, that issuance of an injunction will
               not substantially harm other interested parties
               in the proceedings”; 3) “that a preliminary
               injunction will properly restore the parties to
               their status as it existed immediately prior to
               the alleged wrongful conduct”; 4) “that the
               activity it seeks to restrain is actionable, that its
               right to relief is clear, and that the wrong is
               manifest, or, in other words, must show that it
               is likely to prevail on the merits”; 5) “that the
               injunction it seeks is reasonably suited to abate
               the offending activity”; and, 6) “that a
               preliminary injunction will not adversely affect



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               the public interest.” The burden is on the party
               who requested preliminary injunctive relief.

         A decision addressing a request for a preliminary
         injunction thus requires extensive fact-finding by the trial
         court because the moving party must establish it is likely
         to prevail on the merits. If the moving party’s right to
         relief is unclear, then a preliminary injunction should not
         issue.

Synthes, 83 A.3d at 248-50 (emphasis added and punctuation, footnote,

and citations omitted).   Upon fulfilling all the “essential prerequisites,” the

movant may obtain injunctive relief narrowly tailored to protect the

employer’s legitimate business interest. Three Cnty. Servs., Inc. v. Phila.

Inquirer, 337 Pa. Super. 241, 246, 486 A.2d 997, 1000 (1985) (noting “the

preliminary injunction, if issued, should be no broader than is necessary for

the petitioner’s interim protection”).

            To establish a clear right to relief on a claim for breach
         of restrictive covenants of an employment contract, a
         party must, inter alia, demonstrate the following:

               In Pennsylvania, restrictive covenants are
               enforceable if they are incident to an
               employment relationship between the parties;
               the restrictions imposed by the covenant are
               reasonably necessary for the protection of the
               employer; and the restrictions imposed are
               reasonably limited in duration and geographic
               extent. Our law permits equitable enforcement
               of employee covenants not to compete only so
               far as reasonably necessary for the protection of
               the employer. However, restrictive covenants
               are not favored in Pennsylvania and have been
               historically viewed as a trade restraint that
               prevents a former employee from earning a
               living.



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        Pennsylvania cases have recognized that trade secrets of
        an employer, customer goodwill and specialized training
        and skills acquired from the employer are all legitimate
        interests protectable through a general restrictive
        covenant.      In essence, the court must examine and
        balance the employer’s legitimate business interest, the
        individual’s right to work, the public’s right to unrestrained
        competition, and the right to contract in determining
        whether to enforce a restrictive covenant.

            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. When a writing
        is clear and unequivocal, its meaning must be determined
        by its contents alone. It is not the function of this Court to
        re-write it, or to give it a construction in conflict with the
        accepted and plain meaning of the language used.

               Only where a contract’s language is ambiguous
               may extrinsic or parol evidence be considered to
               determine the intent of the parties. A contract
               contains an ambiguity if it is reasonably
               susceptible of different constructions and
               capable of being understood in more than one
               sense. This question, however, is not resolved
               in a vacuum. Instead, contractual terms are
               ambiguous if they are subject to more than one
               reasonable interpretation when applied to a
               particular set of facts. In the absence of an
               ambiguity, the plain meaning of the agreement
               will be enforced.         The meaning of an
               unambiguous written instrument presents a
               question of law for resolution by the court.

Synthes, 83 A.3d at 250-51 (punctuation and citations omitted).

     Furthermore, with respect to restrictive covenants:

        Courts have consistently held that the taking of
        employment is sufficient consideration for a covenant not
        to compete. Capital Bakers v. Townsend, 426 Pa. 188,
        190, 231 A.2d 292, 293 (1967). An employee’s promotion
        to a new position within the company also constitutes


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        sufficient   consideration.   Jacobson     &   Co.   v.
        International Environment Corp., 427 Pa. 439, 449,
        235 A.2d 612, 618 (1967). However, the covenant must
        be executed contemporaneously with the exchange of
        consideration. Capital Bakers[,] 426 Pa. at 190–91, 231
        A.2d at 293–94. In Capital Bakers, a salesman executed
        a restrictive covenant when he was hired.      He later
        executed a supplementary covenant without any change in
        his employment status. Our Supreme Court refused to
        enforce the second covenant because it was not executed
        contemporaneously with the exchange of consideration.
        The Court allowed enforcement of the original covenant.
        Id.

Records Ctr., Inc. v. Comprehensive Mgmt., Inc., 363 Pa. Super. 79,

84-85, 525 A.2d 433, 435-36 (1987) (emphasis added).

        Strong public policy considerations underlie the conclusion
        that restrictive covenants are not assignable. Given that
        restrictive covenants have been held to impose a restraint
        on an employee’s right to earn a livelihood, they should be
        construed narrowly; and, absent an explicit assignability
        provision, courts should be hesitant to read one into the
        contract.    Moreover, the employer, as drafter of the
        employment contract, is already in the best position to
        include an assignment clause within the terms of the
        employment contract. Similarly, a successor employer is
        free to negotiate new employment contracts with the
        employees . . . or secure the employee’s consent to have
        the prior employment contract remain in effect.

Hess v. Gebhard & Co., 570 Pa. 148, 164-65, 808 A.2d 912, 921 (2002)

(punctuation and citation omitted).

     Instantly, as set forth above, Appellants asked the trial court to

disregard the 2007 and 2011 agreements with WM Robots, LLC, and hold

that the 2004 agreement with WMI controlled.        When Fox terminated

employment with WMI and joined WM Robots, LLC, in 2007, Fox did not



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assume a different position within WMI. See Appellants’ Prelim. Inj. Hr’g Ex.

3-B; cf. Records Ctr., 363 Pa. Super. at 84-85, 525 A.2d at 435-36.

Accordingly, the non-compete clause provision—set forth within the 2004

agreement with WMI—became effective for twelve months. See Appellants’

Prelim. Inj. Hr’g Ex. 3-B; Hess, 570 Pa. at 164-65, 808 A.2d at 921

(mandating     narrow,          stringent    construction       of    restrictive    covenants).

Similarly, absent an applicable, explicit assignment clause, we decline to

impute the non-compete clause to WM Robots, LLC. See Hess, 570 Pa. at

164-65, 808 A.2d at 921.

      Appellants have also asked this Court to rely upon parol evidence to

establish    the     parties’    intent     to    incorporate    by     reference         the   2004

agreement’s non-compete clause.                   But Appellants have not referred this

Court to any ambiguous language such that we may resort to extrinsic and

parol evidence.       See Synthes, 83 A.3d at 248-51.                    Appellants have not

identified   any     contract      language        “reasonably       susceptible     of    different

constructions and capable of being understood in more than one sense.”

See id. Our courts are barred from considering Appellants’ parol evidence

absent the predicate condition of ambiguity. See id.

      As     noted     above,      Appellants       alternatively     relied   on,    inter     alia,

Restatement (First) of Contracts § 408 in support of their proposition that

the 2004 agreement with WMI coexists with the 2007 and 2011 agreements

with WM Robots, LLC. Section 408 states as follows:



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        § 408 Discharge of Duty Under an Earlier Contract by a
        Subsequent Inconsistent Contract

        A contract containing a term inconsistent with a term of an
        earlier contract between the same parties is interpreted
        as including an agreement to rescind the inconsistent
        term in the earlier contract. The parties may or may not
        at the same time agree to rescind all the other provisions
        of the earlier contract. Whether they do this is a question
        of interpretation, except as this rule is qualified by the rule
        stated in § 223.[11]

Restatement (First) of Contracts § 408 (emphases added). Section 408 self-

evidently addresses rescission of an inconsistent term—i.e., a non-compete

clause—in a prior contract between the same parties.          Id.; Wathen v.

Brown, 200 Pa. Super. 620, 624, 189 A.2d 900, 903 (1963) (holding,

“Parties to a contract may rescind it by making a new contract inconsistent

therewith.” (citing Restatement (First) of Contracts § 408)); see also In re

Klugh’s Estate, 362 Pa. 166, 173, 66 A.2d 822, 825 (1949) (“The rule is

well settled that the parties to a contract may rescind it by making a new

contract inconsistent therewith.” (emphasis added and citations omitted)).

     Instantly, Appellants’ argument presumes the parties are identical for

both the earlier and subsequent contracts.     WMI was a party to the 2004

agreement; WM Robots, LLC was not a party. See Appellants’ Prelim. Inj.

Hr’g Ex. 3-B. WM Robots, LLC—not WMI—was a party to the 2007 and 2011

agreements. See Appellants’ Prelim. Inj. Hr’g Ex. 4, Ex. 8. Absent identical

11
   Restatement (First) of Contracts § 223 (1932) addresses the effect of the
statute of frauds.




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parties for the contracts at issue, § 408 is inapplicable and rescission cannot

occur. See Wathen, 200 Pa. Super. at 624, 189 A.2d at 903; Restatement

(First) of Contracts § 408; see also In re Klugh’s Estate, 362 Pa. at 173,

66 A.2d at 825. For these reasons, Appellants are not entitled to relief.

        For their third issue, Appellants contend their pricing method is a trade

secret.    Appellants opine they price their products based upon negotiating

discounts with their customers, profit margins, and “currency hedging,” i.e.,

“hedging against the fluctuation in the exchange rate between the U.S.

Dollar and the Euro.” Appellants’ Brief at 28.12 They claim this “compilation

of information” is a trade secret because the “mixture of those ingredients”

is “unknown outside” of Appellants.          Id. at 29.    The trial court erred,

Appellants suggest, by focusing on the individual ingredients—i.e., the

discounts,    profit   margins,   and   “currency   hedging”—and    not   on   the

combination of those individual ingredients.         Id.   Appellants separately

contend their network of customer contacts, information, and relationships

are also trade secrets. We hold Appellants are due no relief.

        At the preliminary injunction hearing, Appellants testified about their

currency hedging:

           [Samsi13]: WM Robots buys these products from Vallon,
           and we pay for them in euros.     The exchange rate

12
     Appellants did not define “currency hedging” in any of their pleadings.
13
     Samsi is the chief operating officer of WMI.




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J. A05035/14


        fluctuation that is prevalent in the euro is absorbed by WM
        Robots. So in order to maintain a certain level of margin
        of profit, we do what is called currency hedging. And we
        determine an exchange rate for a—let’s say there is a
        quotation or an estimate being supplied by the
        Government. I determine what the exchange rate should
        be so that we cover the period that that particular
        contractor delivery order is going to be open.

N.T. Prelim. Inj. Hr’g, 5/22/13, at 53 (emphasis added).

     The trial court requested clarification from Samsi:

        The court: . . . One of the things I think you mentioned
        about was that [Fox] has unique knowledge as to the
        currency exchange during a transaction.

        [Samsi]: Yes.

        The court: Why would that be so unique? Why wouldn’t
        any person who is sophisticated in international currency
        understand the same logistics that you’re saying he has?

        [Samsi]: Your Honor, it is unique to the extent of how we
        use the exchange rate fluctuation and how we hedge
        against fluctuations and how we price our products; that is
        unique to WM Robots.

        The court: How so? In other words, wouldn’t that be the
        same for anybody who buys and sells internationally?

        [Samsi]: In some form, yes.      They would be able to be
        [sic] do that, yes.

        The court: With respect to the pricing schedule, from what
        I understood . . . , if someone were to make a Freedom of
        Information Request—would they actually see the actual
        contract?

        [Samsi]: They can see the contract, yes, Your Honor.

Id. at 101 (emphases added and capitalization omitted).




                                   - 19 -
J. A05035/14


     During the cross-examination of Fox, the court elicited an example of

currency hedging:

        [Appellants’ counsel]. Part of the way [Appellants] made a
        profit was to figure out how to correctly hit the right
        number of the conversion rate from euros to dollars?

        [Fox]. Yes.

        Q. And you were aware of how . . . WMI, did that?

        A. I was tracking the exchange rate myself. The present
        communication that [Samsi] would have with the
        accountants, dealing with the exchange rates was not . . .
        presented to me.

        The court: Can you give me an example? Let’s use [100
        euros] as to how fluctuation in the exchange rate would
        affect the price, the setting of the price, let’s say a unit
        costs [100 euros].

        [A.] We would get a 20% discount. So the WM Robots’
        cost for that product would then be 80 euros. We would
        take the 100 euro price and look at the exchange rates. If
        the exchange rate—around now, it is about 1.3. So we
        would then take the 1.3 exchange rate and multiply that
        by the euro cost. And we would put out a price of $130.
        And if there were additional discounts, then that would be
        done separately. That would be based on whatever Samsi
        would allow.

        The court: Let me follow this again. Let’s say the price
        from Vallon is 100 euros. There is a discount of 20
        percent, so now it is 80 [euros]. But you’re setting it at a
        1.3 exchange rate, at 130 euros. Does that mean the
        Government would pay 130 euros for the unit?

        [A.] . . . They would pay $130.

        The court: Oh, $130.    What about the discount?     Is that
        just profit?

        [A.] Yes.


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J. A05035/14



         [Appellants’ counsel]: So as you just explained, you were
         aware of how the pricing worked, right?

         A. Yes. But I was not aware of the actual exchange rates
         that Mr. Samsi was getting.

         The court: Would he get a different rate than anyone
         trading in international currency would get?

         [A.] No.

         The court: So I don’t understand your comment that you
         weren’t aware of the rates he was getting. Would [Samsi]
         get a unique rate?

         [A.] Mr. Samsi was the only one that was dealing with the
         accountants to hedge the dollar to the euro. I was not—
         that was not a part of my role or responsibility.

Id. at 146-48 (capitalization omitted); see also id. at 53.

      Fox confirmed that he did not hedge currency on redirect examination:

         [Appellees’ counsel: Y]ou mentioned something called in
         the pricing . . . a “hedging of the rates.” I am a little
         unclear on what that means. In the circumstances of
         pricing, when you’re calculating the conversion rate from
         the euro to the dollar, what does it mean to hedge that
         rate?

         [Fox]. The . . . existing currency conversion rate is only in
         real time. These [sales] contracts [for products] would
         take place or be delivered several months down the road.
         So to properly anticipate what the exchange rate would be
         at the time of delivery or payment from the Government in
         order to make the WM Robots’ payment to Vallon, you
         would enter into hedging contracts to limit your exposure
         to wildly fluctuating exchange rates.

         Q. Who made these hedging decisions?

         A. [Samsi] did.



                                    - 21 -
J. A05035/14


         Q. Do you have any experience in international markets
         that make you qualified to make hedging decisions?

         A. No.

Id. at 186-87. Thus, both Fox and Samsi testified that only Samsi engaged

in currency hedging.14 Id.; accord id. at 53, 148. Samsi also testified that

customer information, contracts, and prices are publicly available.    Id. at

91-94, 101 (agreeing prices publicly available via Freedom of Information

Request).

      To obtain injunctive relief, a party must establish that the information

at issue is a “trade secret,” as that term is defined by PUTSA. 12 Pa.C.S. §

5302; Iron Age Corp. v. Dvorak, 880 A.2d 657, 664 (Pa. Super. 2005)

(affirming denial of preliminary injunction because movant failed to establish

information at issue qualified as trade secret).   The PUTSA defines “trade

secret” as follows:

         “Trade secret.” Information, including a formula, drawing,
         pattern, compilation including a customer list, program,
         device, method, technique or process that:

            (1) Derives independent economic value, actual or
            potential, from not being generally known to, and not
            being readily ascertainable by proper means by, other
            persons who can obtain economic value from its
            disclosure or use.

14
   We note the common occurrence of currency hedging contracts. See,
e.g., Union Steel Mfg. Co. v. United States, 837 F. Supp. 2d. 1307, 1321
(Ct. Int’l Trade 2012) (noting “currency hedging” involves currency swap
contracts); In re Sadia, S.A. Secs. Litig., 643 F. Supp. 2d 521, 523
(S.D.N.Y. 2009) (same).




                                    - 22 -
J. A05035/14



            (2) Is the subject of efforts that are reasonable under
            the circumstances to maintain its secrecy.

12 Pa.C.S. § 5302.      “[I]f a competitor could obtain the information by

legitimate means, it will not be given injunctive protection as a trade secret.”

Shepherd v. Pittsburgh Glass Works, LLC, 25 A.3d 1233, 1245 (Pa.

Super. 2011) (citation omitted).

      Instantly, even assuming the existence of a valid non-compete

agreement, Appellants never raised an argument before the trial court that it

was the unique combination or compilation of information that formed

the basis of the trade secret at issue.       Given Appellants’ emphasis on the

currency hedging alone, we do not fault the trial court for not anticipating

Appellants’ unvoiced compilation-of-information argument.          Accordingly,

because they failed to raise the argument that the compilation or

combination of the instant discounts, profit margins, and currency hedging is

a trade secret, see 12 Pa.C.S. § 5302, Appellants have waived it on appeal.

See Pa.R.A.P. 302 (“Issues not raised in the lower court are waived and

cannot be raised for the first time on appeal.”).          Regardless, currency

hedging is common knowledge and Fox did not engage in such hedging.

N.T. at 53 (Samsi testifying, “I determine” exchange rate), 146-48, 186-87.

Samsi also testified Appellants’ customer information, contracts, and prices

were publicly available. Id. at 91-94, 101. Thus, because such information




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can be obtained via legitimate means, injunctive relief is presently

unavailable.15 See Shepherd, 25 A.3d at 1245.

        Appellants lastly claim the trial court failed to ascertain whether

Appellees’ use of Appellants’ alleged trade secrets constitutes irreparable

harm.     Appellants’ last issue presumes the existence of trade secrets and

thus derives from their third issue.      Because we discern no abuse of

discretion with the trial court’s resolution of Appellants’ third issue, we need

not address it. Accordingly, we affirm.

        Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/6/2015




15
   As noted above, our standard of review for preliminary injunctive relief is
highly deferential. See Summit Towne Ctr., 573 Pa. at 646, 828 A.2d at
1000-01 (stating default position of appellate court is to affirm trial court’s
order resolving request for preliminary injunctive relief); Synthes, 83 A.3d
at 248 (same). Appellants have an opportunity to develop the record further
at trial.




                                     - 24 -
