## Facts

- Verizon and Comcast competed directly in overlapping geographic markets for broadband, internet, cable television, and related services.
- Verizon treated its fiber-optic broadband deployment plans (FiOS) and related pricing and marketing strategies as highly confidential.
- Christopher G. Pizzirani worked at Verizon from 1990 to 2006 and rose to senior broadband leadership roles.
- As a senior executive, Pizzirani had access to Verizon’s non-public broadband strategy, five-year revenue forecasts, product plans, and FiOS deployment, marketing, and pricing information.
- Through Verizon’s long-term incentive program, Pizzirani received restricted and performance stock awards subject to electronically accepted award agreements.
- The award agreements included a 12-month post-employment noncompetition covenant restricting work for companies engaged in defined “competitive activities” in areas where Verizon offered competing products or services.
- Verizon provided repeated electronic notices instructing Pizzirani to review the terms; he electronically affirmed he read, understood, and agreed to the agreements to receive the awards.
- Pizzirani resigned on October 16, 2006 to join Comcast in a senior role related to broadband/online services.
- Verizon sued and sought a preliminary injunction to enforce the noncompete and prevent Pizzirani from working for Comcast during the restricted period.

## Issues

1. Whether the 12-month noncompetition covenant in Verizon’s stock-award agreements was enforceable under Pennsylvania law against a senior executive who accepted it electronically.
2. Whether Verizon met the requirements for a preliminary injunction, including likelihood of success, irreparable harm, balance of harms, and public interest.

## Decision

- The court granted Verizon’s motion for a preliminary injunction.
- The court found Verizon was likely to succeed on the merits that the noncompete was valid, supported by consideration, reasonably limited, and breached by Pizzirani’s Comcast employment.
- The court found Verizon showed irreparable harm from the risk that Pizzirani’s confidential strategic knowledge could be used to Verizon’s competitive disadvantage.
- The court held the balance of hardships favored Verizon given the limited 12-month duration and Pizzirani’s ability to seek other non-competing work.
- The court concluded enforcing the covenant served the public interest in protecting confidential business information and enforcing contracts, despite general interests in employee mobility.

## Legal Principles

- A preliminary injunction requires: (1) likelihood of success on the merits, (2) irreparable harm absent relief, (3) a balance of harms favoring the movant, and (4) consistency with the public interest.
- Under Pennsylvania law, a restrictive covenant is enforceable when it is ancillary to an employment/compensation relationship, supported by adequate consideration, reasonably limited in time and scope, and necessary to protect legitimate business interests (including trade secrets and confidential information).
- Stock-based compensation can supply consideration for a post-employment noncompetition covenant, and electronic assent can form an enforceable agreement when acceptance is tied to receipt of the award and the employee affirmatively agrees to the terms.
- For high-level employees with access to current strategic plans, forecasts, and deployment strategies, threatened competitive use or disclosure of confidential information may constitute irreparable harm not readily compensable by money damages.

## Conclusion

The court preliminarily enforced Verizon’s 12-month noncompete against a departing senior broadband executive who joined a direct competitor, concluding the stock-award covenant was likely enforceable and that Verizon faced irreparable competitive harm from the risk of misuse of confidential strategic information.


Verizon Communications Inc. v. Pizzirani, 462 F. Supp. 2d 648 (E.D. Pa. 2006)