Opinion
10-23-1951
AETNA BLDG. MAINTENANCE CO., Inc. v. WEST. Civ. 18434.
Matot, Gabrielson & Manley, Los Angeles, for defendant, Arthur J. Manley, Los Angeles. Victor S. Cogen, Los Angeles, for respondent.
AETNA BLDG. MAINTENANCE CO., Inc.
v.
WEST.
Oct. 23, 1951.
Rehearing Denied Nov. 8, 1951.
Hearing Granted Dec. 20, 1951. *
Matot, Gabrielson & Manley, Los Angeles, for defendant, Arthur J. Manley, Los Angeles.
Victor S. Cogen, Los Angeles, for respondent.
MOORE, Presiding Justice.
Respondent was awarded damages resulting from defendant's acts of unfair competition. The latter was enjoined from 'soliciting, diverting or taking away, directly or indirectly, any customers of plaintiff,' from performing work for plaintiff's customers whom defendant had previously persuaded to terminate their contracts with plaintiff, and from divulging confidential information pertaining to plaintiff's customers.
Respondent is a corporation organized January 2, 1948. It then took over the assets and obligations of a partnership of the same name which had been engaged in rendering cleaning and janitorial service to office buildings. All references to 'respondent' will include the partnership as well as the corporation. Prior to the date of his resignation from respondent's employ, appellant had worked for respondent approximately four years as janitor, superintendent and salesman. During such period of service appellant gained a great deal of confidential information pertaining to respondent's equipment, materials used, methods of performance and types of janitorial service rendered satisfactorily and charges made by respondent to its several customers. Also, he gained a detailed knowledge of the costs and time allocations for each job and profit margins and the peculiarities of each patron of respondent.
While in respondent's employ appellant had signed an 'Employment Agreement' whereby he contracted that he 'will not during his employment and for a period of two years subsequent to the termination thereof, directly or indirectly, disclose to any person, firm or corporation, the names, addresses and/or requirements of any customers of the company or any of its branches, and that he will not divulge trade secrets and other business information that he has acquired or that he shall acquire hereafter during the period of his employment.' He further promised, upon leaving respondent's employ to surrender to respondent all lists, books and records of respondent's customers' requirements, and for a period of two years after the termination of his employment not to solicit, serve or cater to any of such customers served in any way by him while in respondent's employment. Also, he agreed to pay such damages as respondent might suffer as a result of his breach of the agreement.
After resigning as such employee of respondent, appellant entered into the building maintenance business for himself and began to solicit the janitorial and window cleaning business of respondent's customers, of whom and of whose requirements appellant had gained a generous knowledge while at work for respondent, and caused them to terminate their contracts with respondent and to enter into new contracts with appellant.
The trial court determined that through the use of trade secrets and confidential information gained while in respondent's employ appellant solicited and enticed away from respondent three valuable accounts and determined that respondent had been damaged by such acts and assessed the damages at $1,467 and enjoined appellant from divulging any confidential information pertaining to respondent's customers and from attempting to induce such customers to leave respondent.
Appellant seeks a reversal on three grounds: (1) there is no evidence to support the finding that there was any solicitation of respondent's customers; (2) there are no trade secrets in a business such as respondent's; (3) the court erred in assessing the damages.
The evidence of appellant's soliciting is ample. His argument to the contrary notwithstanding, the evidence is clear that in the case of each customer that forsook respondent appellant made it a point to inform them that he was leaving Aetna Building Maintenance Company and going into business for himself. An employee of one of respondent's former patrons testified that appellant visited her without invitation at the firm's offices three times after March 1, 1949, and informed her that he was in business for himself. The witness McPherson, an employee of Shell Oil Company, another Aetna customer, testified that after he had learned from Aetna of appellant's retirement from respondent's employ he called appellant who stated to McPherson that he was operating his own janitorial service and would like the Shell contract. In subsequent testimony the witness admitted that he might first have learned of appellant's new business venture from a visit by appellant in April or May, 1949. The court's findings conclusively dispose of appellant's contention that respondent's customers had contacted him and extended an invitation to him to call and discuss a contract for maintenance work. One who is employed by another impliedly promises not to rob his employer; he becomes obligated never to open the familiar vaults of one who has trusted him and direct a meticulous burglar how to lift out the treasured gold. A reading of the contract by its four corners leaves no doubt that appellant thereby agreed to deal honorably with respondent at all times and not at anytime within two years to resort to finagling in order to deprive respondent of his established trade. Although such contract was found to be so wanting in certainty as to render it unfit as the basis for the relief granted, it is clear that its provisions, in general, encompassed only the usual obligations commonly due to an employer from an employee who stands in a fiduciary relationship. The law is loth to give approval to any conduct designed to assist a party to overreach another who has good reason to expect only kindness and fair dealing.
A representative of Bell Brand Foods testified that appellant had told him, prior to leaving respondent's employ, that he was about to enter business for himself; that appellant contacted him later and informed him that he no longer was connected with Aetna; that subsequently when he asked appellant West about janitor work, the latter called on him with two proposed contracts for such service and that they were almost identical with the Aetna agreements.
In each case appellant through his previous position with respondent was thoroughly familiar with the customer's janitorial requirements and the cost of such service, having known and dealt with each customer personally in previous years. The price charged by appellant was in each instance a shade under the contract price charged by Aetna.
From all the testimony, the court was fully justified in its determination that appellant had wrongfully solicited and enticed away Aetna's former clients and that he had been able to accomplish this by reason of his knowledge and use of the information gained while in respondent's employ.
The argument that there are no trade secrets in the building maintenance business is a novel contention. Knowledge of a former employer's customers and their habits, fancies and requirements is held to be a trade secret, even though the identity of the customer might not be so considered. George v. Burdusis, 21 Cal.2d 153, 160, 130 P.2d 399. Likewise is knowledge as to which customer's business is profitable a trade secret. Scavengers' Protective Association v. Serv-U-Garbage Company, 218 Cal. 568, 572-573, 24 P.2d 489. Appellant's knowledge of respondent's customers, their requirements and caprices was detailed and of an important, confidential nature, embracing every facet of the Aetna-customer relationship as opposed to being of a general nature known to all in the trade. See discussion in California Intelligence Bureau v. Cunningham, 83 Cal.App.2d 197, 201, et seq., 188 P.2d 303. Accordingly, equity will not hesitate to restrict its wrongful use when the former employer is thereby being harmed.
Neither is there error in the court's determination that damages should be assessed in the amount of $1,467. The court was not restricted to the $1,000 provided as liquidated damages in the Employment Agreement since that document was found too ambiguous to be enforced. Appellant has not attacked this finding. It follows that the court could assess damages as they proximately arose from appellant's wrong. Such finding is supported by the testimony of the president of respondent that the selling price of such maintenance contracts in the city of Los Angeles was three times the monthly billing to the customer. Herein, the monthly charge to the Shell Oil Company was $135 and that to Bell Brand Foods was $485.
Judgment affirmed.
McCOMB, J., concurs. --------------- * Subsequent opinion 246 P.2d 11.