Opinion
No. 26712
Decided December 15, 1937.
Injunction — Unfair competition — Employee not enjoined from soliciting customers of former employer, when.
In the absence of an express contract not to engage in a competitive pursuit, an employee, upon taking a new employment in a competing business, may solicit for his employer the trade or business of his former customers and will not be enjoined from so doing at the instance of his former employer where there is no disclosure or use of trade secrets or confidential information relative to the trade or business in which he had been engaged and which he had secured in the course of his former employment.
CERTIFIED by the Court Appeals of Hancock county.
The only question presented is whether, upon the record in this case, one who has breached his contract of employment may be restrained by injunction from soliciting or transacting business of a competitive character with the customers of his former employer.
Plaintiff employed the defendants for a period of one year at a stipulated monthly wage to operate plaintiff's truck over a certain route to collect milk and deliver to a certain dairy company. A percentage of the compensation due the producers for milk was deducted by the dairy company and paid to the plaintiff as compensation for hauling and delivering the milk. The record discloses no contract between the milk producers and the plaintiff. Within three months after the execution of the contract between the plaintiff and defendants, some controversy arose, as a result of which the defendants refused to continue longer in the service of the plaintiff. Defendants thereupon procured from the dairy company the designation of a new route which covered a portion of that over which they had previously operated, and the plaintiff employed a third person to collect milk and deliver it to the dairy company. For several years prior to the contract involved in this case, defendants had similarly been engaged in plaintiff's service.
Upon hearing of the case in the Court of Appeals, that court found plaintiff was not entitled to injunctive relief. However, it found its decision to be in conflict with the decision of the Court of Appeals of the First District in the case of French Bros. Bauer Co. v. Townsend Bros. Milk Co., 21 Ohio App. 177, 152 N.E. 675, and thereupon certified the record to this court.
Messrs. Lippincott Lippincott, for appellant.
Mr. James B. Steiner, for appellees.
The services to be performed by the defendants were not unique or extraordinary personal services or of such character as to require special knowledge, skill or ability. On the contrary, upon default the same service could readily be obtained from others. It is quite apparent, therefore, that for the damages suffered as a result of the failure of the defendants to perform the contract in question plaintiff has an adequate remedy at law; in fact, has pursued it.
The only question before the court is whether injunction will lie to restrain defendants from "soliciting, gathering or hauling milk from the customers or producers" along the route previously worked by the defendants as plaintiff's employees. It is our view that the principle applicable is the same whether defendants had wrongfully left the service of the plaintiff before the expiration of the period covered by the contract or, as was their right, had ceased employment at the termination of the contract. The relationship of employer and employee having been terminated, in the absence of a contract not to engage in a competitive pursuit, upon what principle of equity may the defendants be restrained from entering into a similar service either for another or in their own name and right, though in direct competition with their former employer?
As is disclosed by an examination of the numerous cases cited and analyzed in 23 A. L. R., 423, 34 A. L. R., 399 and 54 A.L.R., 350, it is held in the great majority of the cases which have passed upon the question, and certainly in the best considered decisions, that in the absence of an express contract, on taking a new employment in a competing business an employee may solicit for his new employer the trade or business of his former customers and will not be enjoined from so doing at the instance of his former employer.
Here there was no contract between the parties attempting to control the business activities of the defendants subsequent to the termination of their service with the plaintiff; hence, we are not concerned with those cases in which the rights of the parties, where there is such a contract, were under consideration. The authorities are quite uniform that disclosures of trade secrets by an employee secured by him in the course of confidential employment will be restrained by the process of injunction, and in numerous instances attempts to use for himself or for a new employer information relative to the trade or business in which he had been engaged, such as lists of customers regarded as confidential, have been restrained.
The record in this case, however, discloses that there was no confidential list of customers or other information of a confidential character, nor was any fraud practiced or misrepresentation made by the defendants to procure customers, nor is any claimed. On the contrary, it does appear that defendants made full disclosure of the change of relationship to their customers old and new, many of whom were friends and relatives of the defendants.
This case involves no question of trade secrets or confidential information. True, the decisions are not in accord; but no well considered case has gone so far as to hold that one may be enjoined from seeking to do business with friends, though they become such in the course of and as a result of previous employment.
As said by the court in Fulton Grand Laundry Co. v. Johnson, 140 Md. 359, 117 A. 753, 23 A. L. R., 420: "Under such a rule, a traveling salesman, every time he changed employers, if in a like business, would be compelled to give up all the friends and business acquaintances made during the previous employment. Such a rule would tend to destroy the freedom of employees and to reduce them to a condition of industrial servitude."
The judgment of the Court of Appeals is in all respects affirmed.
Judgment affirmed.
WEYGANDT, C.J., DAY, ZIMMERMAN, WILLIAMS, MYERS and GORMAN, JJ., concur.