Summary
In Gulf Oil Corp. v. Rapp, 33 Misc.2d 1011, 226 N.Y.S.2d 562 (Sup.Ct. 1962), the defendant had been a salesman in plaintiff's employ who negotiated loans, mortgages and contracts with customers on the basis of information available to all of plaintiff's salesmen.
Summary of this case from Haggerty v. Burkey Mills, Inc.Opinion
March 9, 1962
Louis Malin for plaintiff.
Ross Suchoff for defendant.
Plaintiff seeks a temporary injunction to restrain a former employee and others from using information, allegedly secret, acquired by defendant Rapp while he was employed by plaintiff, to induce customers of the plaintiff to purchase their products from the corporate defendant rather than from plaintiff.
Between 1954 and December 14, 1961 Rapp was employed by Harmosa Oil Corp. and its successor, plaintiff herein, as a salesman. Besides performing the ordinary duties of a salesman, it is alleged that Rapp negotiated with customers for such things as contracts, leases, mortgage loans and dealer loans, as a result of which he acquired knowledge of the "confidential and highly secretive" dealings between plaintiff and its customers; that this information, together with similar information acquired by other salesmen of plaintiff, is indexed and is available to all of plaintiff's salesmen; that the index shows, with respect to the customer, the date of pending contracts, commissions, sales allowances and other facts necessary in negotiating and completing a contract in the light of competition by others. It is further alleged that when Rapp left the employ of plaintiff he sent to all the Harmosa customers, which were taken over by the plaintiff, announcement cards which stated that Rapp "formerly with Gulf Oil Corp. and Harmosa Oil Corp.," has become associated with the corporate defendant, distributors of Texaco petroleum products; that Rapp has been visiting the Harmosa customers, concentrating especially upon those whose contracts or leases were about to expire and, knowing of the arrangements between the plaintiff and the customers, immediately offered the customers special inducements to purchase from defendant corporation; that if Rapp did not know what the arrangements were between plaintiff and the customers he would be in the position of any other competitor and would not know where to start or what to do; that by reason of Rapp's actions plaintiff has now lost one of its customers.
Defendant Rapp does not deny the solicitation of plaintiff's customers. He asserts, however, that he is merely applying the experience that he has gained over the years as a salesman and that the information concerning the dealings between plaintiff and its customers are not "confidential and highly secretive."
Even in the absence of any restrictive covenant to keep secret confidential information acquired in the course of employment, an employee even after his employment is duty-bound to refrain from the exploitation of such information ( Friedman v. Stewarts Credit Corp., 26 N.Y.S.2d 529, affd. 261 App. Div. 990, motion for leave to appeal denied 262 App. Div. 746). However, in the absence of a breach of an express contract or a breach of a fiduciary duty or fraud, a former employee may compete with his previous employer, utilizing the experience, competency and efficiency acquired in said employment ( Clark Paper Mfg. Co. v. Stenacher, 236 N.Y. 312). It is thus the secrets of the trade vis-a-vis the skill thereof that the employee may not thereafter utilize to the detriment of his former employer.
Plaintiff concedes that Rapp could not be enjoined from working as a salesman of petroleum products for any of its competitors and further concedes that the names and addresses of its customers are not a trade secret. It asserts, however, that the intimate financial arrangements between it and its customers are confidential — confidential in that if competing firms knew the details thereof they could appraise what inducements they can offer to plaintiff's customers to do business with them rather than with the plaintiff. It is because of this knowledge by Rapp, plaintiff urges, that he should be enjoined from soliciting plaintiff's customers.
A party is not entitled to an injunction unless the right is plain from the undisputed facts. The burden of establishing the clear right to the drastic relief of a temporary injunction is upon the plaintiff ( Pine Hill-Kingston Bus Corp. v. Davis, 225 App. Div. 182; Barricini, Inc. v. Barricini Shoes, 1 A.D.2d 905) ; Park Terrace Caterers v. McDonough, 9 A.D.2d 113). The plaintiff does not establish upon the papers submitted upon this motion that the information utilized by the defendant was secret or confidential. Accordingly, the motion is denied.
Settle order on notice providing for trial for the May 1962 Term of this court and further providing that all preliminary proceedings shall be completed by April 25, 1962.