Summary
In Horowitz Co. v. Cooper, 352 Pa. 7, several officials of the plaintiff company left the company and joined with others to form a new business.
Summary of this case from Spring Steels, Inc. v. MolloyOpinion
March 19, 1945.
April 9, 1945.
Equity — Injunctions — Preliminary — Formation of new enterprise by employees of plaintiff — Fraud or unfair competition — Proof.
In a proceeding in equity, in which it appeared, inter alia, that plaintiff operated a factory; that several of the defendants, who were executives of the plaintiff company, left plaintiff's employ and joined with others in forming a new business enterprise; and that there was no proof of fraud or deception on part of defendants or unfair competition, or that equitable relief was necessary to prevent irreparable injury to plaintiff's business or its physical property; it was Held that the court below properly refused a preliminary injunction to restrain defendants from employing any persons alleged to have left plaintiff's service by illegal means, from using certain alleged lists of names and addresses of plaintiff's suppliers, employees and customers, and from unfair competition.
Argued March 19, 1945.
Before MAXEY, C. J., DREW, LINN, STERN, PATTERSON, STEARNE and JONES, JJ.
Appeal, No. 98, Jan. T., 1945, from decree of C. P., Blair Co., No. 1445, in equity, in case of Vincent Horwitz Company, Inc. v. Bert Cooper et al. Decree affirmed.
Bill in equity.
The facts are stated in the opinion by PATTERSON, P. J., of the court below, as follows:
November 24, 1944, plaintiff filed a bill in equity praying for a preliminary injunction, in the first instance, and perpetual thereafter: (1) enjoining and restraining the defendants from continuing an alleged conspiracy to injure the plaintiff, and more particularly from employing any persons alleged to have left the service of the plaintiff by illegal means and through breach of trust and knowing participation therein; from spreading false rumors and the illegal enticement of plaintiff's employes; (2) enjoining the defendants from using certain alleged lists of names and addresses of plaintiff's suppliers, employes, and customers; (3) restraining the defendants from alleged unfair competition with the plaintiff through spreading false rumors, solicitation of plaintiff's employes, inducement of breach of trust on part of plaintiff's employes, the employment of present and former employes of plaintiff induced to leave the plaintiff through such illegal means, the dealing with customers secured through defendants' breach and the inducement of breach of trust, and all other schemes or devices of a similar nature; and (4) for assessment of damages caused by the alleged conspiracy, etc., in the sum of $150,000.00.
Preliminary injunction was refused when it was orally presented in open court November 24th. At that time, upon petition of the plaintiff, the Court fixed December 4th to hear testimony on motion for preliminary injunction. On the day fixed a number of witnesses were called by the plaintiff, who testified concerning the alleged complaints. The testimony was substantially to the effect that the plaintiff had been operating a slipper and shoe factory in Altoona for several years, employing about 180 people; that several of the defendants, who were executives of the plaintiff company, together with the manager, attended a convention in Chicago some time prior to the filing of the bill. Mr. Bing, a shoe store manager in Altoona, also attended the convention, but was not one of their party. Shortly after the return from the Chicago convention Mr. Cooper advised Mr. Bobbe, the manager of the plaintiff company, that he was going to discontinue his services and go into business for himself. A little later another of the defendants informed Mr. Bobbe that he was going to leave the company and go into business for himself. Mr. Bobbe then requested Mr. Cooper to remain with him for some time until he could secure new help. Later he learned that several of the employes intended to leave and go with the defendants in their new business enterprise. He then asked Mr. Cooper to leave immediately. Mr. Bobbe testified that several of the executives have already left his employ to go into business with the defendants' new firm named "Bing Cooper", and that a number of others have indicated their intention to leave when the new firm actually starts operation; that in his opinion the said action on the part of the defendants had already, and in all probability would continue to interfere with the operations and production of the plaintiff company, for the reason that they would not be able to secure additional trained help rapidly enough to take the place of the ones who were leaving. Other witnesses were called who testified concerning certain rumors and talk alleged to have been circulated by the defendants to the effect that a wage cut was contemplated by plaintiff; that by reason of the plaintiff's inability to secure supplies and necessary help it would not be able to continue in business. Further, that some of the defendants had apparently used lists of employes, suppliers and customers, although it was admitted the facts concerning these lists would be available and within the knowledge of executives who had been in the employ of the plaintiff company for many years. They are also available through published lists of suppliers, telephone lists and other catalog and sales publications. It was also admitted that the material damage complained of was wholly speculative and problematical. There was no evidence of any actual damage, except such as would ordinarily arise by reason of the falling off of business on account of the lack of help or loss of customers.
The Court then fixed December 11th as the time for hearing oral arguments, but upon request of the plaintiff the date was postponed until December 12th, when arguments were presented in behalf of the plaintiff and the defendants. In the oral argument the plaintiff reviewed the case thoroughly and presented an ably prepared written brief, urging the Court, in conclusion, to grant the injunction restraining the defendants from continuing the practices complained of, and especially from employing any of the employes of the plaintiff company, within such reasonable period as the Court would see fit to fix. In support of its contention the plaintiff cited the case of Waring v. WDAS Broadcasting Station, 327 Pa. 433, wherein the Supreme Court of Pennsylvania sustained an order of the court of common pleas enjoining the defendant from broadcasting certain records made by the plaintiff. It is significant, however, that the court sustained the injunction in that case on the ground that the plaintiff, as a result of his own labor, talent and effort in interpreting a certain song in the making of a record for sale by stores and other dealers, had established a property right in his own production, each record having stamped thereon a prohibition against rebroadcast; and on the further ground that it was unfair competition, as well as the violation of a private right.
The plaintiff also relied upon the case of International News Service v. Associated Press, reported in 248 U.S. 215, which was quoted at length with approval by the Pennsylvania Supreme Court in the Waring case. In the International News Service case the court restrained the defendant news association from appropriating to its own use, for commercial purposes, the news gathered, prepared and compiled by the plaintiff company as its own. In that case the defendant company induced employes of the plaintiff surreptitiously to furnish and divulge in advance, and by copying plaintiff's news bulletin boards from early editions of newspapers published by members of the plaintiff's association for the general public, and then republishing to its own association members as its own production. The court held that that procedure was unfair competition.
The weakness of the plaintiff's case is that there is no averment or proof of any substantial appropriation of any property right of the plaintiff. The plaintiff has failed to show a right to enjoin the defendants, which is clear both on the law and the facts, or that it is necessary to maintain the status quo in order to avoid the danger of irreparable injury to its business or physical property. There is no proof that the defendants have done anything to establish an unfair competitive business, in that the defendants' action consists of any fraud or deception in its dealings with third parties or consumers. The plaintiff has not cited any law to support its contention that employes who desire to leave the employ of the plaintiff for any reason whatever, which would prohibit their employment by the defendants.
Plaintiff appealed.
Robert C. Haberstroh, with him Martin Goodman and Harold Brown, for appellant.
Samuel H. Jubelirer, with him Jubelirer, Jubelirer Smith, for appellees.
The decree of the court below is affirmed on the opinion of President Judge PATTERSON, appellant to pay the costs.