Summary
In Price Paper and Twine Co. v. Miller, 182 AD2d 748 (2nd Dept. 2002), the court stated that (p. 749), "[r]egardless of the existence of a restrictive covenant between an employee and former employer, courts disfavor any action which sanctions the loss of a person's livelihood... (and) will not impede an employee's ability to compete with a former employer unless the evidence is clear and convincing that it is necessary to protect the trade secrets of the employer or that fraudulent methods were used by the employee.
Summary of this case from Robert Half International Inc. v. RandOpinion
April 20, 1992
Appeal from the Supreme Court, Nassau County (Goldstein, J.).
Ordered that the order is reversed insofar as appealed from, on the law, with costs, and the motion for a preliminary injunction is denied.
The defendant-appellant Robert John Miller is an independent contractor formerly associated with the plaintiff-respondent Price Paper and Twine Company (hereinafter Price), a company which sells paper products to customers in the food service industry. Upon leaving Price, Miller became associated with the defendant-appellant, Wachs Brothers Paper Co., Inc. (hereinafter Wachs), a competitor of Price.
On or about February 23, 1990, the plaintiffs commenced the instant action for a permanent injunction against Miller and Wachs (collectively the defendants) to (1) enjoin the defendants from disclosing or using any of Price's secrets and confidential information, (2) direct Miller to divest himself of, and deliver, all memoranda, books, papers, notebooks, and computer printouts relating to the business and affairs of Price, (3) enjoin the defendants from canvassing, soliciting, accepting business from, or performing services for any of Price's customers who were customers as of February 22, 1990, (4) enjoin the defendants from using or disclosing to any person, firm, association, or other organization, any business information, methods, trade secrets, lists of customers, former customers, prospective customers, or any other confidential information or data obtained or developed by Miller while in Price's employ as either a salaried employee or independent contractor, and (5) enjoin the defendants from endeavoring to take away, directly or indirectly, any customer business from Price and from interfering with Price's business in any way. By order to show cause dated February 23, 1990, Price moved for a preliminary injunction and sought a temporary restraining order pending determination of the motion. The temporary restraining order was granted on February 23, 1990, and, by order dated March 1, 1990, the Supreme Court issued a preliminary injunction granting the aforementioned relief. By order dated March 5, 1990, this court vacated the temporary restraining order, dismissed a purported appeal therefrom, and stayed the preliminary injunction.
On appeal, the defendants argue that the Supreme Court erred in granting Price's motion for a preliminary injunction. We agree.
In order to prevail upon a motion for a preliminary injunction, the moving party has the burden of demonstrating, by clear and convincing evidence, that (1) the movant will succeed on the merits of the action, (2) the movant will suffer irreparable injury absent the issuance of a preliminary injunction, and (3) the balance of equities is in favor of the movant (see, CPLR 6301; Grant Co. v Srogi, 52 N.Y.2d 496; Walter Karl, Inc. v Wood, 137 A.D.2d 22; Family Affair Haircutters v Detling, 110 A.D.2d 745; Zurich Depository Corp. v Gilenson, 121 A.D.2d 443).
Regardless of the existence of a restrictive covenant between an employee and a former employer, courts disfavor any action which sanctions the loss of a person's livelihood (see, Reed, Roberts Assocs. v Strauman, 40 N.Y.2d 303). Courts will not impede an employee's ability to compete with a former employer unless the evidence is clear and convincing that it is necessary to protect the trade secrets of the employer or that fraudulent methods were used by the employee to disparage the employer's business (see, Reed, Roberts Assocs. v Strauman, supra; Walter Karl, Inc. v Wood, supra; Zurich Depository Corp. v Gilenson, supra; Family Affair Haircutters v Detling, supra; Buffalo Imprints v Scinta, 144 A.D.2d 1025; Candler Coffee Corp. v Eigenfeld, 105 Misc.2d 716, affd 87 A.D.2d 569).
Insofar as the information sought to be protected consists of customer lists, it is well established that a court will not enjoin a former employee's use of an employer's customer list where, as here, the customers are all openly engaged in business and where their names and addresses can be found by those engaged in the trade merely by reviewing public documents including telephone directories (see, Reed, Roberts Assocs. v Strauman, supra; Walter Karl, Inc. v Wood, supra; Zurich Depository Corp. v Gilenson, 121 A.D.2d 443, supra; Family Affair Haircutters v Detling, 110 A.D.2d 745, supra; Buffalo Imprints v Scinta, supra; Candler Coffee Corp. v Eigenfeld, supra). Insofar as the information sought to be protected consists of the customers' needs and desires, courts will not enjoin an employee's use of that information where, as here, the information was merely recollections of the employee (see, Walter Karl, Inc. v Wood, supra). Insofar as the information sought to be protected consists of pricing information, there are facts in dispute as to whether Price's prices and the methods used to estimate costs and profit margins are trade secrets (see, Apollo Stationery Co. v Pilmer, 11 Misc.2d 263; Richard M. Krause, Inc. v Gardner, 99 N.Y.S.2d 592). Accordingly, as there are key facts in dispute, the motion for a preliminary injunction is denied (see, Faberge Intl. v Di Pino, 109 A.D.2d 235; Newco Waste Sys. v Swartzenberg, 125 A.D.2d 1004).
In any event, we note that Price has failed to meet its additional burden of proving that it will suffer irreparable injury or that the balance of equities rests with it. Where, as here, a litigant can fully be recompensed by a monetary award, a preliminary injunction will not issue. Further, where it is demonstrated, as here, that the defendants would be likely to suffer more damage than the plaintiffs, a preliminary injunction should not be issued (see, Poling Transp. Corp. v AP Tanker Corp., 84 A.D.2d 796). Therefore, the motion for a preliminary injunction is denied. Sullivan, J.P., Lawrence, Eiber and Pizzuto, JJ., concur.