Kelite Products v. Brandt
| Decision Date | 07 March 1956 |
| Citation | 294 P.2d 320,206 Or. 636 |
| Parties | KELITE PRODUCTS, Inc., a corporation, Respondent, v. Victor L. BRANDT and J. J. Westfall, Appellants. |
| Court | Oregon Supreme Court |
William A. Martin, Portland, argued the cause for appellants. On the briefs were Davis, Jensen & Martin and Donald W. McEwen, Portland.
William J. Moshofsky, Portland, argued the cause for respondent. With him on the brief were Koerner, Young, McColloch & Dezendorf, Portland.
Before WARNER, C. J., and TOOZE, LUSK and BRAND, JJ.
This is a suit for injunction, brought by Kelite Products, Inc., a corporation, as plaintiff, against Victor L. Brandt and J. J. Westfall, as defendants, to restrain defendants from soliciting or selling to customers of plaintiff products of a competitor substantially the same or identical to the products sold by plaintiff, and for other relief. The trial court entered a decree in favor of plaintiff; defendants appeal.
Plaintiff is a California corporation authorized to transact its business in Oregon. It has been and is engaged in the business of manufacturing, compounding, developing, perfecting, selling and distributing cleaning, scouring, and maintenance compounds, detergents, fluids, compositions, abrasives, polishing and paint removal materials. Plaintiff maintains a place of business in Portland, Multnomah county, Oregon, and through advertising and other means has built up a substantial customer clientele in Portland and vicinity. The business in which plaintiff is engaged is highly competitive, and there are numerous other business concerns in Portland selling products substantially the same as or identical to plaintiff's products.
On October 17, 1950, the defendant Brandt entered into a written contract of employment with plaintiff, whereby Brandt was employed as a service engineer and sales representative for plaintiff in the area in and about the city of Portland (Brandt had signed a similar agreement in 1943). The material portions of the contract are the following:
'(a) If employed in a sales capacity, to furnish on demand, at any time during my employment, to Kelite Products, Inc., a complete list of the correct names and places of business of all its customers served by me and located within any or all territories to which I am assigned; immediately notify the Corporation of the name and address of any new customer and report all changes of location of old customers, so that upon the termination of my employment the Corporation will have a complete list of the correct names and addresses of all its customers with which it has dealt.
'(b) If employed in any other capacity during or as a result of which I obtain or am entrusted with any secret information, confidential knowledge or other like data, such as formulae, manufacturing or compounding processes, types and kinds of raw materials used in the manufacture of the Corporation's products, and the suppliers and costs thereof, to at any time, on demand while so employed, advise and acquaint the Corporation of all such information possessed by or entrusted to me so that it may know at all times the extent to which knowledge of secret or confidential information is possessed and being utilized by me.
'(c) In the event of the termination of my employment, either voluntarily or involuntarily (in either of which events the Corporation, on the one hand, and I on the other, shall be entitled to two weeks notice), to surrender to the Corporation, as a prior condition to my receiving my final wage or salary check, all books, records or notes containing lists of customers, and addresses, served by and assigned to me in any territory, all duplicate invoices or statements pertaining to such customers, and all other information relative to such customers, their needs, the products of the Corporation used by them, the schedules of sales calls upon them, all formulae, code books, price lists, product manuals and equipment, processing and compounding information or instructions, data applicable to methods of manufacture, types, kinds, suppliers and costs of raw materials, and any other information of a confidential or secret nature applicable to the business of the Corporation, its customers, and the manner of conducting its business.
'(d) That I will not solicit the purchase of industrial chemicals, cleaning compounds or detergents by any of the customers of the Corporation or its successors, either for myself or as an employee of any other person or corporation, nor in any manner attempt to induce any of the customers of the Corporation to withdraw their custom from it or its successors, nor disclose to anyone any secret knowledge or confidential information obtained by or entrusted to me concerning customers, lists thereof, sales procedure, product formulae, processing or compounding information or instructions, methods of manufacture, types, kinds, suppliers and costs of raw materials, or any other like information of which I may be informed or that may be contained in any territory sales book, sales manual, code book, notes, records or documents, either during my employment, after my employment shall cease, or in contemplation of the cessation of my employment, and if I threaten or attempt to do any of the foregoing, then, in any suit that may be commenced by the Corporation, or its successors for the violation of this contract in that respect, I agree that an order may be made in such suit enjoining me from violating any of the provisions of this agreement, and an order to that effect may be made pending the litigation, as well as upon final determination thereof, and said application for such injunction shall be without prejudice to any other right of action which may accrue to the Corporation or its successors by reason of the breach of this contract on my part.'
On January 7, 1952, the defendant Westfall entered into a similar written contract with plaintiff; in fact, the two contracts are in precisely the same wording.
When defendants assumed the duties of their employment, there was immediately delivered to them by plaintiff a complete list of plaintiff's then customers located in Portland and vicinity, which showed the dates of purchases made by such customers of plaintiff's products and the types of products purchased. When securing new customers, as well as in selling to old customers, it was the duty of defendants to keep up to date this list and the data therein contained, adding the names of any new customers they secured.
Defendants carried on the duties of their employment in Portland and vicinity until January 3, 1953. Under date of December 20, 1952, by written notice to plaintiff, each defendant formally resigned his position, such resignation to be effective January 3, 1953, and on that date ceased working for plaintiff.
Even before terminating their employment relationship with plaintiff, defendants had arranged to serve as sales representatives of Greater Mountain Chemical Company, a competitor of plaintiff, in and about Portland, and immediately upon termination of their employment with plaintiff became associated with and proceeded to sell the products of Greater Mountain Chemical Company in and about the city of Portland, to customers of plaintiff. We quote from the testimony of defendants. Defendant Brandt on cross-examination, testified as follows:
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