Thomas v. Best Mfg. Corp., Division of Tillotson Corp.

• Decision Date: 01 July 1975
• Docket Number: No. 29961,29961
• Citation: 218 S.E.2d 68,234 Ga. 787
• Court: Georgia Supreme Court
• Parties: John W. THOMAS et al. v. BEST MANUFACTURING CORPORATION, DIVISION OF TILLOTSON CORPORATION.

Page 68

218 S.E.2d 68

234 Ga. 787

John W. THOMAS et al. v. BEST MANUFACTURING CORPORATION, DIVISION OF TILLOTSON CORPORATION.

No. 29961.

Supreme Court of Georgia.

July 1, 1975.

Rehearing Denied July 15, 1975.

Kilpatrick, Cody, Rogers, McClatchey & Regenstein, George B. Haley, Jr., Atlanta, Thomas J. Espy, Jr., Summerville, for appellants.

Cook & Palmour, Bobby Lee Cook, A. Cecil Palmour, Summerville, Rogers, Magruder & Hoyt, Dudley B. Magruder, Jr., J. Clinton Sumner, Jr., Rome, for appellee.

UNDERCOFLER, Presiding Justice.

This appeal from an order overruling a motion to dismiss and granting of an interlocutory injunction involves restrictive covenants contained in an employment contract, and the right to protect trade secrets.

Appellant-defendant Thomas is an electrician formerly employed by Appellee-plaintiff Best. The other appellants (defendants) are competing (or potential competing) manufacturers in the making of rubber or vinyl coated gloves the technique for which is the basis of this suit.

The case presents three issues for resolution, the applicable facts for which will be narrated as each issue is addressed.

The issues are: 1. The enforceability of the restraint on employment contained in Appellant Thomas' agreement with Appellee Best. 2. The enforceability of that portion of the same contract pertinent to trade secrets. 3. The right to protection of trade secrets aside from any contractual provision.

1. The pertinent provision of the employment agreement containing the restraint on employment is as follows:

'Employment Agreement. It is not the intention of this agreement to prevent anyone from changing his employment or going into business for himself if he so desires and in any field of his choosing if he believes a change of this sort to be in his best interests. It is the intent of this agreement that the results of work done at Tillotson Corporation and information gained at Tillotson Corporation will not be used as a basis of such a transfer and that confidential or trade secret information will be kept strictly confidential and not used for other than Tillotson Corporation benefit, and in keeping with this intent it is agreed that-in consideration of and as a condition of my employment by Tillotson Corporation (hereinafter called 'Tillotson'): 1. Without Tillotson's express written consent, I will not during my period of employment engage in any employment, occupation or consultation other than for Tillotson in any business in which Tillotson is now, or may hereafter become engaged, and I will not at any time publish or disclose to others or use for my own benefit any research, development, engineering and manufacturing data, plans, designs, formulas, specifications, or other information, pertaining to the business or affairs of Tillotson or any of its clients, customers, consultants, licensees, or affiliates acquired by me during the period of my employment, except to such extent as may be necessary in the ordinary course of performing my particular duties as an employee of Tillotson.'

To restrict an employee from utilizing the experience gained and using information not designated as trade secrets and attempting to extend the restriction beyond the employer's business in perpetuity to that of its clients, customers, consultants, licensees or affiliates without geographic restriction reaches beyond the scope permitted in Georgia in terms of time, territory, and activities protected. Although the employer is attempting to protect confidential information relating to his business, the restraint is so broad as to be unreasonable.

Such agreement has the effect to defeat or lessen competition and is illegal and void. Code Ann. § 2-2701 Const. art. IV, § IV, par. 1; Wake Broadcasters, Inc. v. Crawford, 215 Ga. 862, 114 S.E.2d 26; Taylor Freezer Sales Co. v. Sweden Freezer Eastern Corp., 224 Ga. 160, 160 S.E.2d 356; Ellison v. Labor Pool of America, 228 Ga. 147, 184 S.E.2d 572; Rita Personnel Services Internat. v. Kot, 229 Ga. 314, 191 S.E.2d 79; Durham v. Stand-By Labor of Ga., Inc., 230 Ga. 558, 198 S.E.2d 145.

Therefore that portion of the temporary injunction issued February 26, 1975 that enjoins and restrains the defendant John W. Thomas from violating his employment contract with the plaintiff is contrary to the law of this state and must be set aside.

2. The employment agreement being illegal and void, matters other than trade secrets are without protection because "a man's aptitude, his skill, his dexterity, his manual and mental ability, and such other subjective knowledge as he obtains while in the course of his employment, are not the property of his employer and the right to use and expand these powers remains his property unless curtailed through some restrictive covenant entered into with the employer. Williston on Contracts, § 1646, p. 4627.' Pittsburgh Cut Wire Co. v. Sufrin, 350 Pa. 31, (35), 38 A.2d 33, 34-35; 56 C.J.S. Master and Servant § 72a, p. 484, n. 79.' Outside Carpets, Inc....