Woolley's Laundry v. Silva
| Decision Date | 28 November 1939 |
| Citation | 23 N.E.2d 899,304 Mass. 383 |
| Parties | WOOLLEY'S LAUNDRY, INC. v. JOSEPH H. SILVA. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
October 4, 1939.
Present: FIELD, C.
J., LUMMUS, QUA DOLAN, & COX, JJ.
Contract, Of employment. Unlawful Interference. Trade Secret.
A laundry proprietor who furnished a "route man" with a list of the names and addresses of the employer's customers on his route, "in the expectation, not expressed" to the employee, that he "would not disclose or use the same" for his personal gain, did not impart confidential information to the employee and was not entitled later to have him enjoined from soliciting and accepting business from those customers for his own account after he had left the employment without taking away the list except by memory.
BILL IN EQUITY filed in the Superior Court on September 22, 1938. The defendant appealed from a final decree entered by order of Baker, J.
J. L. Murphy, (L.
J. Fisher with him,) for the defendant.
G. A. McLaughlin (C.
S. McLaughlin with him,) for the plaintiff.
The plaintiff, in this bill in equity, seeks to have the defendant enjoined from soliciting the business of any of its known customers and to have determined its damages sustained by reason of the alleged wrongful conduct of the defendant. The case was referred to a master whose report was confirmed by interlocutory decree, and a final decree was entered permanently enjoining the defendant (1) from soliciting the business of customers whose names and addresses were communicated to him by the plaintiff while in its employ and who were served by him while so employed; (2) from accepting and receiving laundry for cleansing from customers of the plaintiff served by him while in its employ whose names and addresses were communicated to him by it; and (3) from interfering in any way, directly or indirectly, with the contractual relations existing between the plaintiff and its customers whose names and addresses were communicated to him while in its employ, the names of said customers, sixty in number, being listed in the decree. The defendant appealed from the final decree. The evidence is not reported.
The master found that in 1925 or 1926 the defendant, who had had no previous experience in the laundry business, entered, as a solicitor collector, and delivery man, the employ of the father of the present president and manager of the plaintiff, who was then conducting a laundry business. The defendant was furnished with a list of names and addresses of the customers of the father in a certain territory and was assigned to a route covering that territory. It was a part of his duty to solicit new customers. About eight or ten years before the bringing of this suit the father died and the plaintiff corporation was formed. It took over the laundry business as it had been conducted by the father, and the defendant "was taken over from the old business as one of its employees." His duties remained the same. Since its organization, the plaintiff has maintained lists of the names and addresses of its customers and a collection and delivery service by means of its trucks. In 1936 the plaintiff acquired another laundry route, added it to the territory then being served by the defendant, and furnished him with the names and addresses of the route customers. In 1938 a "route man" of the plaintiff was discharged and his route was added to the territory of the defendant who was furnished by the plaintiff with the names and addresses of the customers upon that route. The names and addresses of its customers are essential to the success of the plaintiff's business. The father, while he conducted the laundry business, and the plaintiff furnished their employees who performed the duties of "route men," including the defendant, with the names and addresses of their customers, "in the expectation, not expressed to said `route' man, including the defendant, that they, including the defendant, would not disclose or use the same for their personal gain except as such employees." Sometime in 1938 the plaintiff's president and manager, because of an apprehension that the defendant contemplated engaging in the laundry business on his own account, requested him to execute and deliver to the plaintiff a written contract defining his duties as an employee and informed him that it would be necessary for him to execute and deliver such a contract if he wished to remain as an employee. The defendant refused to make such a contract, or any written contract, and left his employment in September, 1938. At that time he informed the president and manager that he intended to engage in the laundry business on his own account and that he claimed as his own such of the customers as had been served by him while in the employment of the plaintiff. He engaged in the laundry business on his own account and is now serving customers in the same territory covered by him while employed by the plaintiff and at the time he left its employ. He solicited for his own account the customers previously served by him, and, as a result of such solicitation, he is now serving for his own account and financial benefit customers whose names and addresses were furnished to him by the father and by the plaintiff. The surnames of forty-seven such customers are detailed in the report, together with the names of thirteen customers whose names and addresses were solicited and secured by the defendant while employed by the father and the plaintiff, all of whom were customers of the plaintiff and as such were served by the defendant up to the time he left the plaintiff's employ. The master found the amount of the average weekly gross receipts of the defendant's business, but stated that he was unable to find what proportion of these receipts had resulted solely from the business obtained by the defendant from the customers named, and that, other than the evidence of the gross receipts, the plaintiff offered no evidence tending to show the measure of damage, if any, sustained by it as a result of the defendant's conduct. There is no finding that the defendant made any misrepresentations to any of the customers or that, in soliciting them, he made use of any list that had been furnished to him. In fact, at the argument it was agreed that the defendant took no list away with him beyond what he carried in his head.
The question to be decided is whether the defendant is wrongfully making use of information in part originally acquired through lists furnished by his former employer but now apparently no longer needed by the defendant, inasmuch as he carries the names in his memory. If no lists were involved, we are of the opinion that the plaintiff could not prevail, and we think this follows from the decisions in Padover v. Axelson, 268 Mass. 148 , May v. Angoff, 272 Mass. 317 , DiAngeles v. Scauzillo, 287 Mass. 291 . It is to be observed that the plaintiff is not attempting to restrain the defendant from violating any express term of a contract, compare Walker Coal & Ice Co. v. Westerman, 263 Mass. 235 , and cases cited, Southern New England Ice Co. v. Ferrero, 295 Mass. 446 , and cases cited; nor is it seeking to have the defendant enjoined from using any list, as such, or to require him to return any list or to divulge the names on such list to the plaintiff. See DiAngeles v. Scauzillo, 287 Mass. 291 .
Out of the mere general relationship of employer and employee certain obligations arise, including that which precludes an employee from using, for his own advantage or that of a rival and to the harm of his employer, confidential information that he has gained in the course of his employment. Aronson v. Orlov, 228 Mass. 1 , 5, and cases cited. "This rests upon the implied contract, growing out of the nature of the relation, that the employee will not after the termination of his service use information gained during the period of his employment to the detriment of his former employer." Aronson v. Orlov, 228 Mass. 1 , 5, and cases cited. Wireless Specialty Apparatus Co. v. Mica Condenser Co. Ltd. 239 Mass. 158 . Padover v. Axelson, 268 Mass.
148, 151. New Method Die & Cut-Out Co. Inc. v. Milton Bradley Co. 289 Mass. 277. Robb v. Green [1895] 2 Q. B. 1; S. C. [1895] 2 Q B. 315. Upon the facts found by the master no implied contract could arise out of the employment merely because the names and addresses of customers were furnished "in the expectation, not expressed to said `route' man, including the defendant, that they . . . would not disclose or use the same for their personal gain except as such employees." New Method Die & Cut-Out Co. Inc. v. Milton Bradley Co. 289 Mass. 277 , 281. On the other hand, the public and the individual have an interest in every person carrying on his trade or occupation freely. Interference with individual liberty of trade, if there is nothing more, is contrary to public policy, and contracts restraining freedom of employment can be enforced only when they are reasonable, not wider than is necessary for the protection to which the employer is entitled, and not injurious to the public interest. Club Aluminum Co. v. Young, 263 Mass. 223 , 225, 226, and cases cited. As was said in the case just cited, on page 226: ...
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