Summary
holding that customer lists are generally not considered confidential information
Summary of this case from Inst. Drug Sup. Corp. v. Christopher Niall, LLCOpinion
February 3, 2000
Appeal from an order of the Supreme Court (Malone Jr., J.), entered November 19, 1998 in Albany County, which granted plaintiff's motion for a preliminary injunction.
Kenneth J. Munnelly, Albany, for appellants.
Winick Rich P.C. (Abraham Y. Skoff of counsel), New York City, for respondent.
Before: CARDONA, P.J., MERCURE, CREW III, CARPINELLO and GRAFFEO, JJ.
MEMORANDUM AND ORDER
Between February 1996 and August 1998, defendants Francesco Commisso and Mark Musto (hereinafter the individual defendants) were employed as sales representatives by plaintiff, a dental supply company, in its Albany office. In connection therewith, they executed written employment agreements which contained restrictive covenants. After resigning on August 17, 1998, the individual defendants became employed by defendant Patterson Dental Company, one of plaintiff's direct competitors. They opened a new office for Patterson in the same complex as plaintiff's office and were joined by other former employees of plaintiff, resulting in the closing of plaintiff's Albany office.
Plaintiff commenced this action against the individual defendants and Patterson alleging various causes of action and seeking, inter alia, injunctive relief. On November 10, 1998, Supreme Court granted a preliminary injunction and enjoined the individual defendants from competing with plaintiff until the expiration of the 120-day period set forth in the restrictive covenants. The court further enjoined defendants during the pendency of the action from using any information taken from plaintiff including, but not limited to, "customer lists, inventory lists, price lists, ordering frequency information and other proprietary information". Defendants appeal.
Initially, both individual defendants signed written employment agreements which contained restrictive covenants providing that:
EMPLOYEE expressly covenants, promises, and specifically agrees that EMPLOYEE will not, for a period of 120 days after EMPLOYEE'S employment, directly or indirectly be employed by, own, operate, or participate in a dental supply and/or equipment business within * * * [a] 100 mile radius of Albany, N Y
Inasmuch as more than 120 days has expired since the cessation of the individual defendants' employment, defendants' appeal from that part of the order based upon the above limitation is moot (see, A.B. Dick Co. v. Froschauer, 141 A.D.2d 905; see also,Children's Vil. v. Greenburgh Eleven Teachers' Union Fedn. of Teachers, Local 1532, AFT, AFL-CIO, 249 A.D.2d 433, 434). Under the circumstances presented, we perceive no exceptions to the mootness doctrine that would lead us to reach the merits of this issue (see, Matter of Anonymous [Boggs] v. New York City Health Hosps. Corp., 70 N.Y.2d 972, 974).
As to the remainder of the order in which Supreme Court prohibited defendants from using specific information during the pendency the action, plaintiff has not, in our view, made the showing necessary to warrant such relief. "It is the general rule that a preliminary injunction is a drastic remedy and should be issued cautiously" (Rick J. Jarvis Assocs. v. Stotler, 216 A.D.2d 649, 650). To be entitled to a preliminary injunction, the party seeking such relief must demonstrate "(1) the likelihood of success on the merits; (2) irreparable injury absent granting the preliminary injunction; and (3) a balancing of the equities" in that party's favor (W.T. Grant Co. v. Srogi, 52 N.Y.2d 496, 517; see,Matter of McGrath v. Town Bd. of Town of N. Greenbush, 254 A.D.2d 614, 616, lv denied 93 N.Y.2d 803).
Based upon this record, we find that plaintiff has failed to make the requisite showing. Plaintiff's complaint alleges causes of action for, inter alia, breach of fiduciary duty, misappropriation of trade secrets, tortious interference with prospective business relations and unfair competition which are based upon the individual defendants' alleged taking of confidential information concerning plaintiff's customers and use of the information in their employment with Patterson. More particularly, plaintiff has indicated that the subject information consists of plaintiff's "confidential customer list[s] * * * precise discounts given * * * to * * * customers * * * pricing book and information * * * and * * * usage reports * * * detail[ing] ordering and purchase histories".
We note that customer lists are generally not considered confidential information (see, Arnold K. Davis Co. v. Ludemann, 160 A.D.2d 614, 615; Cool Insuring Agency v. Rogers, 125 A.D.2d 758, 759, appeal dismissed 69 N.Y.2d 1037). We also note that "[i]n order to establish * * * confidential customer information status, it [is] incumbent upon plaintiff to demonstrate that its customers are not known in the trade and are discoverable only by extraordinary efforts" (Empire Farm Credit v. Bailey, 239 A.D.2d 855, 856). Plaintiff has failed to prove that such information is not readily discoverable through public sources. As to the remaining information, plaintiff has not put forth sufficient evidentiary proof to show what specific data the individual defendants misappropriated or used in their employ with Patterson. Although plaintiff submitted computer records revealing that Musto downloaded some information around the time he resigned from plaintiff, the records do not disclose the nature of the information. Under the circumstances, we conclude that a preliminary injunction should not have been issued and, therefore, must be vacated (see, Business Networks of N.Y. v. Complete Network Solutions, 265 A.D.2d 194, 696 N.Y.S.2d 433; Arnold K. Davis Co. v. Ludemann, supra; Cool Insuring Agency v. Rogers, supra).
ORDERED that the order is modified, on the law and the facts, with costs to defendants, by reversing so much thereof as enjoined defendants during the pendency of the action from using information, including but not limited to customer lists, inventory lists, price lists, ordering frequency information and other proprietary information; motion denied and preliminary injunction vacated; and, as so modified, affirmed.