Opinion
File No. 58523
In an action to restrain the plaintiff's former employee from soliciting orders for sawdust and sweeping compound from customers of the plaintiff, a complaint was good against demurrer, which alleged that the knowledge as to the plaintiff's customers which the defendant obtained while in the plaintiff's employ, and which the defendant was using in competition with the plaintiff, was confidential information and a trade secret. Even in the absence of a restrictive covenant, it is unfair competition and unlawful to a former employee to use confidential information in the nature of trade secrets which he obtained during his employment in competition with his former employer. Accordingly, if in any particular business the list of customers, because of some peculiarity of the business, is in reality a trade secret and an employee has gained knowledge thereof, as a matter of confidence, he will be restrained from using that knowledge against his employer. The court would not hold on demurrer, as a matter of law, that the knowledge with respect to the plaintiff's customers which the defendant was alleged to have acquired and improperly employed, was not a trade secret.
MEMORANDUM FILED JUNE 19, 1940.
William T. Holleran, of New Haven, for the Plaintiff.
Franklin Coeller, of New Haven, for the Defendant.
Memorandum of decision on demurrer.
This is an action to restrain the defendant from soliciting orders for sawdust and sweeping compound from customers of the plaintiff with whose names and needs he became acquainted by reason of his former employment by the plaintiff.
It is well settled that, even in the absence of a restrictive covenant, it is unfair competition and, therefore, unlawful for a former employee to use confidential information in the nature of trade secrets which he obtained during his employment in competition with his former employer, after his employment has ceased. Accordingly, if in any particular business the list of customers, because of some peculiarity of the business, is in reality a trade secret and an employee has gained knowledge thereof, as a matter of confidence, he will be restrained from using that knowledge against his employer. Nims, Unfair Competition (3rd ed. 1929) § 150; Anno. 23 A.L.R. 423.
In the complaint in this action, it is alleged that the knowledge as to the plaintiff's customers which the defendant obtained while in the plaintiff's employ and which the defendant is now using in competition with the plaintiff was confidential information and was a trade secret. Although on the trial it may turn out as a matter of fact that this is not so, it certainly cannot be held on demurrer that, as a matter of law, such information in this particular set up was not such a trade secret.