[1] As a general rule "after an employee who worked on a retail delivery route has left the service of his employer, his use of the customer list to solicit business for another person is an unwarranted disclosure of trade secrets." ( George v. Burdusis, 21 Cal.2d 153, 159 [ 130 P.2d 399]; Gloria Ice Cream etc. Co. v. Cowan, 2 Cal.2d 460, 463-464 [ 41 P.2d 340]; Dairy Dale Co. v. Azevedo, 211 Cal. 344, 345 [ 295 P. 10]; Pasadena Ice Co. v. Reeder, 206 Cal. 697, 704 [ 275 P. 944, 276 P. 995]; Peerless Oakland Laundry Co. v. Hickman, 205 Cal.App.2d 556, 559-560 [ 23 Cal.Rptr. 105]; Wallich v. Koren, 80 Cal.App.2d 223, 225 [ 181 P.2d 682]; Santa Monica Ice etc. Co. v. Rossier, 42 Cal.App.2d 467, 471 [ 109 P.2d 382].) [2] A customer list may exist in the memory of the employee as well as in writing.
174 Cal. at page 31, 161 P. at page 992, Ann.Cas.1918C, 1022. To the same effect see Pasadena Ice Co. v. Reeder, 206 Cal. 697, 275 P. 944, 276 P. 995; also George v. Burdusis, 21 Cal.2d 153, 130 P.2d 399. The situation presented in the case at bar appears to come squarely within the doctrines enunciated by the foregoing citation of authority, and in particular, the Burdusis case; and there can be no question but that the evidence supports the findings.
In the prestatutory period, the one use of the term "unfair competition" in the common law that developed outside the area of consumer deception was trade secret misappropriation. ( Scavengers' P. Assn. v. Serv-U-Garbage Co. (1933) 218 Cal. 568; Pasadena Ice Co. v. Reeder (1929) 206 Cal. 697, 703; New MethodLaundry Co. v. MacCann (1916) 174 Cal. 26, 30.) Economically, however, there is a strong similarity between the deceptive misappropriation of a trade name and the form of trade secret misappropriation most common in this court's cases of that period, namely, use of a competitor's customer lists. This becomes apparent when one considers that for a transaction to occur it is not enough for a business to offer a desirable product at a competitive price.
[9] Equitable protection may be invoked against the subsequent use by a former employee of knowledge of the "peculiar likes and fancies and other characteristics" of the former employer's customers where such knowledge will aid him in securing and retaining their business. ( George v. Burdusis,supra, p. 160; Dairy Dale Co. v. Azevedo, 211 Cal. 344, 345 [ 295 P. 10]; Pasadena Ice Co. v. Reeder, 206 Cal. 697, 704 [ 275 P. 944, 276 P. 995].) This rule applies where friendly contact with customers is important to solicitors, a circumstance typical of the so-called "trade route" cases.
( Ex parte Tuttle (1891), 91 Cal. 589, 591 [27 P. 933]; In re McNeal (1939), 32 Cal.App.2d 391, 395-396 [ 89 P.2d 1096].) [14] But because the rights of citizens both to free speech and to engage in a business or follow a profession are constitutionally protected (see U.S. Const., 14th Amend.; Cal. Const. art. I, §§ 1, 3, 9, 13; Gitlow v. New York (1925), 268 U.S. 652, 666 [45 S.Ct. 625, 69 L.Ed 1138]; Stromberg v. California (1931), 283 U.S. 359, 368 [51 S.Ct. 532, 75 L.Ed. 1117]; DeJonge v. Oregon (1937), 299 U.S. 353, 364 [57 S.Ct. 255, 81 L.Ed. 278, 283]; Suckow v. Alderson (1920), 182 Cal. 247, 249-250 [187 P. 965]; Pasadena Ice Co. v. Reeder (1929), 206 Cal. 697, 703-704 [ 275 P. 944, 276 P. 995]; Continental Car-Na-Var Corp. v. Moseley (1944), 24 Cal.2d 104, 110 [ 148 P.2d 9]), it is always a judicial question whether any particular regulation of such rights is a valid exercise of legislative powers. (See Ex parte Whitwell (1893), 98 Cal. 73, 78-80 [32 P. 870, 35 Am.St.Rep. 152, 19 L.R.A. 727]; Ex parteDrexel (1905), 147 Cal. 763, 766 [ 82 P. 429, 3 Ann.Cas. 878, 2 L.R.A.N.S. 588]; In re Miller (1912), 162 Cal. 687, 694 [ 124 P. 427]; Ex parte Dickey (1904), 144 Cal. 234 [ 77 P. 924, 103 Am.St. Rep. 82, 1 Ann.Cas. 428, 66 L.R.A. 928]; Frost v. Cityof Los Angeles (1919), 181 Cal. 22 [ 183 P. 342, 6 A.L.R. 468].)
Under this salutary rule, the question then is whether defendants were guilty of unfair competition in soliciting the customers of plaintiff for business in competition with the latter. [5] It is the law that equity will intervene to restrain an employee from divulging confidential information gained in the course of his employment or using such information to his employer's prejudice. ( Pasadena Ice Co. v. Reeder, 206 Cal. 697, 702 [ 275 P. 944, 276 P. 995].) The courts regard as unfair competition, and will enjoin, the use by an employee to the prejudice of his former employer of the confidential information gained by the employee during his prior employment as to the business secrets of such employer.
Under such circumstances, a court of equity will enjoin not only the solicitation of the customers of the first employer but also the acceptance of any orders from them. ( Empire Steam Laundry v. Lozier, 165 Cal. 95 [ 130 P. 1180, Ann. Cas. 1914C, 628, 44 L.R.A.N.S. 1159]; Cornish v. Dickey, 172 Cal. 120 [ 155 P. 629]; New Method Laundry Co. v. MacCann, 174 Cal. 26 [ 161 P. 990, Ann. Cas. 1918C, 1022]; Pasadena Ice Cream Co. v. Reeder, 206 Cal. 697 [ 275 P. 944, 276 P. 995]; Santa MonicaIce etc. Co. v. Rossier, 42 Cal.App.2d 467 [ 109 P.2d 382]; Mackechnie Bread Co. v. Huber, 60 Cal.App. 539 [ 213 P. 285].) However, where the customers are wholesale buyers whose names appear in directories, and they are so few in number that anyone might readily discover them, it has been held that the employer's list is not secret and confidential information.
The court held that knowledge so acquired is in the nature of a trade secret or confidential communication, and that the plaintiff was entitled to an injunction restraining the defendant from soliciting persons who were customers of the plaintiff along the route assigned to him by the plaintiff. In Pasadena Ice Co. v. Reeder, 206 Cal. 697, 275 P. 944, 946, 276 P. 995, that court reviewed its former decisions and reaffirmed its holdings in the Empire Steam Laundry Case. The court quotes with approval the following language from the case of People's Coat, Apron Towel Supply Co. v. Light, 171 A.D. 671, 157 N.Y.S. 15 : "There is no evidence that Light had a written list of them [the plaintiff's customers]. There was in his head what was equivalent.
"Such a use", the court said (page 100), "is contrary to the good faith of the employment, and good faith underlies the whole of an agent's obligations to his principal." In Pasadena Ice Co. v. Reeder, 206 Cal. 697 [ 275 P. 944, 277 P. 995], this court again reviewed the authorities, and reaffirmed the doctrine laid down in the Empire Steam Laundry case, supra. See, also, Dairy Dale Co. v. Azevedo, 211 Cal. 344 [ 295 P. 10]. Other citation seems unnecessary.
The equitable power thus to prevent a person from freely carrying on a lawful business will be exercised with great caution. If, for example, it appears that there were in fact no trade secrets or data regarded as confidential, or that such secrets existed but were unknown to the particular employee; or that no use was made of them by him in the solicitation of business, then no ground for an injunction exists. (See, generally, Pasadena Ice Co. v. Reeder, 206 Cal. 697 [ 275 P. 944, 276 P. 995]; New MethodLaundry Co. v. MacCann, 174 Cal. 26 [ 161 P. 990, Ann. Cas. 1918C, 1022]; Avocado Sales Co. v. Wyse, 122 Cal.App. 627 [ 10 P.2d 485].) Such would be the case where the customers are not scattered members of the public whose identities and addresses are generally unknown, but are retail dealers whose shops are recognizable by anyone, who advertise their businesses openly, and whose identities and addresses can be readily ascertained by a total stranger, by simple observation, or by reference to telephone or business directories.