Callahan v. Rhode Island Oil Co.

240 A.2d 411, 103 R.I. 656, 1968 R.I. LEXIS 845
CourtSupreme Court of Rhode Island
DecidedApril 10, 1968
Docket124-Appeal
StatusPublished
Cited by14 cases

This text of 240 A.2d 411 (Callahan v. Rhode Island Oil Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Callahan v. Rhode Island Oil Co., 240 A.2d 411, 103 R.I. 656, 1968 R.I. LEXIS 845 (R.I. 1968).

Opinion

Eoberts, C. J.

This is a civil action brought to enjoin the defendants’ solicitation of the customers of plaintiff for the sale of products of Quaker State Oil Eefining Corporation, hereinafter referred to as Quaker State, and for an accounting. The cause was heard on its merits by a justice of the superior court as to the defendants, Ehode Island Oil Co., Eobert Eder, and Arthur T. Anthony Decision was for these defendants, and judgment entered thereon. From that judgment the plaintiff prosecuted an appeal to this court.

*657 The record discloses that during the pendency of this appeal Quaker State moved for severance and remand to the superior court of that portion of the issues relating to that defendant. This motion was granted, and those issues are now pending trial in superior court.

An examination of the record discloses no substantial dispute as to the material facts involved in this case. It appears that plaintiff, hereinafter referred to as Callahan, held a non-exclusive distributor agreement with Quaker State for distribution of its petroleum products to retail outlets. It further appears that defendant Anthony was first employed by Callahan in 1961 to act as a salesman servicing a number of Callahan’s accounts. At that time, Anthony testified, Callahan provided him with a list of about 100 accounts to be serviced by him. Each year thereafter he succeeded in acquiring new accounts until, upon leaving Callahan in 1966, he was servicing approximately 250 such accounts.

In October 1966, Anthony told Callahan that he was leaving to take similar employment with Rhode Island Oil Co. Anthony concedes that after entering the employ of Rhode Island, he contacted about one half of the Callahan accounts and that he would have solicited more of these accounts if he had had the time. In other words, Anthony concedes that he had access to the list of Callahan’s accounts and that he did, after going to work with Rhode Island, solicit a substantial portion of these accounts. There is also evidence in the record that all of the accounts on Callahan’s list serviced by Anthony were operators of gasoline stations and other retail automotive dealers who sold the products they purchased from Callahan to the ultimate consumer and that none of Callahan’s accounts was an ultimate consumer. There is further evidence that substantially most retail outlets for such products employ signs indicating that Quaker State’s products are for sale therein.

*658 Callahan contends that the information supplied Anthony concerning a list of his customers partakes of the same confidential nature as was attributed by this court to a list of laundry customers supplied employee drivers in Colonial Laundries, Inc. v. Henry, 48 R. I. 332, 138 Atl. 47. There we held that a route list of a portion of its laundry customers furnished employee drivers by an employing laundry at the beginning of their employment was confidential in nature and that the employer was entitled to enjoin the employees who, after termination of their employment, solicited the customers who comprised that list on behalf of their new business, a competing laundry.

The trial justice in the instant case, noting the extent of the rule set out in Colonial Laundries, found that the list of customers that Callahan furnished defendant Anthony was not confidential in nature. He rested this opinion on the fact that the persons who were listed thereon were all engaged in the business of distributing automotive petroleum products at retail and were easily identifiable as dealers in such products by the advertising displayed on their places of business as well as by an examination of the business listings in telephone directories and other similar directories. The trial justice concluded that Callahan, in effect, was seeking an extension of the rule laid down in Colonial Laundries to customer lists of a character different from the list protected in that case, and refused to restrain either Anthony or Rhode Island from further solicitation of such dealers in petroleum products who were customers of Callahan while Anthony was employed by him.

It may well be that the rule stated in Colonial Laundries was the rule in a minority of jurisdictions at one time. However, it is our opinion that it is now within the purview of a well-recognized exception to the general rule that absent *659 some form of agreement not to compete, 1 the courts will not enjoin the solicitation by a former employee of customers serviced by him when he was so employed. The rule which is now given general recognition and the exception thereto is aptly stated in Carl A. Colteryahn Dairy, Inc. v. Schneider Dairy, 415 Pa. 276, 280, 203 A.2d 469, 471:

“Generally, in the absence of an express contract to the contrary, solicitation of a former employer’s customers, on behalf of another in competition with his former employer, will not be enjoined. This rule has been recognized by numerous text writers and courts. However, even in the absence of such an express agreement, an employer is entitled to equitable protection against the competitive use of confidential and secret information obtained as a result of the trust and confidence of previous employment * * * .”

See also Vendo Co. v. Long, 213 Ga. 774, 102 S.E.2d 173; Renpak, Inc. v. Oppenheimer, Fla. App., 104 So.2d 642.

It would appear then that, Colonial Laundries involving, as it did, a customer list that had been entrusted to the former employees in confidence and within the exception to the general rule referred to above, the trial justice in the instant case did not err in refusing to grant relief by way of injunction to Callahan if the list under consideration was not acquired by Anthony in confidence. The question then is whether the trial justice was correct in finding that the information concerning customer lists which Callahan furnished Anthony was not within the exception to the general rule referred to above.

In our opinion, the list from which Anthony acquired information of Callahan’s customers was properly found to be not confidential and, therefore, differs from the list to which this court extended protection in Colonial Laundries. *660 We think the distinction between these situations is made abundantly clear in Town & Country House & Home Service, Inc. v. Newbery, 3 N.Y.2d 554, 147 N.E.2d 724. There the court, considering whether injunctive relief should be afforded such a list where prior employees had solicited some 25 customers of the plaintiff, who operated a housecleaning service, said, 3 N.Y.2d at 558, 147 N.E.2d 726:

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Bluebook (online)
240 A.2d 411, 103 R.I. 656, 1968 R.I. LEXIS 845, Counsel Stack Legal Research, https://law.counselstack.com/opinion/callahan-v-rhode-island-oil-co-ri-1968.