Club Aluminum Co. v. Young

160 N.E. 804, 263 Mass. 223, 1928 Mass. LEXIS 1137
CourtMassachusetts Supreme Judicial Court
DecidedApril 3, 1928
StatusPublished
Cited by43 cases

This text of 160 N.E. 804 (Club Aluminum Co. v. Young) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Club Aluminum Co. v. Young, 160 N.E. 804, 263 Mass. 223, 1928 Mass. LEXIS 1137 (Mass. 1928).

Opinion

Rugg, C.J.

These are suits in equity whereby the plaintiff seeks to have two of its former employees enjoined from remaining in the employ of a competitor contrary to the terms of a contract. The defendant in each case demurred to the plaintiff’s bill on the ground of (1) want of equity and (2) the unreasonableness of the terms of the contract as being contrary to public policy. The demurrers were sustained and a final decree entered in each case dismissing the bill. Appeals by the plaintiff bring the cases here.

The allegations in the first bill, which are substantially the same as those of the second bill, are in brief these: The plaintiff is engaged in the manufacture and sale of aluminum cooking utensils, and conducts a large business and has many employees. For some years it has employed a plan of marketing its product, first originated by the officers of its predecessor which involves specialized training and supervision of salesmen, who must acquire expert knowledge in salesmanship, dietetics, hygienics and home economics. This system involves financial loss to the company until the particular salesman has the requisite knowledge. The method of sale consists of inducing some housewife to gather a group of her friends, to which the salesman gives a practical [225]*225demonstration of the advantages of cooking with the plaintiff’s product. Thereafter, the salesman calls upon each person present and endeavors to make a sale. Elaboration of this plan of sale with many laudatory epithets is set forth in the bill. It is averred that an officer of the plaintiff company originated its plan of marketing its product before coming with the plaintiff, and that there are three other companies which have adopted the plaintiff’s plan or a somewhat similar one, but there are many other companies competing with the plaintiff without the use of such plan. The defendant Young entered the employ of the plaintiff as a salesman and remained in such employment for about three months. During this period he “received specialized training and instruction and personal supervision at considerable expense to the plaintiff.” Then, without legal excuse and without the consent of the plaintiff, he left the service of the plaintiff and entered the employment of one of its competitors as a salesman of aluminum cooking utensils by a plan similar to that in use by the plaintiff. Young entered into a written contract whereby he agreed to work for the plaintiff as salesman. One clause of that contract was to the effect that for one year after its termination for any cause Young would “not engage ... in the sale of aluminum cooking utensils by a similar plan” to that used by the plaintiff, “either for himself or for others in the states in which” the plaintiff was operating at the time of the termination of the contract. The question to be decided is whether upon these allegations, which for the purpose of the present discussion must be taken to be true, the plaintiff is entitled to enforce specifically this clause of the agreement.

The governing principles upon this branch of the law have been considered in several recent cases. It was said in Sherman v. Pfefferkorn, 241 Mass. 468, at page 474: “It long has been settled that contracts restraining freedom of employment can be enforced only when they are reasonable and not wider than is necessary for the protection to which the employer is entitled and when not injurious to the public interest. ... As stated by Lord Macnaghten in Nordenfeldt v. Maxim Nordenfeldt Guns & Ammunition Co. Ltd. [226]*226[18943 A. C. 535, 565: ‘The public have an interest in every person’s carrying on his trade freely: so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule. But there are exceptions: restraints of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case. It is a sufficient justification, and indeed it is the only justification, if the restriction is reasonable — reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public. That, I think, is the fair result of all the authorities.’ This rule is in accord with our cases. It must be applied with reference to con-, ditions existing at the time in the particular business concerned.” This principle was applied to the enforcement of a contract for personal employment and specific performance of an agreement restricting within certain limits working for others, in Boston & Suburban Laundry Co. v. O’Reilly, 253 Mass. 94, in Chandler, Gardner & Williams, Inc. v. Farrell, 252 Mass. 341, in Chandler, Gardner & Williams, Inc. v. Reynolds, 250 Mass. 309, and in Edgecomb v. Edmonston, 257 Mass. 12. In all these cases there was not only the element of using for the benefit of another employer information confidentially acquired as to details of business, but also the element of protection to the good will of an established business. The use of the information thus obtained amounted in those cases to a breach of duty. The use of trade or business secrets gained through employment may properly be made the subject of restrictive agreements. In this class fall also agreements not to use lists of customers and not to entice old customers away by any form of solicitation. Knowledge confidentially gained in the course of employment may be made the subject of restrictive agreement and acts in derogation of such a contract will be restrained. But an employer cannot by contract prevent his employee [227]*227from using the skill and intelligence acquired or increased and improved through experience or through instruction received in the course of the employment. The employee may achieve superiority in his particular department by every lawful means at hand, and then,* upon the rightful termination of his contract for service, use that superiority for the benefit of rivals in -trade of his former employer. As was said in Herbert Morris, Ltd. v. Saxelby, [1916] 1 A. C. 688, at page 714, “a man’s aptitudes, his skill, his dexterity, his manual or mental ability . . . ought not to be relinquished by a servant; they are not his master’s property; they are his own property; they are himself. There is no public.interest which compels the rendering of those things dormant or sterile or unavailing; on the contrary, the right to use and expand his powers is advantageous to every citizen, and may be highly so for the country at large.” Mason v. Provident Clothing & Supply Co. Ltd. [1913] A. C. 724. Hepworth Manuf. Co. Ltd. v. Ryott, [1920] 1 Ch. 1.

The bill contains no allegations fairly susceptible of the interpretation that the plaintiff had special proprietary rights in the method or plan employed by it in marketing its product. Of course the plaintiff is entitled to protection against unlawful interference by others with the conduct of its business. But this complaint is not of that nature. The plan described in the bill was not used by the plaintiff alone. It was not hidden from others. It was openly practised both by the plaintiff and of; least three of its competitors in business.

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Bluebook (online)
160 N.E. 804, 263 Mass. 223, 1928 Mass. LEXIS 1137, Counsel Stack Legal Research, https://law.counselstack.com/opinion/club-aluminum-co-v-young-mass-1928.