Holiday Food Co. v. Munroe

426 A.2d 814, 37 Conn. Super. Ct. 546, 37 Conn. Supp. 546, 1981 Conn. Super. LEXIS 151
CourtConnecticut Superior Court
DecidedJanuary 9, 1981
DocketFILE NO. 919
StatusPublished
Cited by23 cases

This text of 426 A.2d 814 (Holiday Food Co. v. Munroe) is published on Counsel Stack Legal Research, covering Connecticut Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holiday Food Co. v. Munroe, 426 A.2d 814, 37 Conn. Super. Ct. 546, 37 Conn. Supp. 546, 1981 Conn. Super. LEXIS 151 (Colo. Ct. App. 1981).

Opinions

Bieluch, J.

The plaintiff brought this action seeking an accounting, damages and an injunction restraining the defendant from contacting persons on the plaintiff’s customer list and from using its business forms. After a trial to the court, the relief sought by the plaintiff was denied. The plaintiff has appealed from that judgment.

The underlying facts, found in the memorandum of decision and other material uncontested parts of the proceeding at trial; New York Annual Conference of the United Methodist Church v. Fisher, 182 Conn. 272, 274, 438 A.2d 62 (1980); establish the *548 following: For approximately twenty years, the plaintiff sold and delivered frozen foods and associated products to its customers. These customers were solicited by telephone, referrals, direct mail and television and newspaper advertising. The names and addresses of several hundred customers were compiled into a customer list. Additional entries were made to the list as new customers were acquired and were customarily removed if no sale was made for more than a year. The customer list was left on the desk of the secretary to the plaintiff’s owner-president. It was accessible to the plaintiff’s employees, although only a few had direct authorization to use it. The plaintiff’s products were delivered to its customers’ homes in trucks, some of which openly advertised the plaintiff’s name on the side.

The defendant was employed by the plaintiff as a salesman and has been in the frozen food business almost continuously since 1967. He never used or even examined the customer list although he knew of its availability to him. The plaintiff’s routine was to give the defendant names of potential customers from the list. The defendant compiled these names in a personal notebook in which he kept records of his sales, his commissions and customer reorder dates. The plaintiff’s owner-president knew of this customer notebook and never objected to its existence or use by the defendant.

During his term of employment by the plaintiff, the defendant refused to sign a restrictive covenant not to compete in the event he terminated his employment. In 1979, the defendant resigned to organize his own frozen food delivery service in direct competition with the plaintiff. When he left the plaintiff’s employ, the defendant took his customer notebook without objection from the plaintiff’s owner-president who was aware of its removal. At trial the defendant testi *549 fied that this notebook was subsequently stolen although the court made no such finding.

Some of the customers listed in the notebook had become personal friends of the defendant during his employment with the plaintiff. After his resignation, the defendant contacted these people, seeking their business and referrals for his own newly formed company. At the time of the trial, he had successfully sold his service to eight or nine customers with whom he had first made contact while still in the plaintiff’s employ.

In the appeal, three claimed errors are briefed. A fourth issue was not briefed and is, therefore, considered abandoned. Manley v. Pfeiffer, 176 Conn. 540, 541, 409 A.2d 1009 (1979). The first briefed issue is whether the plaintiff’s business forms are entitled to protection as trade secrets. This issue need not be considered because the plaintiff waived this claim at oral argument.

The plaintiff’s second claim of error is that it should have been granted legal and equitable relief because the defendant made the initial contacts with the future customers of his business while in the plaintiff’s employ, even though at the time of these contacts the defendant was furthering the plaintiff’s business. The plaintiff relies on this rule: “[T]he right to injunctive relief and damages would apply ... to business done with customers solicited before the end of the employment.” Town & Country House & Homes Service, Inc. v. Evans, 150 Conn. 314, 321, 189 A.2d 390 (1963). The plaintiff interprets this rule to mean that any customer with whom the defendant had contact while employed by the plaintiff could never become a customer of the business formed by the defendant when he left the plaintiff’s employ. This interpretation is not proper. The rule correctly would apply only to customers solicited by the defendant for the *550 enhancement of his business before his employment with the plaintiff had terminated. Republic Systems & Programming, Inc. v. Computer Assistance, Inc., 322 F. Sup. 619, 627 (D. Conn. 1970); Town & Country House & Homes Service, Inc. v. Evans, supra, 318. Unless the name of a customer is a trade secret, a former employee can later contact customers with whom he did business while an employee. In this case, the evidence is clear that the defendant made all contacts for his own business purposes after he left the plaintiff's employ. There is no factual basis for the claimed error.

The third issue is whether the plaintiff’s customer list is a trade secret. If it is a trade secret, then it would be proper to enjoin the defendant from using his knowledge of the contents of the list in order to make contact with customers of his former employer for his own business endeavors. The trial court found that the list could not be so characterized.

“A trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound ... or a list of customers . . . .” Allen Mfg. Co. v. Loika, 145 Conn. 509, 516, 144 A.2d 306 (1958), quoting Restatement, 4 Torts § 757, comment b. An agent has no duty to abstain from competition with his principal after termination of the agency, but he has a duty not to use on his own account, in competition with the principal or to the latter’s injury, trade secrets revealed to him in confidence or surreptitiously discovered by the agent. Allen Mfg. Co. v. Loika, supra, 517; Restatement (Second), Agency § 396; Bruce, “Theft of Business Opportunity,” 53 Conn. B.J. 164, 170-75. After the termination of an employee’s agency, in the absence of a restrictive agreement, the agent can properly compete with his *551 principal as to matters for which he was employed, although he cannot properly use confidential information peculiar to his employer’s business acquired while he was an agent. LaFrance v. Hart, 8 Conn. Sup. 286, 287 (1940); Restatement (Second), Agency § 393, comment e.

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Bluebook (online)
426 A.2d 814, 37 Conn. Super. Ct. 546, 37 Conn. Supp. 546, 1981 Conn. Super. LEXIS 151, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holiday-food-co-v-munroe-connsuperct-1981.