Paper Manufacturers Co. v. Weiss

57 Pa. D. & C.2d 573, 1972 Pa. Dist. & Cnty. Dec. LEXIS 491
Pennsylvania Court of Common Pleas, Bucks County·Decided March 13, 1972·No. no. 1040·Published

Opinion

MOUNTENAY, J.,

— This is an action in equity whereby plaintiff, Paper Manufacturers Company, seeks to enjoin the employment of its former employe, Weiss, by plaintiff’s alleged [574] competitor, Penn Card and Paper Company, Inc. Plaintiff’s complaint also asks that Weiss be enjoined from revealing plaintiff’s trade secrets to Penn Card and finally that Penn Card be compelled to account to plaintiff for profits resulting from Weiss’ employment by Penn Card and from the revelation by Weiss of plaintiff’s trade secrets to Penn Card. Both defendants have filed preliminary objections in the nature of a motion for a more specific pleading, and defendant Penn Card has also demurred.

The complaint avers, in substance, that plaintiff is engaged in the manufacture and sale of paper products which it markets on a nationwide scale; that Weiss, over a period of many years, has become a top management employe of plaintiff and has learned many of plaintiff’s “trade secrets” in the process; and that after an association of 32 years, plaintiff, as employer, and Weiss, as employe, entered into a written agreement providing, inter alia, that Weiss would not accept employment with a competitor of plaintiff during a period of two years immediately following any termination of his employment with plaintiff nor would he at any time reveal any of plaintiff’s trade secrets. The complaint further avers that approximately nine months after executing the above agreement, Weiss voluntarily left the employ of plaintiff and subsequently, within the two-year period, went to work for plaintiff’s competitor, Penn Card.

In support of its demurrer, Penn Card asserts that the complaint avers no consideration for Weiss’ promise, that the agreement is contrary to public policy, and that, in any event, Penn Card, not being a party to the contract, is not bound thereby. Both defendants argue in support of their motions for a more specific pleading that plaintiff, in its complaint, must more [575] fully describe the trade secrets which it is seeking to protect.

In a further attempt to secure more specific information with respect to the alleged trade secrets, defendants filed interrogatories and deposed one of plaintiff’s officers. Defendants contend that plaintiff’s answers to the interrogatories were too generalized and equivocal to be of any value and further assert that at the deposition hearing, plaintiff’s officer, on the advice of counsel, declined to be sufficiently specific with respect to the matter of trade secrets. Defendant Weiss accordingly filed a motion for sanctions, and plaintiff countered with a motion for a protective order. These motions, as well as defendants’ preliminary objections were argued before the court en banc.

Plaintiff contended at oral argument that the controversy with respect to plaintiff’s unwillingness to reveal its trade secrets in its pleadings and by way of discovery was a “red herring” in that the suit was not instituted primarily for the purpose of restraining the disclosure of trade secrets but rather merely to enforce Weiss’ covenant not to accept employment with a competitor. Plaintiff asserts that the reference in the complaint to trade secrets was simply for the purpose of strengthening, substantiating and providing a rational basis for plaintiff’s demand that Weiss be enjoined from working for Penn Card. Accordingly, argues plaintiff, proof of trade secrets is not essential to its cause of action.

It must be noted that plaintiff’s prayer for relief is somewhat inconsistent with this position in that it asks “that Penn Card be required to account [to plaintiff] for Penn Card’s profits resulting from its employment. of Weiss and the revelation by Weiss to Penn [576] Card of trade secrets belonging to [plaintiff] . . (Italics supplied.) However, since plaintiff appears willing to abandon so much of its action as must depend upon the existence of trade secrets, we shall proceed upon that basis.

Of course, this development immediately raises the question as to what is meant by “trade secrets” in the present context and also the question as to whether plaintiff can maintain its action independent of the “trade secrets concept.” We shall first address ourselves to these questions.

There is some indication in the language of the court in Morgan's Home Equipment Co. v. Martucci, 390 Pa. 618, 631 (1957), that the protection of an employer against the possible disclosure by his employe of the employer’s trade secrets constitutes the basis for enforcing employe convenants such as the one involved in the instant case.* An examination of subsequent cases, and particularly Van Products Co. v. General Welding and Fabricating Co., 419 Pa. 248, 260 (1965), will reveal that the term “trade secrets” is used in two different contexts; that is, trade secrets in the strict sense (sometimes called particular trade secrets) and trade secrets in general sense. Trade secrets in the strict sense are thus defined in Restatement, Torts, sec. 757, Comment (b):

“A trade secret may consist of any formula, pattern, [577] 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 . . .”

Conversely, general trade secrets are the general experience, knowledge, memory, skill and other subjective knowledge which an employe obtains in the course of his employment. Particular trade secrets are subject to protection at common law completely independent of any contractual obligation. On the other hand, general trade secrets are not the property of the employer, and the employe’s use of them is not to be curtailed unless through some restrictive covenant entered into with the employer: Van Products Co. v. General Welding and Fabricating Co., supra, at page 260. See also Capital Bakers, Inc. v. Townsend, 426 Pa. 188 (1967).

We thus conclude that an employer may, in the proper instance, maintain an action in equity to enjoin a former employe from associating himself with a competing employer even though the disclosure or imminent disclosure of trade secrets in the strict sense is not at issue. Therefore, if, as plaintiff argues, its action is not dependent upon the existence of particular trade secrets, or, in the alternative, if it is willing to abandon so much of its action as is dependent upon the existence of particular trade secrets, there would seem to be no purpose in compelling plaintiff to make further disclosure with respect to such secrets either by way of a more specific pleading or by way of discovery.

In view of the foregoing, defendants’ motions for a more specific pleading will be denied. Further, the motion of defendant Weiss for sanctions to compel the specification of further details of plaintiff’s trade secrets will be granted to the extent of prohibiting [578] plaintiff from introducing at trial any evidence pertaining to particular trade secrets, that is to say, trade secrets in the strict sense as above described. In view of the foregoing, no disposition need be made of plaintiff ’s motion for a protective order.

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Paper Manufacturers Co. v. Weiss, 57 Pa. D. & C.2d 573, 1972 Pa. Dist. & Cnty. Dec. LEXIS 491 (Pa. Super. Ct. 1972).

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