W. R. Grace & Co. v. Savoie

322 F. Supp. 790, 1970 U.S. Dist. LEXIS 11836
CourtDistrict Court, E.D. Louisiana
DecidedMay 4, 1970
DocketCiv. A. No. 70-529
StatusPublished
Cited by2 cases

This text of 322 F. Supp. 790 (W. R. Grace & Co. v. Savoie) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
W. R. Grace & Co. v. Savoie, 322 F. Supp. 790, 1970 U.S. Dist. LEXIS 11836 (E.D. La. 1970).

Opinion

BOYLE, District Judge:

Plaintiff, a Connecticut corporation engaged in the manufacture and marketing of coating, cleaning and antiseptic compounds for institutional, commercial and industrial use, filed its complaint to restrain the defendants, Hayes and Savoie, its former employees who are residents of Louisiana, and Gemini Industries, Inc., a Louisiana corpo[791]*791ration1 formed, owned and controlled by the individual defendants, from competing with it.

The plaintiff seeks an injunction enforcing the terms of a non-competitive provision in contracts of employment2 formerly in effect between the plaintiff and the individual defendants, (1) prohibiting defendants Hayes, Savoie, and Gemini Industries, Inc., or any of its stockholders, officers, partners, agents, employees, representatives, or anyone acting in concert with them or on their behalf from directly or indirectly, either as a proprietor, partner, stockholder, employee, agent, or in any other capacity, engaging in the business of selling or promoting the sale of cleaning, coating, or antiseptic compounds for industrial, commercial, or institutional use in the territory or territories in which defendants Hayes and Savoie were working for plaintiff on January 31, 1970, until February 1, 1971, and (2) prohibiting defendants Hayes, Savoie, and Gemini Industries, Inc., or any of its stockholders, partners, agents, employees, representatives or anyone acting in concert with them, or on their behalf, from selling or soliciting orders for any such products to or from any persons, firm or corporation whom defendant Savorie and,/or Hayes solicited or called upon while employed by plaintiff at any time during the six months preceding February 1, 1970, until February 1, 1971, and from using any information supplied to them by plaintiff or obtained by them while still employed by plaintiff for such purposes. Plaintiff further seeks damages in the amount of $160,000.00, attorney’s fees, interest and costs, and for such relief as is appropriate.

The defendants contend that, under the facts of this case, enforcement of the non-competitive provisions of the contracts involved would violate Louisiana’s public policy' as contained in La. R.S. 23:921.3 It is the defendants’ position that the training and advertising shown by the plaintiff herein were not of the quality that would operate under the statute to make enforceable the generally unenforceable covenants not to compete.

A hearing was held on March 20, 23, and 24, 1970, and the matter was submitted for decision on the merits. The Court, having considered the evidence adduced at trial, the uncontroverted allegations of the verified pleadings, and the arguments of counsel, finds that there should be judgment for the defendants dismissing the complaint at plaintiff’s costs, and in connection herewith files this opinion which shall serve as the Court’s findings of fact and conclusions of law.

The claims of the plaintiff against each defendant will be considered separately.

1. Arthur M. Hayes — Training In July, 1962, defendant Hayes was employed as a salesman by DuBois [792]*792Chemical Company. Hayes had, at that time, no sales experience, but was hired because of his personality and extensive experience as a skilled aircraft and engine mechanic in the United States Air Force.

When he was hired, Hayes was furnished a briefcase and literature on the DuBois line of products and certain sales aids. To defray the company’s expense, Hayes was required to make a deposit of $3.00 per month for twenty-two months, and in addition delivered to plaintiff his note for $57.00, in order to cover replacement costs and to encourage better care of materials.4

Before commencing his duties as a DuBois salesman, Hayes spent one weekend with Jack Pruitt, a DuBois District Manager, and Grant Hample of DuBois, during which time he installed dishwasher equipment at a restaurant.

When he began working for DuBois, he received a week of on-the-job training by Pruitt, making calls upon all the customers in the territory, demonstrating products on two occasions. At that time, Hayes sold to a meat packing plant, installing the product without any prior training or demonstration. The District Manager, for an eight month period, spent two days per month in the field with Hayes, instructing Hayes in the use of DuBois products, sales tactics, and avoidance of frequent errors.

In August, 1963, DuBois’ Regional Manager, Lee Graham, spent the greater portion of a week in Springfield, Missouri, working with Hayes. The testimony indicates that the DuBois training consisted in large measure of supplying the trainee with technical data and explanatory brochures on the company’s product line, introducing salesmen to company clients, servicing and building up old accounts and seeking new accounts.

In 1964, the plaintiff, W. R. Grace & Company, merged with DuBois Chemicals, DuBois becoming a division of Grace. In the ensuing reorganization, Hayes became District Manager in Little Rock, Arkansas. Following the merger and some two years after he became employed by DuBois, Hayes signed the employment contract, part of which is at issue in this action.5

[793]*793“Training” received by Hayes after the execution of this contract consisted chiefly of annual sales meeting and seminars designed to acquaint all its sales personnel in the field with the company’s new products, and to spur them on to further sales efforts. In addition, an experienced District Manager, Mr. Frank Fourmy, spent two days introducing Hayes to his new duties as District Manager in Little Rock. In October, 1964, when Hayes was transferred to New Orleans as District Manager, Four-my and Hayes flew to New Orleans together, where Fourmy spent three or four days with Hayes, introducing him to warehouse personnel and procedures, and certain difficulties the company was experiencing in the New Orleans area, to which Hayes would be required to give administrative attention. Fourmy also explained the potential market in offshore drilling operations. Fourmy returned to New Orleans in December, 1964, when he familiarized Hayes with metal and porcelain cleaning procedures.

The plaintiff’s witness, Mr. Graham, testified that there was a 25% split of commissions on sales by Hayes to certain accounts that went to the company to help defray training expenses incurred by Grace in “training” its salesmen. To that extent Hayes made some contribution to the expense of his own “training.”

Plaintiff relies on the theory that its products were of a highly technical nature, and its processes were very complex, requiring a high level of expertise on the part of its salesmen, which could be achieved only by continuous specialized training. The evidence shows, however, that a sophisticated knowledge of chemistry is not required of DuBois salesmen. The “technical data” sheets, on which the plaintiff premised this argument, contained no critical information that was not printed on the reverse side of leaflet “brochures” for each product that were made available to, distributed to and used by the DuBois customers. The information contained in the technical data sheets and the brochures were substantially the same in both form and content.

The plaintiff also maintains that Hayes was trained to use very technical equipment. Exhibits D-13 through D-16 are representative equipment used in Mr.

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322 F. Supp. 790, 1970 U.S. Dist. LEXIS 11836, Counsel Stack Legal Research, https://law.counselstack.com/opinion/w-r-grace-co-v-savoie-laed-1970.