Wallich v. Koren

181 P.2d 682, 80 Cal. App. 2d 223, 1947 Cal. App. LEXIS 940
CourtCalifornia Court of Appeal
DecidedJune 6, 1947
DocketCiv. 15791
StatusPublished
Cited by12 cases

This text of 181 P.2d 682 (Wallich v. Koren) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wallich v. Koren, 181 P.2d 682, 80 Cal. App. 2d 223, 1947 Cal. App. LEXIS 940 (Cal. Ct. App. 1947).

Opinion

*224 MOORE, P. J.

The sole question posed by this appeal is whether under the facts found by the court the plaintiff was entitled to damages and injunctive relief on account of unfair trade practices by the defendant, appellant herein.

For about ten years prior to the commencement of this action respondent manufactured and distributed first-aid medical supplies and maintained a laboratory in which he employed skilled chemists for the creation of his products. July 17, 1940, he employed appellant by written contract whereby the San Joaquin Valley, Los Angeles County, and other portions of Southern California areas were assigned exclusively to appellant who agreed to solicit the retail trade over the routes designated. The salesman was supplied with respondent’s list of patrons within the specified territory with their addresses and other valuable information relative to them. Appellant continued to solicit respondent’s customers within the territory until April, 1944, when the employment was terminated. About December 15, 1945, appellant reentered the field of his former employment and commenced to solicit and to sell first-aid supplies to respondent’s customers on the routes formerly traveled by him while in respondent’s employ. Such supplies were similar to those then manufactured and distributed by respondent and formerly sold through the agency of appellant. In his efforts he was aided by the list of respondent’s patrons acquired during his previous tenure, by his intimate acquaintance with such patrons, by his knowledge of their stocks and by their friendly attitude toward respondent and partiality to his products. He was aided also by his knowledge of the customers’ requirements, buying habits and buying intervals acquired during the prior employment.

The court awarded judgment for the sum of $250 and enjoined appellant from selling to or soliciting the purchase of first-aid medical supplies from any of those persons who were customers of respondent on the routes traveled by appellant while in the employ of respondent. Also, he was enjoined from attempting to induce any of such former customers to withdraw their trade from respondent and to purchase such supplies from appellant and from revealing the names and addresses of such customers.

There is no dispute as to the facts. The issue is to be determined by resolving whether the facts bring the case within unfair trade practices, such as appellant’s using trade secrets and canvassing the “routes” of his erstwhile employer, as *225 defined by certain California decisions (George v. Burdusis, 21 Cal.2d 153 [130 P.2d 399]; Scavengers’ Protective Association v. Serv-U-Garbage Co., 218 Cal. 568 [24 P.2d 489]; Golden State Milk Products Co. v. Brown, 217 Cal. 570 [20 P.2d 657]; Pasadena Ice Co. v. Reeder, 206 Cal. 697 [275 P. 944, 276 P. 995] ; Empire Steam Laundry v. Lozier, 165 Cal. 95 [130 P. 1180, Ann.Cas. 1914C 628, 44 L.R.A.N.S. 1159]), or whether it is a case of a commercial salesman who on leaving his employer immediately engages in a competitive business and makes use of only such information gained from his former employer as such a salesman is entitled to use in building up a business for himself or for another competitor. If his conduct was of the first class the judgment should be affirmed; if of the second it should be reversed.

If the continuance of an employer’s trade depends upon keeping secret the names of customers, or other valuable information known to such employer, his employee, having gained knowledge of such secrets in the course of his employment, cannot thereafter utilize such knowledge to the prejudice of his former employer. (New Method Laundry Co. v. MacCann, 174 Cal. 26, 30 [161 P. 990, Ann.Cas. 1918C 1022].) Independent of an express contract equity will enjoin the disclosure of confidential knowledge of trade secrets which a former employee learned in the course of his employment. (Empire Steam Laundry v. Lozier, supra, 99) The fact that a defendant was employed by plaintiff for years during which he learned the names, addresses and requirements of plaintiff’s customers justifies injunctive relief where the defendant undertook to use such information to the detriment of plaintiff. Such knowledge is a part of the good will of the business and is a trade secret. (Dairy Dale Co. v. Azevedo, 211 Cal. 344 [295 P. 10]; Pasadena Ice Co. v. Reeder, supra.)

Appellant contends that the facts here under consideration more nearly parallel those in Continental Car-Na-Var Corp. v. Moseley, 24 Cal.2d 104 [148 P.2d 9], and that it should control this decision. A careful reading discloses that it cannot be placed in the category of the route eases, in which the products sold are essentially the same and the quality of service rendered is similar. Preferably, it is the case of a commercial salesman, who had no assurance of an order unless he could satisfy the prospective buyer that his wares could be sold at a lower price, or that for other reasons they *226 would be more salable than competing products. The court emphasized that in selling to plaintiff’s customers the defendant did nothing with the intention of harming the plaintiff. The case is one in which the former employee was not in possession of secret information not readily accessible to others; he was within his rights in advising the trade of his change to the house of a rival employer. Therefore it is not authority for appellant’s contention herein.

On the other hand, the court below was guided by the decision in George v. Burdusis and respondent now places its reliance in the same authority for an affirmance. The facts reported and the conclusions derived warrant such reliance. After a partnership of over four years Aleck Burdusis conveyed his interest to his partners including the good will in the partnership which had conducted a linen supply business. He was soon joined by his brother Tom and together they traveled the route which Tom had traveled for three years as agent of the old firm, and within a week procured for Aleck 137 of the 160 customers he had served for his former emplojmrs. The court held that the use by a former employee of a customer list of his former employer whereby to solicit business for a rival concern is an unwarranted disclosure of trade secrets, which act on the part of such employee will be enjoined (citing authorities first mentioned herein)

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Bluebook (online)
181 P.2d 682, 80 Cal. App. 2d 223, 1947 Cal. App. LEXIS 940, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wallich-v-koren-calctapp-1947.