Summary
In French Bros. Bauer Co. v. Townsend Bros. Milk Co., 21 Ohio App. 177, 152 N.E. 675 (Ohio Ct. App. 1925), an injunction was allowed for a period of one year restraining defendant from hiring plaintiff's former employees, because of the conspiracy by which the old employees were enticed away.
Summary of this case from United Board Carton Corp. v. BrittingOpinion
Decided November 9, 1925.
Injunction — Unfair competition — Employment of former employes to solicit former customers, enjoined — Sale of dairy business.
Where dairy business, conducted under owner's name, was sold to plaintiff corporation, which thereafter included seller's name "Townsend" in its corporate name, and subsequently defendants, who were sons of seller, left plaintiff's employ and engaged in competing business under name "Townsend Bros. Milk Company," and with aid of several former drivers and other employes of plaintiff solicited and secured many of plaintiff's customers, held that plaintiff, which had spent large sums in advertising name "Townsend" to designate its products, was entitled to injunction restraining defendants from employing any of plaintiff's former employes who were formerly or at present employed by plaintiff to work over plaintiff's trade routes or from employing employes to solicit plaintiff's customers served by them while employed by plaintiff, notwithstanding absence of use of written list of customers.
APPEAL: Court of Appeals for Hamilton county.
Mr. John C. Hermann, Mr. Benton S. Oppenheimer, and Messrs. Harmon, Colston, Goldsmith Hoadly, for plaintiff.
Messrs. Mallon Vordenberg, for defendants.
The action is for injunction, on the ground of unfair competition. The plaintiff company claims that the defendant company, by enticing away the employes of the plaintiff, for the purpose of securing trade routes built up by the plaintiff company, and in the use of the name Townsend Bros. Milk Company, in an endeavor to seize the good will of the plaintiff company, is guilty of unfair competition.
The facts as disclosed by the record are:
In 1906, a corporation known as the French Bros. Dairy Company purchased the Townsend Milk Company, at that time owned and operated by John Townsend, the father of Henry, Elmer, and Roy Townsend. Later the French Bros. Bauer Company was incorporated, and the Townsend dairy was conducted as an independent branch of that company.
In 1915, the French Bros. Bauer Company purchased the business of Charles I. West, and then conducted the Townsend business and the West business under the name of the Townsend-West Dairy.
The three sons of John Townsend were employed in the business by the plaintiff, and continued to be so employed until January, 1924, when Henry Townsend left and became identified with the Niser Ice Cream Company, which was, in a measure, a competitor of the plaintiff company.
In June, 1925, Elmer and Roy Townsend left plaintiff's employment, and became associated with Henry Townsend in a competing business, under the name of the Townsend Bros. Milk Company.
Elmer Townsend had been the manager in charge of the Townsend-West branch, and had the full direction and control of all advertising, and of the hiring of employes. During this time, while he was the executive head of the Townsend-West Dairy, he spent large sums advertising the name Townsend, not using West in connection therewith, as designating brands of milk, buttermilk, cream, butter, etc.
The evidence shows that a plan was formed to engage in a competitive business, under the name of the Townsend Bros. Milk Company, and that, in carrying out this plan, old milk wagons were purchased of the Townsend-West Company, partly through Elmer Townsend, its manager, to be used by the new company. The name was placed in the telephone book, and various other plans were made to embark in the new business.
When Elmer Townsend resigned, he immediately went into the new enterprise. Various drivers, skippers, and the chief route foreman of the plaintiff left at once, and became associated with the Townsend Bros. Milk Company.
A campaign was then started to secure customers for the new company, and the old employes of plaintiff company were employed to assist in carrying out this plan, soliciting over the same routes as they had been employed to do by the plaintiff company. Many of the former customers of the French Bros. Bauer Company were secured by this method.
There is no need for a further discussion of the evidence, but from an examination of the record we are of the opinion that plaintiff has offered sufficient evidence to warrant the issuance of an injunction.
The important question, it seems to us, is the employment of plaintiff's former employes, route men, etc., in securing for the new company the customers of the plaintiff company. If a written list of the route customers was kept by plaintiff company, and the employes, or the defendant company, took the list and used the same, it is a well-recognized rule that injunctive relief would be proper. While there is no written list of such customers, the former employes knew and had in mind every such customer, and the reason for the rule is just as pertinent under these circumstances as though there had been a written list. There is ample authority for holding that such action should be enjoined.
An injunction will be allowed to prevent the defendant company from employing any of the drivers, route foremen, or skippers of the plaintiff company, who were formerly, or are at present, employed by the Townsend-West Dairy Company, to serve or work over the trade routes served by such employes at the time of leaving the employ of the plaintiff company; also from employing such employes to solicit to become customers of the defendants the customers served by them while employed by the plaintiff company. The injunction will continue for one year from the date of the decree entered in the superior court herein.
Decree accordingly.
HAMILTON, J., concurs.
I do not concur in the conclusion of my associates that an injunction should be issued in this case against the employment of former employes of the French Bros. Bauer Company, working under the name of the Townsend-West Dairy Company. It is not plain, nor is there any showing, that Henry, Roy, or Elmer Townsed violated any contract, or took with them any list of customers or trade secrets of the plaintiff company; nor is it shown that any of the employes who left the plaintiff company violated any contract or took any trade secrets of the plaintiff in leaving its employ.
The law is that in the absence of an express contract an employe may solicit for his new employer the business of his former customers, and will not be enjoined from so doing at the instance of his former employer.
These employes were not bound either expressly or impliedly not to disclose or make use of any information that came to them while in the employ of the plaintiff's branch. See Home Steam Laundry Co. v. Smith, 8 N.P. (N.S.), 402.
As was stated in H.B. Wiggins Sons' Co. v. Cott-A-Lap Co., (C.C.), 169 F., 150, paragraph 2 of the syllabus:
"Mere hiring of complainant's former confidential servant, who had acquired knowledge of the complainant's trade secret, by complainant's business rival, in the absence of anything more than mere opportunity on defendant's part to learn and use complainant's secret, was insufficient to justify the issuance of an injunction, either against defendant or the employe, restraining the employe from imparting, and defendant from receiving or using, information concerning such secret in defendant's business, to complainant's prejudice."
The injunction allowed by the majority of this court is against the Townsend Bros. Milk Company from employing these men to solicit or work over the routes served by such employes at the time of leaving the branch of the plaintiff company. What cannot be done directly, may not be done indirectly. The injunction allowed in this case indirectly affects the employes, and prevents them from working over the routes or soliciting the customers on the routes over which they once worked. In my opinion an injunction should be refused, and the petition dismissed.