Brief Fact Summary. Defendants, Percy Newbery et al., are former employees of Plaintiff, Town & Country House & Home Service, Inc. Plaintiff brought an action after Defendants started their own competing company targeting Plaintiff’s customers.
Synopsis of Rule of Law. An employee can owe a fiduciary duty to their employer for the employer’s trade secrets after their service has been terminated.
However, a court will prevent the solicitation by a former employer of customers who are not openly engaged in business in advertised locations or whose availability as patrons cannot readily be ascertained but whose trade and patronage have been secured by years of business effort and advertising, and the expenditure of time and money, constituting a part of the good will of a business which enterprise and foresight have built up.View Full Point of Law
Issue. The issue is whether Defendant is liable for damages for work performed after their employment ended.
Held. Defendants owe Plaintiff the profits they made from customers taken from Plaintiff, but they do not have to cease their operations. Defendants had a duty to protect Plaintiff’s trade secrets and are prohibited from profiting from the secrets even after their employment ended. The customer listing was formulated through many much effort on behalf of Plaintiffs, but their methods of cleaning a house were nothing so secretive as to justify prohibiting Defendant’s from continuing their cleaning services.
Discussion. Most people are at will employees wherein either side can terminate the employment at any time. However, public policy would dictate that an employee should be able to continue in the field of work while not having a right to exploit information that was held in confidence at their prior employment.