144 A.D.2d 1025 | N.Y. App. Div. | 1988
Judgment unanimously reversed on the law without costs, injunction vacated and complaint dismissed. Memorandum: Plaintiff Buffalo Imprints, Inc. is an advertising specialty firm that deals in items such as
On October 27, 1986, both defendants were terminated by plaintiff for what was described as disloyalty to the company. The following day, defendants opened an advertising specialty business under the name of Marketing Services, Inc., at a location in close proximity to plaintiff’s place of business.
Plaintiff commenced this action seeking to enjoin defendants from competing with it for two years, pursuant to the terms of the employment agreement, and for monetary damages. Defendants claimed in their answers that the noncom-petition clause in their employment contracts was void as against public policy. After a trial, the court rendered an order enjoining defendants from operating a business in contravention of the terms of the noncompete provision in the employment contract, finding that the noncompetition clause in the agreements was fair and reasonable, that defendants were exposed to every facet of plaintiff’s business during their employment, and that most of the defendants’ business was to plaintiff’s customers. The court also awarded plaintiff 45% of defendants’ gross profit, $34,125.
It was error for the court to enjoin defendants from engaging in business in competition with plaintiff. Powerful public policy considerations militate against sanctioning the loss of one’s livelihood; therefore, clauses in employment contracts that prevent an employee from pursuing a similar vocation after termination are disfavored by the law (Columbia Ribbon & Carbon Mfg. Co. v A-l-A Corp., 42 NY2d 496, 499; Newco Waste Sys. v Swartzenberg, 125 AD2d 1004, 1005; Family Affair Haircutters v Detling, 110 AD2d 745, 747-748). Such restrictive covenants will not be enforced "unless necessary to protect the trade secrets, customer lists or good will of the employer’s business, or perhaps when the employer is exposed to special harm because of the unique nature of the employee’s services” (American Broadcasting Cos. v Wolf 52 NY2d
Analyzing the case at bar according to the foregoing principles of law, the conclusion is inescapable that the court erred in giving enforcement to the restrictive covenants in these sales agreements. It is clear from the record plaintiff’s customer lists do not qualify for trade secret protection. Lists of customers who might be interested in purchasing advertising specialties are readily ascertainable from many sources, including the yellow pages of telephone directories and lists of businesses prepared by chambers of commerce. Plaintiff concedes that lists of suppliers of novelty items are compiled and distributed by a national trade organization known as ASI, and that most suppliers exhibit their wares at trade shows which are open to the general public. Therefore, plaintiff failed to prove that its lists of suppliers were confidential.
Nor did plaintiff prove that defendants performed services of such a unique character that plaintiff is entitled to injunctive relief (Newco Waste Sys. v Swartzenberg, supra, at 1005; Family Affair Haircutters v Detling, supra, at 746; cf., Service Sys. Corp. v Harris, 41 AD2d 20). In our view, the court erred by giving enforcement to the restrictive covenants and reversal is necessary.
We further find that the court did not abuse its discretion by staying the effect of the injunction pending appeal. (Appeal from judgment of Supreme Court, Erie County, Ball, J.H.O.— injunction.) Present — Doerr, J. P., Boomer, Green, Pine and Davis, JJ.