Sunday, November 24, 2013

Town & Country House & Home Service, Inc. v. Newbery case brief

Town & Country House & Home Service, Inc. v. Newbery case brief summary
147 N.E.2d 724 (1958)

Defendants, former employees who began a competing house cleaning business, appealed from a judgment of the Appellate Division of the Supreme Court in the Second Judicial Department (New York), which found in favor of plaintiff former employer.

Plaintiff sought injunctive and other relief after former employees formed a competing house cleaning service using many of plaintiff's methods and persuaded several of plaintiff's customers to switch companies. The appellate court granted broad injunctive and other relief and defendants appealed.

  • The court stated that plaintiff was entitled to injunctive relief because their customer list was a trade secret, plaintiff had expended great amounts of time and energy to develop it, and the contents of the list were not easily discernable from any other source. 
  • The information became known to defendants only because of their employment by plaintiff. 
  • Therefore plaintiff was entitled to enjoin defendants from further solicitation of its customers and to receive damages corresponding to the profits defendants made by reasons of the customers they enticed away from plaintiff. 
  • Plaintiff was not, however, entitled to enjoin defendants from operating a competing business.

The court affirmed the judgment and determined that plaintiff was entitled to enjoin defendants from soliciting its former customers, and to recover such damages or loss of profits as were established to have resulted from those that had been solicited; however, the court dismissed the remainder of the complaint.

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