Gary Van Zeeland Talent, Inc. v. Sandas - 84 Wis. 2d 202, 267 N.W.2d 242 (1978)

Rule:

A customer list per se does not fall squarely within the category of trade secrets. It is impossible to say generically that all customer lists are so protected. Rather, it is apparent that the general rule is that customer lists are not protected, and it is in the unusual case that such lists will be afforded the status of a trade secret. Perhaps more than any other area of trade-secret law, customer lists present problems of extreme commercial importance and of a close balancing of the interest of the employer and employee.

Facts:

Plaintiff Gary Van Zeeland Talent, Inc., a talent booking agency, brought an action against defendant Edwin J. Sandas, its former employee, alleging that defendant, through the use of private, secret, and confidential customer lists, compilations, and information interfered with plaintiff's business and had continuously solicited, invited, and urged plaintiff's customers to cease doing business with plaintiff and to become his customers. Defendant moved for summary judgment and accompanied that motion with an affidavit which averred that the information in the customer list was obtainable from telephone directories, trade publications, newspaper advertisements, musician unions' records, and brochures and publicly distributed lists prepared by the Van Zeeland agency, in essence showing facts that tended to demonstrate that the information in the list was readily obtainable and, hence, not a trade secret. The trial judge ordered summary judgment for the defendant after concluding that the customer list did not constitute a trade secret. Plaintiff appealed, asserting that the customer list was a trade secret. Alternatively, if it was not a trade secret, plaintiff argued the misappropriation of its time and effort by the taking of the customer list.

Issue:

Under the circumstances, was the grant of summary judgment in favor of defendant proper?

Answer:

Yes.

Conclusion:

After considering a number of factors, the court determined that the customer list did not constitute a trade secret. The court noted that the Van Zeeland list was completely silent in respect to key personnel to be contacted and failed even to include street addresses. There was, indeed, complicated marketing data which was compiled by Van Zeeland which was included in its ordinary business records, which reflected the musical placements with individual customers, the individual dealt with, and the credit record of the customer. There was nothing in the record to show that any attempt was made to keep the information secret, and such information was not taken by defendant. Further, the court held that estoppel was not appropriate in a restraint of trade action and that any restrictive covenant imposing an unreasonable restraint was illegal, void, and unenforceable. Finally, the court found that the misappropriation doctrine was not applicable to the taking of customer lists. Accordingly, the court affirmed the order entering summary judgment in favor of plaintiff.