Hamburger v. Hamburger - 4 Mass. L. Rep. 409 (1995)

Rule:

An employee is entitled to use his general knowledge, experience, memory, and skill in establishing his own business, which includes "remembered information." An employer who wishes to restrict the post-employment competitive activities of a key employee, where the activities do not entail misuse of proprietary information, must protect that goal through a non-competition agreement. Customer lists are not considered trade secrets if the information is readily available from published sources, such as business directories.

Facts:

The uncle and the father, who ran the family business, had a strained relationship but agreed to the nephew's employment. Later, the uncle resented the nephew's ascent to the role of manager. When the nephew inquired as to his future in the business, the uncle informed him that he could expect to be fired if the father died before the uncle. Thereafter, the nephew resigned and started his own business that was in competition with the family business. Plaintiff uncle filed consolidated actions against defendants, nephew and nephew's father, for the wrongful solicitation of customers and the wrongful appropriation of confidential customer lists and pricing information from the family business. The nephew and the father filed counterclaims against the uncle for bad faith in the conduct of the family business and in filing the lawsuit against them.

Issue:

1. Could the defendants be held liable for wrongful solicitation of customers and the wrongful appropriation of confidential customer lists and pricing information from the family business?
2. Was the uncle guilty of bad faith in instituting the complaint against defendants?

Answer:

1) No. 2) No.

Conclusion:

The court entered a judgment in favor of the nephew and the father in the uncle's lawsuit that ensued. The court held that there was no evidence that the nephew's solicitation of the customers commenced prior to his resignation and he was entitled to use his general knowledge and experience in establishing his own business, which included "remembered information." The nephew was not subject to a non-competition agreement and the customer information was readily available through business directories, thus the information was not a trade secret. However, since the uncle did not act in bad faith in his conduct of the business or in filing the lawsuit, the court ruled in favor of the uncle on the counterclaims of the nephew and the father.