Case Title: Fred Siegel Co., L.P.A. v. Arter & Hadden

Citation: 1999-Ohio-260

Docket Number: 19971998

State: ohio

Court: Ohio Supreme Court

Date: 1999-04-07T00:00:00Z

Document:
[Cite as Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171, 1999-Ohio-260.] 
 
 
 
 
 
FRED SIEGEL CO., L.P.A. ET AL., APPELLEES, v. ARTER & HADDEN ET AL., 
APPELLANTS. 
[Cite as Fred Siegel Co., L.P.A. v. Arter & Hadden (1999), 85 Ohio St.3d 171.] 
Torts — Elements of tortious interference with contract — Establishing lack of 
justification element in tort of tortious interference with contract — 
Factors in determining whether an actor has acted improperly in 
intentionally interfering with a contract or prospective contract of another 
— Establishment of privilege of fair competition will defeat claim of 
tortious interference with contract, when — Listings of names, addresses, 
or telephone numbers that have not been published or disseminated 
constitute trade secrets, when — Whether particular knowledge or process 
is a trade secret is a question of fact determined by trier of fact upon 
greater weight of the evidence. 
(No. 97-1998 — Submitted September 29, 1998 — Decided April 7, 1999.) 
APPEAL from the Court of Appeals for Cuyahoga County, No. 71440. 
1. 
The elements of the tort of tortious interference with contract are (1) the 
existence of a contract, (2) the wrongdoer’s knowledge of the contract, (3) the 
wrongdoer’s intentional procurement of the contract’s breach, (4) lack of 
justification, and (5) resulting damages.  (Kenty v. Transamerica Premium 
Ins. Co. [1995], 72 Ohio St.3d 415, 650 N.E.2d 863, paragraph two of the 
syllabus, affirmed and followed.) 
2. 
Establishment of the fourth element of the tort of tortious interference with 
contract, lack of justification, requires proof that the defendant’s interference 
with another’s contract was improper.  (Kenty v. Transamerica Premium Ins. 
Co. [1995], 72 Ohio St.3d 415, 650 N.E.2d 863, affirmed and followed.) 
 
 
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3. 
In determining whether an actor has acted improperly in intentionally 
interfering with a contract or prospective contract of another, 
consideration should be given to the following factors: (a) the nature 
of the actor’s conduct, (b) the actor’s motive, (c) the interests of the 
other with which the actor’s conduct interferes, (d) the interests sought 
to be advanced by the actor, (e) the social interests in protecting the 
freedom of action of the actor and the contractual interests of the 
other, (f) the proximity or remoteness of the actor’s conduct to the 
interference, and (g) the relations between the parties.  (Restatement of 
the Law 2d, Torts [1979], Section 767, adopted.) 
4. 
Establishment of the privilege of fair competition, as set forth in Section 768 
of the Restatement, will defeat a claim of tortious interference with contract 
where the contract is terminable at will. (Restatement of the Law 2d, Torts 
[1979], Section 768, adopted.) 
5. 
Pursuant to former R.C. 1333.51(A)(3), listings of names, addresses, or 
telephone numbers that have not been published or disseminated, or 
otherwise become a matter of general public knowledge, constitute trade 
secrets if the owner of the list has taken reasonable precautions to protect 
the secrecy of the listing to prevent it from being made available to persons 
other than those selected by the owner to have access to it in furtherance of 
the owner’s purposes. 
6. 
The question whether a particular knowledge or process is a trade secret is a 
question of fact to be determined by the trier of fact upon the greater weight 
of the evidence. (Valco Cincinnati, Inc. v. N & D Machining Serv., Inc. 
[1986], 24 Ohio St.3d 41, 24 OBR 83, 492 N.E.2d 814, affirmed and 
followed.) 
 
 
3
 
Fred Siegel Co., L.P.A., and Fred Siegel (collectively, “Siegel”) initiated this 
action by filing a complaint naming as defendants attorney Karen H. Bauernschmidt 
and the law firm of Arter & Hadden.  Fred Siegel alleged that he was a principal of 
the licensed professional association Fred Siegel Co., L.P.A., and that defendant 
Bauernschmidt had been employed by Siegel until September 23, 1992, when she 
resigned to join Arter & Hadden.  The complaint alleged tort liability based on 
theories of tortious interference with contract, misappropriation of trade secrets, and 
breach of fiduciary duty. 
 
The defendants denied liability. 
 
During discovery it was established that Bauernschmidt had worked for the 
Siegel law firm for ten years as an associate attorney.  During that period, 
Bauernschmidt provided legal counsel to Siegel clients in regard to valuation of 
property and assessment of real property tax, and had represented them in county 
boards of revision, the Ohio Board of Tax Appeals, and in the courts.  During her 
employment with Siegel, Bauernschmidt had direct and frequent contact with Siegel 
clients and had developed personal relationships with many of them.  
Bauernschmidt conceded in deposition testimony, however, that the clients for 
whom she worked while an associate were clients of Siegel. 
 
As an associate at the Siegel law firm, Bauernschmidt had full access to client 
files, as well as access to information regarding the identity and addresses of Siegel 
clients and contact persons, and fee agreements.  During her tenure at Siegel, she 
maintained a Rolodex contact directory at her desk including information regarding 
both personal and professional acquaintances. 
 
Prior to deciding to leave Siegel, Bauernschmidt discussed with Arter & 
Hadden the possibility of Siegel clients following her to her new firm.  Moreover, 
Bauernschmidt acknowledged informing Arter & Hadden of the nature of the 
 
 
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contingent fee structure that Siegel generally used to charge its clients for work 
similar to that Bauernschmidt would do for Arter & Hadden. 
 
In late August 1992, Arter & Hadden offered employment to Bauernschmidt.  
On September 2, Bauernschmidt gave notice to Siegel of her intent to leave the firm, 
effective September 23, 1992.  During the three-week period before her departure, 
during which she continued working at Siegel, Bauernschmidt informed Siegel 
clients with whom she spoke that other Siegel attorneys would be taking 
responsibility for their cases.  If asked, Bauernschmidt would tell clients that she 
was leaving Siegel and joining Arter & Hadden. 
 
On the day prior to her departure, Siegel instructed Bauernschmidt in writing 
not to “directly or indirectly solicit” any of its clients in the future, implying that it 
considered its client list confidential.  In addition, Siegel advised Bauernschmidt not 
to “take any lists or copies of lists of the firms [sic] clients or any other listed 
information of the firms [sic] business and any of the information in the firm’s 
posession [sic] dealing with said clients.” 
 
On her last day at the Siegel firm, Bauernschmidt removed personal 
belongings from her office, including the cards contained in her Rolodex file.  
Additionally, Bauernschmidt had possession of a Siegel client list in her home, 
which was available to her for a period of time after her departure, although she later 
returned it to her former employer, at its request. 
 
After leaving Siegel, Bauernschmidt wrote letters to Siegel clients notifying 
them of her new association with Arter & Hadden.  The letters, written on Arter & 
Hadden stationery, read: 
 
“During the past ten years, I have had the pleasure of providing legal 
services which have reduced your real estate taxes. I am pleased to announce 
that I have joined the Cleveland office of the law firm of Arter & Hadden. 
 
 
5
 
“At Arter & Hadden, my legal practice will concentrate on real 
property and other state tax matters.  I would like for us to continue our 
professional relationship.  When you need assistance or have questions, 
please contact me.” 
 
Bauernschmidt testified that she sent the letters to persons for whom she had 
performed legal work while at Siegel, and that she identified those persons from 
various sources, not excluding both her Rolodex file cards and the Siegel client list.  
She further stated that she had discussed with Arter & Hadden the prospect of 
making such a mailing prior to sending the letters. 
 
Upon learning of Bauernschmidt’s letters, Siegel issued letters to its clients, 
which read, in part: 
 
“You may have recently received a letter from Karen Bauernschmidt, a 
former associate of this firm, which she has apparently sent to a significant number 
of clients of our firm, without our knowledge or authority.  While her departure was 
amicable, her mailing of this type of letter was unexpected by us.  In order to dispel 
any confusion with respect to your legal matters being handled by this office, I feel 
obliged to reply. 
 
“Although Karen is no longer here, we have added additional legal and other 
professional personnel to our staff and are ready, willing and able to continue our 
services on your behalf.  As you know, this firm’s professional relationship with you 
is a valued one, and we shall continue representing you ably and professionally in 
your matters that you have entrusted to us, as well as any new items for which you 
decide to engage us.” 
 
Following Bauernschmidt’s departure from Siegel, Arter & Hadden sent a 
later mailing to solicit business for Bauernschmidt. The mailing consisted of a two-
page solicitation describing the real property tax appraisal services that Arter & 
 
 
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Hadden provided and listing Bauernschmidt as a person to contact for more 
information.  In deposition testimony, Bauernschmidt stated that the solicitation was 
sent to current Arter & Hadden clients, but also to other targeted property owners 
irrespective of whether they were Arter & Hadden clients.  She acknowledged that 
the solicitation reached Siegel clients.  Bauernschmidt testified at deposition that she 
did not create the mailing list used in connection with this mailing and that the 
mailing list consisted of addresses of Arter & Hadden clients and others identified 
from business directories. 
 
Thereafter, an undetermined number of clients changed their legal 
representation from the Siegel firm to Bauernschmidt and requested the transfer of 
their files to her. 
 
In the first count of the complaint, Siegel claimed that Bauernschmidt and 
Arter & Hadden had tortiously interfered with Siegel’s business relationships and 
contracts with clients by soliciting those clients to change their legal representation 
to Bauernschmidt and Arter & Hadden.  In counts two and three of the complaint, 
Siegel alleged that Bauernschmidt had knowingly and willfully retained copies of 
confidential information and trade secrets belonging to Siegel, and that both 
defendants had tortiously misappropriated that information and improperly solicited 
Siegel clients.  In count four of the complaint, Siegel alleged that Bauernschmidt 
had violated a fiduciary duty of loyalty owed to Siegel. 
 
Following discovery, the trial court granted summary judgment in favor of 
Bauernschmidt and Arter & Hadden, without opinion.  The court of appeals 
reversed and ordered remand as to all claims presented in the complaint, except 
Siegel’s claim of breach of fiduciary duty, for which summary judgment was 
affirmed as to the appellants. 
 
 
7
 
The cause is now before this court pursuant to the allowance of a 
discretionary appeal. 
__________________ 
 
Berkman, Gordon, Murray & DeVan, J. Michael Murray, Larry S. Gordon 
and Brooke F. Kocab, for appellees. 
 
Gallagher, Sharp, Fulton & Norman, Gary L. Nicholson and D. John Travis, 
for appellants. 
__________________ 
 
MOYER, C.J.  The determinative issues in this case are (1) whether it was 
error for the trial court to grant summary judgment in favor of Karen Bauernschmidt 
and Arter & Hadden as to Siegel’s claim of tortious interference with contract, and 
(2) whether it was error for the trial court to grant summary judgment in favor of 
Karen Bauernschmidt and Arter & Hadden as to Siegel’s claim of misappropriation 
of trade secrets. 
 
Tortious interference with contract.  We reaffirm the elements of the tort of 
tortious interference with contract as enumerated in paragraph two of the syllabus of 
Kenty v. Transamerica Premium Ins. Co. (1995), 72 Ohio St.3d 415, 650 N.E.2d 
863.  They are (1) the existence of a contract, (2) the wrongdoer’s knowledge of the 
contract, (3) the wrongdoer’s intentional procurement of the contract’s breach, (4) 
the lack of justification, and (5) resulting damages. 
 
In Kenty we quoted with approval 4 Restatement of the Law 2d, Torts (1979), 
Section 766, which provides: “One who intentionally and improperly interferes with 
the performance of a contract (except a contract to marry) between another and a 
third person by inducing or otherwise causing the third person not to perform the 
contract, is subject to liability to the other for the pecuniary loss resulting to the 
other from the failure of the third person to perform the contract.”  (Emphasis 
 
 
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added.)  Kenty at 418-419, 650 N.E.2d at 866.  Only improper interference with a 
contract is actionable, as reflected in the fourth element of the tort as set forth in the 
Kenty syllabus.  Thus, even if an actor’s interference with another’s contract causes 
damages to be suffered, that interference does not constitute a tort if the interference 
is justified.  “The issue in each case is whether the interference is improper or not 
under the circumstances; whether, upon a consideration of the relative significance 
of the factors involved, the conduct should be permitted without liability, despite its 
effect of harm to another.” 4 Restatement of the Law 2d, Torts, at 28, Section 767, 
Comment b.  We today reaffirm Kenty and hold that establishment of the fourth 
element of the tort of tortious interference with contract, lack of justification, 
requires proof that the defendant’s interference with another’s contract was 
improper. 
 
Bauernschmidt and Arter & Hadden contend that the record creates no 
genuine issue of material fact, and that they are entitled to summary judgment in that 
they were justified in contacting clients of Fred Siegel and soliciting them to change 
legal representation.  They cite several Disciplinary Rules contained in the Code of 
Professional Responsibility and argue that their actions fall within those rules.  They 
further assert that they are entitled to summary judgment because a client has a legal 
right to terminate an existing attorney-client relationship, with or without cause, and 
to hire a new attorney.  Reid, Johnson, Downes, Andrachik & Webster v. Lansberry 
(1994), 68 Ohio St.3d 570, 629 N.E.2d 431, paragraph two of the syllabus. 
 
Appellants argue that DR 2-102(A)(2) authorizes a lawyer to distribute 
professional announcement cards stating “new or changed associations or addresses, 
change of firm name, or similar matters pertaining to the professional offices of a 
lawyer or law firm.”  However, in this case, appellant Bauernschmidt exceeded the 
authorization of DR 2-102.  In her letters to Siegel clients she not only provided 
 
 
9
information as to her change of law firms, but also expressed a willingness to 
continue providing legal services at the new firm (“I would like for us to continue 
our professional relationship.  When you need assistance or have questions, please 
contact me.”).  She thereby solicited Siegel clients to change legal representation. 
 
We note that American Bar Association Model Rule of Professional Conduct 
7.3(c) implies that an attorney may solicit professional employment by making a 
direct written communication to persons with whom the lawyer has a “family or 
prior professional relationship,” without labeling it “Advertising Material.”  
However, the corresponding Ohio rule, DR 2-101(F)(2)(e), provides that where 
written direct mail solicitations are made to persons who may be in need of specific 
legal services, the mailing must include the recital “ADVERTISEMENT ONLY,” of 
specified size and color, both in the text and on the envelope.  No exception from 
this requirement is expressly included in DR 2-101 for communications to family 
and past clients.  However, the Board of Commissioners on Grievances and 
Discipline in Opinion No. 98-5 (Apr. 3, 1998) expressed the view that a departing 
attorney may notify clients of his or her departure from a law firm, identify his or 
her new location of practice, and indicate a willingness to provide services at the 
new location without violating ethical standards. 
 
Appellants further argue that Bauernschmidt not only was permitted but had 
an ethical duty to inform clients with whom she had worked of her departure from 
Siegel.  They cite DR 2-110(A)(2), which imposes a duty upon an attorney who 
intends to “withdraw from employment” to first “take[ ] reasonable steps to avoid 
foreseeable prejudice to the rights of his client, including giving due notice to his 
client, allowing time for employment of other counsel, delivering to the client all 
papers and property to which the client is entitled, and complying with applicable 
 
 
10
laws and rules.”  However, we do not accept appellants’ contention that this rule is 
applicable to the case at bar. 
 
Bauernschmidt herself acknowledged that the parties for whom she worked 
while an associate at the Siegel firm were not “her” clients but were clients of Fred 
Siegel Co., L.P.A.  Although her work as an employee of that firm resulted in the 
establishment of an attorney-client relationship with Siegel clients, Bauernschmidt 
had never entered into a contractual  agreement with those clients under which she 
personally was obligated to provide legal services.  DR 2-110 is designed to avoid 
the danger of a client being left unrepresented upon an attorney’s withdrawal. These 
dangers were not generated when Bauernschmidt left the Siegel firm.  Because 
Bauernschmidt was never employed by Siegel clients, she did not withdraw from 
employment by them, and DR 2-110 is simply not applicable. 
 
Moreover, the fact that a client has a right to discharge his or her attorney, 
pursuant to Reid, Johnson, does not, of itself, provide a competing attorney with 
justification for encouraging the client to exercise that right, and thus does not 
necessarily preclude a finding that a tortious interference with contract has occurred. 
 
We thus reject appellants’ arguments that the Disciplinary Rules they cite 
provide justification for their actions. 
 
In any event, we reject the suggestion that the propriety of an attorney’s 
conduct for purposes of a tortious interference analysis should be determined solely 
by application of the Disciplinary Rules.  The purpose of disciplinary actions is to 
protect the public interest and to ensure that members of the bar are competent to 
practice a profession imbued with the public trust.  Disciplinary Counsel v. Trumbo 
(1996), 76 Ohio St.3d 369, 667 N.E.2d 1186.  These interests are different from the 
purposes underlying tort law, which provides a means of redress to individuals for 
damages suffered as a result of tortious conduct.  Accordingly, violation of the 
 
 
11
Disciplinary Rules does not, in itself, create a private cause of action.  Am. Express 
Travel Related Serv. Co. v. Mandilakis (1996), 111 Ohio App.3d 160, 675 N.E.2d 
1279.  The lower courts in this case correctly recognized that improper solicitation 
of clients in violation of the Disciplinary Rules does not independently constitute a 
tort. 
 
Moreover, the power to determine violations of the Disciplinary Rules is 
reserved to this court.  Melling v. Stralka (1984), 12 Ohio St.3d 105, 12 OBR 149, 
465 N.E.2d 857.  Were we to hold that a lawyer’s compliance with the Code of 
Professional Responsibility is an absolute defense to a claim of tortious interference 
with contract, we would effectively be delegating our authority to determine 
violations of the Disciplinary Rules to the trial courts.  Rather, consistent with our 
adoption in Kenty of Restatement Section 766, which sets forth the elements of 
tortious interference with contract, the propriety of the appellants’ conduct in 
contacting Siegel’s clients and suggesting that they follow Bauernschmidt to Arter 
& Hadden should be determined by applying relevant legal tests as defined in 
Section 766 et seq. of the Restatement. 
 
We therefore adopt Section 767 of the Restatement, which provides 
guidelines to be followed in determining whether an actor’s interference with 
another’s contract is improper.  Accordingly, in determining whether an actor has 
acted improperly in intentionally interfering with a contract or prospective contract 
of another, consideration should be given to the following factors: (a) the nature of 
the actor’s conduct, (b) the actor’s motive, (c) the interests of the other with which 
the actor’s conduct interferes, (d) the interests sought to be advanced by the actor, 
(e) the social interests in protecting the freedom of action of the actor and the 
contractual interests of the other, (f) the proximity or remoteness of the actor’s 
conduct to the interference, and (g) the relations between the parties.  Id. 
 
 
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Within this framework the standards defined in the Disciplinary Rules, which 
govern the conduct of all attorneys, are relevant in determining the propriety of an 
attorney’s conduct in a tortious interference claim pursuant to the Restatement.  See 
Comment c to Section 767, at 32 (“Violation of recognized ethical codes for a 
particular area of business activity or of established customs or practices regarding 
disapproved actions or methods may also be significant in evaluating the nature of 
the actor’s conduct as a factor in determining whether his interference with 
plaintiff’s contractual relations was improper or not.”). 
 
The standards of the Disciplinary Rules are relevant to, but not determinative 
of, the propriety of an attorney’s conduct for purposes of a tortious interference with 
contract claim.  Similarly relevant are the interests of clients in being fully apprised 
of information relevant to their decisionmaking in choosing legal representation and 
appellants’ interests in engaging in constitutionally protected free speech. 
 
Moreover, Section 768 of the Restatement provides that fair competition may 
constitute a proper ground, or justification, for an interference with an existing 
contract that is terminable at will.1  Thus, where an existing contract is terminable at 
will, and where all the elements of Section 768 of the Restatement are met, a 
competitor may take action to attract business, even if that action results in an 
interference with another’s existing contract.  Where a defendant in an action for 
tortious interference with contract establishes that his or her conduct falls within 
Section 768, the factfinder need not balance the factors set forth in Section 767.  See 
Section 767, Comment a, at 27 (“The specific applications in [Section 768] supplant 
the generalization expressed in [Section 767].”). 
 
We today adopt Section 768 of the Restatement and accordingly hold that 
establishment of the privilege of fair competition, as set forth in Section 768 of the 
 
 
13
Restatement, will defeat a claim of tortious interference with contract where the 
contract is terminable at will. 
 
The fact that Siegel clients had a legal right to change their legal 
representation pursuant to Reid, Johnson, 68 Ohio St.3d 570, 629 N.E.2d 431, 
triggers availability of the justification of fair competition provided by Section 768 
of the Restatement, as, by law, their contracts with Siegel were terminable at will.  
The privilege of fair competition has been recognized in the context of the legal 
profession.  Ramirez v. Selles (1989), 308 Ore. 609, 784 P.2d 433; Koeppel v. 
Schroder (1986), 122 A.D.2d 780, 782, 505 N.Y.S.2d 666, 669.  See, also, Hillman, 
Law Firms and Their Partners: The Law and Ethics of Grabbing and Leaving 
(1988), 67 Tex.L.Rev. 1, 22 (“[I]f the interfering party is a competitor and ‘does not 
employ wrongful means,’ interference with an existing terminable-at-will contract, 
or a prospective contractual relation, is not improper.”); Johnson, Solicitation of 
Law Firm Clients by Departing Partners and Associates: Tort, Fiduciary, and 
Disciplinary Liability (1988), 50 U.Pitt.L.Rev. 1, 86 (“Once the attorney-client 
contract is recognized as terminable at will, there can be little doubt as to the 
applicability of section 768 to departure-based solicitation.”). 
 
Pursuant to Section 768, competition is proper if (a) the relation between the 
actor (here Bauernschmidt and Arter & Hadden) and his or her competitor (here 
Siegel) concerns a matter involved in the competition between the actor and the 
other, and (b) the actor does not employ wrongful means, and (c) his action does not 
create or continue an unlawful restraint of trade, and (d) his purpose is at least in 
part to advance his interest in competing with the other.  Thus, appellants would be 
entitled to summary judgment pursuant to Section 768 only if the record establishes 
that each of those elements was met. 
 
 
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We do not find the existence of any genuine issue of fact in this case as to the 
establishment of elements (a), (c), and (d) as outlined above.  We find, however, that 
the record before us reflects unresolved issues of fact as to whether Bauernschmidt 
and Arter & Hadden employed wrongful means in competing with Siegel.  The 
evidence is ambiguous as to whether Bauernschmidt and Arter & Hadden used 
information acquired through improper means in their competitive efforts, e.g., 
information protected as trade secrets, or information as to Siegel’s fee 
arrangements with clients that may have been wrongfully disclosed.  Further 
proceedings are required to determine whether appellants employed wrongful means 
within the contemplation of Restatement Section 768 in competing against Siegel. 
 
We therefore reject appellants’ argument that the record demonstrates the 
existence of justification beyond any genuine issue of material fact so as to defeat 
Siegel’s claims of tortious interference with contract.  We affirm the judgment of the 
court of appeals and remand those claims to the trial court for disposition according 
to the legal principles set forth herein. 
 
Misappropriation of Trade Secrets.  Misappropriation of trade secrets is a 
recognized tort in Ohio for which damages may be obtained.  Wiebold Studio, Inc. v. 
Old World Restorations, Inc. (1985), 19 Ohio App.3d 246, 19 OBR 398, 484 N.E.2d 
280. 
 
In her deposition Bauernschmidt did not deny using the Siegel client list to 
identify recipients and addresses for solicitation mailings.  The appellants conceded 
in the trial court that Bauernschmidt “does not know if she consulted the client list.”  
Appellants nevertheless argue that they were entitled to summary judgment on 
Siegel’s claim of misappropriation of trade secrets because Siegel did not take 
adequate steps to protect the confidentiality of the information in the client list. 
 
 
15
 
During 1992, former R.C. 1333.51(A)(3)2 provided the definition of a “trade 
secret.”  The statute provided that a “trade secret” included any “listing of names, 
addresses, or telephone numbers, which has not been published or disseminated, or 
otherwise become a matter of general public knowledge.”  132 Ohio Laws, Part I, 
676.  The statute provided that such a listing was “presumed to be secret when the 
owner thereof takes measures designed to prevent it, in the ordinary course of 
business, from being available to persons other than those selected by the owner to 
have access thereto for limited purposes.” 
 
A possessor of a potential trade secret must take some active steps to maintain 
its secrecy in order to enjoy presumptive trade secret status, and a claimant asserting 
trade secret status has the burden to identify and demonstrate that the material is 
included in categories of protected information under the statute.  State ex rel. The 
Plain Dealer v. Ohio Dept. of Ins. (1997), 80 Ohio St.3d 513, 525, 687 N.E.2d 661, 
672. 
 
The question whether a particular knowledge or process is a trade secret is, 
however, a question of fact to be determined by the trier of fact upon the greater 
weight of the evidence. Valco Cincinnati, Inc. v. N & D Machining Serv., Inc. 
(1986), 24 Ohio St.3d 41, at 47, 24 OBR 83, at 88, 492 N.E.2d 814, at 819. 
 
Accordingly, we hold that, pursuant to former R.C. 1333.51(A)(3), listings of 
names, addresses, or telephone numbers that have not been published or 
disseminated, or otherwise become a matter of general public knowledge, constitute 
trade secrets if the owner of the list has taken reasonable precautions to protect the 
secrecy of the listing to prevent it from being made available to persons other than 
those selected by the owner to have access to it in furtherance of the owner’s 
purposes. 
 
 
16
 
Siegel claims that Bauernschmidt and Arter & Hadden tortiously 
misappropriated the information contained in Siegel’s client list and used it for their 
own economic gain.  We find that genuine issues of material fact exist precluding 
entry of summary judgment in appellants’ favor on this claim.  The record 
demonstrates that the Siegel client list was maintained on a computer that was 
protected by a password.  Hard copies of the list were stored within office filing 
cabinets, which were sometimes locked.  Fred Siegel testified during deposition that 
he “probably” had told employees that the client list information was confidential 
and not to be removed from the office. 
 
These facts raise a genuine issue of material fact as to whether Siegel took 
reasonable actions to ensure that only authorized persons had access to his client list 
for authorized uses.  Cf. Valco, 24 Ohio St.3d 41, 24 OBR 83, 492 N.E.2d 814 
(finding of trade secret status justified where employer, e.g., kept plant locked, 
screened all visitors, and disclosed drawings contended to be trade secrets only to 
suppliers for bidding purposes and only to employees with specific need for them). 
 
Bauernschmidt and Arter & Hadden further contend that all of the 
information in Siegel’s client lists was a matter of public record, capable of being 
independently assembled into a list, and that this fact precluded a finding that the 
Siegel list qualified as a trade secret. 
 
In Valco we acknowledged, in dicta, that a competitor could obtain and use a 
trade secret where the competitor itself discovered the information by independent 
invention or “reverse engineering,” i.e., starting with a known product and working 
backward to find the method by which it was developed.  Id., 24 Ohio St.3d at 45-
46, 24 OBR at 86, 492 N.E.2d at 818.  In this case, a question of fact exists as to 
whether the appellants, in effect, “independently invented” their own list of property 
 
 
17
owners, resulting in a list similar to the Siegel list, or, whether they simply used 
Siegel’s computer-generated client list. 
 
Where information is alleged to be a trade secret, a factfinder may consider, 
e.g., the amount of effort or money expended in obtaining and developing the 
information, as well as the amount of time and expense it would take for others to 
acquire and duplicate the information.  Plain Dealer, 80 Ohio St.3d at 524-525, 687 
N.E.2d at 672.  The Siegel client list was sixty-three pages in length and included 
the names of property owners, contact persons, addresses, and telephone numbers of 
hundreds of clients.  The extensive accumulation of property owner names, contacts, 
addresses, and phone numbers contained in the Siegel client list may well be shown 
at trial to represent the investment of Siegel time and effort over a long period. 
 
The purpose of Ohio’s trade secret law is to maintain commercial ethics, 
encourage invention, and protect an employer’s investments and proprietary 
information.  Levine v. Beckman (1988), 48 Ohio App.3d 24, 28, 548 N.E.2d 267, 
271.  That purpose would be frustrated were we to except from trade secret status 
any knowledge or process based simply on the fact that the information at issue was 
capable of being independently replicated. 
 
The court of appeals correctly determined that the trial court erred in granting 
summary judgment to  Bauernschmidt and Arter & Hadden on Siegel’s claim of the 
tort of misappropriation of trade secrets. 
 
For the foregoing reasons, the judgment of the court of appeals is affirmed. 
Judgment affirmed 
and cause remanded. 
 
RESNICK, F.E. SWEENEY and LUNDBERG STRATTON, JJ., concur. 
 
DOUGLAS, J., dissents. 
 
 
18
 
PFEIFER, J., concurs in the dissenting opinion of COOK, J., except for the 
section entitled “Modification of the Kenty Test.” 
 
COOK, J., dissents. 
FOOTNOTES: 
1. 
Section 768 of the Restatement of the Law 2d, Torts (1979), provides: 
 
“(1)  One who intentionally causes a third person not to enter into a 
prospective contractual relation with another who is his competitor or not to 
continue an existing contract terminable at will does not interfere improperly with 
the other’s relation if 
 
“(a)  the relation concerns a matter involved in the competition between the 
actor and the other and 
 
“(b)  the actor does not employ wrongful means and 
 
“(c)  his action does not create or continue an unlawful restraint of trade and 
 
“(d)  his purpose is at least in part to advance his interest in competing with 
the other. 
 
“(2)  The fact that one is a competitor of another for the business of a third 
person does not prevent his causing a breach of an existing contract with the other 
from being an improper interference if the contract is not terminable at will.” 
2. 
R.C. 1333.51 was repealed, effective July, 1, 1996. 146 Ohio Laws, Part IV, 
7809.  “Trade secret” is now defined at R.C. 1333.61(D). 
__________________ 
 
COOK, J., dissenting.  I believe that the trial court correctly granted 
summary judgment in favor of Bauernschmidt in this case.  To come to that 
conclusion, I resolve certain underlying issues differently from the majority.  First, 
Siegel clients with whom Bauernschmidt worked were not just Siegel’s clients, but 
also Bauernschmidt’s clients.  Second, the information developed by Siegel as a 
 
 
19
“client list” may be protectable as a trade secret, but the identities of 
Bauernschmidt’s clients cannot be trade secrets.  Third, Bauernschmidt was 
therefore entitled, upon leaving Siegel, to contact those clients with whom she had 
worked while with the Siegel firm.  Fourth, use of the “client list” by 
Bauernschmidt for purposes of preparing a mailing to the clients with whom she 
worked while with the Siegel firm would not amount to misappropriation of the 
trade secret properties of the Siegel client list. 
 
Court of Appeals’ Judgment 
 
The court of appeals held that the client names on Bauernschmidt’s Rolodex 
were properly retained by her because those were names of clients she had 
represented while with the Siegel firm.  Siegel did not appeal that judgment.  The 
law of the case, then, is that Bauernschmidt could properly use those Rolodex cards 
to compile her mailing to Siegel clients she represented while with the Siegel firm. 
 
The court of appeals, however, held that the potential trade secret violation 
here was Bauernschmidt’s use of the client list to compile her mailing list of  
former clients.  The court implicitly distinguished Bauernschmidt’s use of 
“Rolodex names” from her use of the Siegel “client list” based upon the fact that 
the Siegel “client list” included all of Siegel’s clients, not just those clients for 
whom Bauernschmidt worked.  But if the reference to the Rolodex names is no 
violation (given that those clients were her clients as well as the firm’s clients, see 
discussion infra) and those Rolodex names appear in the compilation of all Siegel 
clients, as they necessarily would, then it is incongruous to hold that 
Bauernschmidt’s reference to the Siegel client list for the names of her former 
clients would violate trade secret law.  In other words, it was inconsistent for the 
court of appeals to say that Bauernschmidt could look at her Rolodex to compile 
 
 
20
her mailing, but that she could not reference the client list for the same purpose: 
contacting her former clients. 
 
The court of appeals erred in elevating names of Bauernschmidt’s former 
clients (otherwise permitted to be used) to protectable trade secret status simply 
because those names appeared on Siegel’s client list along with its other clients 
whom Bauernschmidt had not represented. 
 
Dual Status of Clients 
 
Both Siegel and the majority opinion discuss whether the clients 
Bauernschmidt represented while with the Siegel firm are her clients or Siegel’s.  
They are both hers and the firm’s.  The firm has a relationship with the client, but 
the servicing lawyer also has her own lawyer-client relationship.  Siegel 
acknowledges this concept with joint references in the complaint.  At paragraph 
one, the complaint identifies two plaintiffs:  Fred Siegel Co., L.P.A., a licensed 
professional association of attorneys doing business in Ohio, and Fred Siegel, a 
principal member of that licensed professional association.  The complaint then 
repeatedly refers to “plaintiffs’ clients,” thereby implying the clients’ dual status 
as firm clients and also Fred Siegel’s clients. 
 
A Lawyer’s Clients Are Not Eligible for Trade Secret Protection 
 
Clients may not be reserved to any lawyer or firm as a trade secret.  Cases 
from Ohio and other jurisdictions have long held that a client’s right to choose an 
attorney must be free and unfettered.  Disciplinary Rules prohibiting noncompete 
provisions between lawyers (DR 2-108), requirements that client files be returned 
(DR 2-110[A][2]), and other similar doctrines have evolved in recognition of the 
professional and intensely personal nature of the attorney-client relationship. 
 
 
21
 
From Fred Siegel’s deposition testimony, it seemed that in filing this lawsuit 
he misunderstood the state of the law on departure-based communications.  He 
testified that he believed it improper for any lawyer leaving a firm to contact any 
client of the former firm with the intent of seeking to take that client to the new 
firm.  It is from this mistaken perspective that the case proceeded. 
 
This court has recognized that a client has an absolute right to discharge an 
attorney or law firm at any time, with or without cause, subject only to the 
obligation to compensate the attorney or firm for services rendered prior to the 
discharge.  See Reid, Johnson, Downes, Andrachik & Webster v. Lansberry 
(1994), 68 Ohio St.3d 570, 629 N.E.2d 431, paragraph one of the syllabus.  “ ‘The 
attorney-client relationship is consensual, highly fiduciary on the part of counsel, 
and he may do nothing which restricts the right of the client to repose confidence 
in any counsel of his choice. * * * No concept of the practice of the law is more 
deeply rooted.’ ”  Corti v. Fleisher (1981), 93 Ill.App.3d 517, 522-523, 49 Ill.Dec. 
74, 417 N.E.2d 764, 769, quoting Dwyer v. Jung (1975), 133 N.J.Super. 343, 347, 
336 A.2d 498, 500.  “[E]ach person must have the untrammelled right to the 
counsel of his choice.”  Corti at 523, 49 Ill.Dec. 74, 417 N.E.2d at 769. 
 
A departing attorney may notify clients of his or her departure from a law 
firm, identify his or her new location of practice, and indicate a willingness to 
provide legal services at the new location.  Such communication is permitted 
under DR 2-102(A)(1) and (2) and DR 2-103(A).  Respect for a client’s choice 
demonstrates to the client and to the public that the lawyer and law firm are truly 
practicing a profession.  Board of Commissioners on Grievances and Discipline 
(Apr. 3, 1998), Opinion No. 98-5. 
 
 
22
 
Therefore, Bauernschmidt’s former clients cannot be Siegel’s trade secrets.  
Even when a lawyer or firm compiles a client list as Siegel did, the mere listing of 
clients’ names cannot confer trade secret protection. 
 
Limits of Trade Secret Protection of Siegel’s Client List 
 
Useful information formatted into an attorney’s or law firm’s client list, 
however, may be protectable as a trade secret.  Former R.C. 1333.51(A)(3).  The 
statutory language includes lists and  compilations.  The purpose of Ohio’s trade 
secret law is “to maintain standards of commercial ethics * * * as well as the 
protection of the substantial investment of employers in their proprietary 
information.”  Valco Cincinnati, Inc. v. N & D Machining Serv., Inc. (1986), 24 
Ohio St.3d 41, 48, 24 OBR 83, 89, 492 N.E.2d 814, 820, citing Kewanee Oil Co. 
v. Bicron Corp. (1974), 416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315; see, also, 
Levine v. Beckman (1988), 48 Ohio App.3d 24, 28, 548 N.E.2d 267, 271.  Thus, 
trade secret law would protect Siegel’s investment in developing the compilation 
aspects of its client lists — the cross-referencing of a given client’s name with 
parcel numbers, the names of other property owned or managed by that same 
client, billing names and phone numbers, the identity of clients if different from 
the named tax plaintiff, the identity of owners of properties, and the contact people 
of leased property.  If Bauernschmidt and/or Arter & Hadden took from Siegel the 
advantage it had earned through the time and effort invested in compiling such 
information, that usurpation could support a claim for misappropriation of a trade 
secret, provided that Siegel also could prove the secrecy requirements of the claim.  
But Siegel established no issue of fact that Bauernschmidt usurped the protectable 
aspects of its compilation.  Siegel was only able to show that Bauernschmidt may 
have referred to the list during the process of generating a mailing list of her 
 
 
23
former clients.  But the identities of her clients may not be trade secrets, and the 
use of Siegel’s list merely to obtain or double-check addresses, spelling, and the 
like, of only those clients Bauernschmidt worked with is not misappropriation. 
 
Summary Judgment Properly Granted 
 
Because trade secret law does not bar Bauernschmidt’s referring to the 
Siegel client list to contact her former clients, summary judgment in favor of 
Bauernschmidt is properly granted unless Siegel, in its response, put in dispute the 
truth of Bauernschmidt’s claimed limited use of the list. 
 
In Bauernschmidt’s affidavit, she states in paragraph 6:  “The only clients of 
the Siegel firm I contacted were those clients for whom I had done work during 
my tenure at that firm.”  In its response to defendants’ motion for summary 
judgment, Siegel alleged that “[s]olicitation letters * * * were sent to clients of 
[Siegel] with whom defendant Bauernschmidt had never met or worked.” 
 
Fred Siegel testified in his deposition: 
 
“Q.  Do you know of any client that she worked for? 
 
“A.  Specifically?  No, she worked with — there was no restriction on any 
client she worked for, actually, other than if the client directed otherwise which 
they did on occasion. 
 
“Q.  So she could have worked for any client in the office? 
 
“A.  That’s correct. 
 
“Q.  Do you have any information that Mrs. Bauernschmidt now has a client 
formally with your office other than the clients she worked for while at your 
office? 
 
“ * * * 
 
 
24
 
“A.  I know of certain ones that she didn’t work for.  Well, I’m not sure.  I 
can’t answer that question. 
 
“ * * * 
 
“Q.  You don’t know exactly who [sic] she contacted, do you? 
 
“A.  No, but I will find out.  Almost everybody called me and sent me 
copies.” 
 
In later responding to the Bauernschmidt and Arter & Hadden motion for 
summary judgment, Siegel merely reasserted the allegation that solicitation letters 
were sent to clients of the Siegel firm with whom Bauernschmidt did not work.  In 
support, Siegel was unable to offer any evidence beyond the same deposition 
testimony quoted above along with certain nonsupportive deposition testimony 
from Bauernschmidt. 
 
Siegel’s summary judgment response sought to succeed on the inadequacy 
of  Bauernschmidt’s affidavit.  But because Siegel took the position that any 
reference to the client list by Bauernschmidt was a trade secret violation, its 
response failed to raise an issue of fact on the material issue:  whether 
Bauernschmidt contacted Siegel clients other than those with whom she worked.  
The court of appeals’ reversal of summary judgment cannot be sustained based 
only upon Siegel’s suspicions that Bauernschmidt solicited Siegel clients for 
whom she did not work.  The appellants sustained their initial burden by 
submitting, inter alia, Bauernschmidt’s affidavit testimony establishing that the 
only clients who followed her from the Siegel firm to Arter & Hadden were clients 
for whom she had worked.  Siegel did not sustain its reciprocal burden under 
Civ.R. 56(E) to “set forth specific facts showing that there is a genuine issue for 
trial” that Bauernschmidt solicited Siegel clients for whom she had not worked. 
 
 
25
 
The evidence cited by the court of appeals as establishing an issue of fact, 
the matching misspellings from the Siegel client list and Bauernschmidt’s client 
letters, only supports the inference that she looked to Siegel’s client list to prepare 
her letters.  Her limited reference to the client list for the correct mailing 
information for her former clients does not implicate trade secret protections. 
 
Because Siegel has no cause of action for a trade secret violation if there is 
no evidence that Bauernschmidt exceeded her right to contact former clients, 
summary judgment was properly granted.  I would affirm the trial court’s grant of 
summary judgment in favor of Bauernschmidt on Siegel’s claim of 
misappropriation of trade secret. 
 
Tortious Interference 
 
My conclusions on the trade secret issues dictate affirming summary 
judgment for Bauernschmidt on Siegel’s tortious interference claim.  The court of 
appeals held that Siegel’s “business interference [claim] is dependent on whether 
or not the information that Bauernschmidt retained was in fact a trade secret; if so, 
then the use of that information could be found to be tortious.”  Likewise, the 
majority decides to affirm on the basis that the usurping of a trade secret could 
satisfy the “wrongful means” prong of the fair competition analysis found in 
Section 768 of the Restatement of Torts 2d.  Given that Siegel could not refute 
Bauernschmidt’s limited, proper use of the client list, then Bauernschmidt is 
protected by the fair competition privilege discussed in the majority opinion.  
Though the majority also mentions that disclosure of fee information might 
support a finding of wrongful means, the court of appeals’ decision in favor of 
Bauernschmidt on that issue precludes Siegel challenging that here, as Siegel did 
not appeal from the court of appeals’ judgment. 
 
 
26
 
I would reverse the court of appeals’ judgment because the trial court 
properly granted summary judgment in favor of Bauernschmidt on Siegel’s claim 
of tortious interference with contract. 
 
Modification of the Kenty Test 
 
Even if I were to agree with the majority on the disposition of this case, I 
would take this opportunity to modify paragraph two of the syllabus of Kenty v. 
Transamerica Premium Ins. Co. (1995), 72 Ohio St.3d 415, 650 N.E.2d 863, so 
that it agrees with the Restatement of Torts 2d. 
 
The Kenty court, while professing to adopt the elements of tortious 
interference with contract set forth in the Restatement, established that the fourth 
element in proving tortious interference is “lack of justification.”  Id. at 419, 650 
N.E.2d at 866.  The Restatement, however, does not mention “justification” in the 
relevant sections themselves, but only in its introductory note and in its comment 
sections.  See 4 Restatement of the Law 2d, Torts (1979), Sections 766, 767, and 
768.  And when the Restatement does discuss justification, it is to discuss the 
problems with its use as a defense.  Id.  The introductory note discusses alternative 
word choices for the test, including the word “justification,” and concludes by 
stating that “[t]he word adopted for use in this Chapter, neutral enough to acquire 
a specialized meaning of its own for the purposes of the Chapter, is ‘improper.’ ”  
Id. at Introductory Note at 6.  The comments explain the confusion that can result 
by using the language “without justification” in the test because the question then 
becomes “who has the burden to prove what?”  See, e.g., id. at 37-38, Comment k, 
Section 767. 
 
The Kenty court added an element not contained in the recommended 
language of the Restatement and unfortunately distorted the proper test.  
 
 
27
Justification connotes a “lawful excuse or reason.”  Black’s Law Dictionary (6 
Ed.1990) 865.  And according to Black’s, the “[t]erm is not widely used in torts[.]”  
Id. at 866.  The Restatement does not require either party to a tortious-
interference-with-contract action to prove justification or a lack thereof.  Instead, it 
requires that the plaintiff prove improper interference.  According to the 
Restatement, a party may interfere with a contract, and as long as the interference 
is not improper, no tort has been committed.  “Justification” is simply not an 
accurate term for the element required. 
 
Therefore, Kenty’s second syllabus paragraph should be modified to 
coincide with the Restatement so that in Ohio, “[i]n order to recover for a claim of 
intentional interference with a contract, one must prove (1) the existence of a 
contract, (2) the wrongdoer’s knowledge of the contract, (3) the wrongdoer’s 
intentional procurement of the contract’s breach, [(4) by improper means], and (5) 
resulting damages.”  Kenty, 72 Ohio St.3d 415, 650 N.E.2d 863, paragraph two of 
the syllabus.  What constitutes “improper means” is explained in the Restatement.  
See Restatement of Torts 2d at 39, Section 768, and at 39-44, Comments a through 
i.