Court Opinion

ID: 9745569
Source: CourtListenerOpinion
Date Created: 2023-08-26 23:10:13.081124+00
Date Added: 2024-06-11T12:26:31.292076
License: Public Domain

HAERLE, J., Concurring.
I find this an extremely troubling case. With great reluctance, I concur in the majority’s opinion, but on the ground—and only on the ground—that the trial court’s key finding of fact that respondent’s “customer list” was a trade secret is supported by substantial evidence. But I think the margin by which it is so supported is about an inch and a half. Put another way, were I the trial judge looking at this record, I would almost certainly have come out differently than the trial judge here did. But our role is to defer to the trier of fact where there is substantial evidence, so defer I do—albeit with great trepidation.
The genesis for about 50 percent of that trepidation is because I take very seriously that part of the holding of our Supreme Court in Continental Car-Na-Var Corp. v. Moseley (1944) 24 Cal.2d 104, 110 [148 P.2d 9] (Moseley), which stresses that a “former employee has the right to engage in a competitive business for himself and to enter into competition with his former employer, even for the business of those who had formerly been the customers of his former employer” provided, of course, that such is done *1530fairly and legally. I am concerned that perhaps the trial court’s statement of decision derives in part from the unstated premise that the shoe is, as it were, on the other foot and that there is a quasi-presumption that an employee can’t leave his or her employment and go into competition with the former employer for the business of those customers. I hope this is not now and never will be the law.
The other 50 percent of my trepidation derives from the record in this case, a record that I submit far more supports the appellants’ position than that of respondent. In the first place, it deserves to be stressed that appellants were never accused of taking any part of the “customer information . . . stored on [a] computer with restricted access” to which the majority refers. (Maj. opn., ante, at p. 1523.) Mr. Perry took only a collection of business cards with peoples’ names and phone numbers on them, plus obviously his memory. It bears noting that lots of former sales employees have done similar things and not been held to have violated Civil Code section 3426.1. (See, e.g., American Paper & Packaging Products, Inc. v. Kirgan (1986) 183 Cal.App.3d 1318, 1326 [228 Cal.Rptr. 713]; Scott v. Snelling and Snelling, Inc. (N.D.Cal. 1990) 732 F.Supp. 1034, 1044-1045.)
I think it is also noteworthy that, of the four former Morlife customers who testified, only three (at the maximum; appellants argue it is only two) testified they were solicited by appellants. From this sparse record, the trial court “inferred” that all 32 customers on a list prepared and introduced into evidence by the respondent were illegally solicited by appellants. This is a distressingly small sample from which to make such a large inferential leap. But far more troubling is that from this “base” of three solicited customers, the injunction precludes solicitation of not only the thirty-two on respondent’s list but also “any individual or entity that did business with [respondent] before [appellants] stopped working there, and of which they acquired knowledge in the course of their employment with [respondent].”
Thus, based on the testimony of three former Morlife customers (the fourth clearly testified she approached appellants), the trial court decided to enjoin appellants from soliciting any Morlife customer “of which they acquired knowledge in the course of their employment” with respondent. This extreme breadth, and its narrow evidentiary basis, carries the concepts of inferences to be logically drawn from the evidence and the discretion of a court of equity almost to the breaking point.
I think the record supplies more than ample evidence that (a) even without Burlingame, Morlife had competition in its roofing contracting business and (b) that competition, plus Burlingame, knew full well who likely customers *1531were. I understand that the trial court found that to the contrary, i.e., that such identity “is not generally known to the roofing industry” and I reluctantly concede that evidence sufficient to meet our liberal “substantial evidence” standard exists in support of that conclusion. But I am still troubled by it, not only because I think the bulk of the evidence points the other way, but also because I think the conclusion is belied by the combination of common sense and no more than an elemental understanding about how such areas of the private sector actually work.
I have one final concern about the decree appealed from here: its length. The trial court used the term “indefinitely” in its statement of decision and “permanently” in its injunction. It included in the former a pregnant footnote (fn. 2) to the effect that “[tjermination of the injunction may be sought, of course, pursuant to Civil Code section 3426.2(a).” I hope it is, because the law under the operative sections is that “[ijnjunctive relief should only last as long as is necessary to preserve the rights of parties,” i.e., “only as long as is necessary to eliminate the commercial advantage that a person would obtain through misappropriation.” (American Paper & Packaging Products, Inc. v. Kirgan, supra, 183 Cal.App.3d at p. 1326.) This injunction was entered over a year ago, and I trust the trial court will consider, as and when such an application is made to it, whether the time span suggested in Moseley may well have already run.