Court Opinion

ID: 9642488
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:59:43.682567+00
Date Added: 2024-06-11T18:10:48.422071
License: Public Domain

John A. Fogleman, Justice, dissenting. Since I feel that the majority has unduly limited the legitimate area of protection by a covenant not to compete, I must dissent. I do not consider the distinctions made between this case and Orkin Exterminating Co. v. Murrell, 212 Ark. 449, 206 S.W. 2d 185 to afford adequate basis to justify failure to apply its principles. The “trade secrets” or confidential information involved here is far different from that in Rector-Phillips-Morse v. Vroman, 213 Ark. 750, 489 S.W. 2d 1. There this court said that a trade secret may be defined as a secret formula, method, or device that gives one an advantage over competitors. Admittedly, Orkin’s confidential technical manuals told its sales and service personnel how to service its customers. An Orkin employee taught Weaver procedures. Confidential technical bulletins prepared by Orkin’s research and development section disseminated among its employees disclose the latest ideas and recommendations of the employer in treating procedures and on chemicals that can or cannot be used in particular areas. The chemicals are not specifically found on the market, but since federal law requires that the ingredients be shown on a label, an employee could learn which chemicals to buy on the open market in order to provide service to a customer. Orkin has patent rights, not on the chemicals, but on the mixtures. One can buy the chemicals that go into Orkin’s mixtures but not the mixtures. To operate successfully in the pest control business, one must have a working knowledge of the problems that could be encountered in a particular business being served, of the various insects that might be anticipated, how they multiply, where and how they hibernate, the areas to be searched, the particular chemical to be used to treat the specific infestations found, the strength to be achieved by mixing chemicals, and the types of areas in which applications should or should not be made. All these techniques, chemicals and application procedures are kept confidential. Weaver did have access to all Orkin’s mixtures of chemicals, methods of application and techniques, all of which were confidential. Weaver attended four or five statewide school sessions. The information he received there was confidential. He admits that 90% of his training came from Orkin. Weaver named 18 concerns as some of the customers he now services who were once customers of Orkin, but said that he was not completely sure about them. He was sure that he serviced customers that were once those of Orkin. His wife did actively solicit some of them. He testified that he did not solicit them “directly”. The strange coincidence of Orkin’s customers requesting service by Weaver might be explained by his across-the-coffee type method of saying that he was in business for himself, instead of just walking up to the customers and saying, “Can I have your business?”, which he said he did not do. It seems to me that the competition against which Orkin sought to protect itself in this action was unfair. It also seems to me that the manner in which Weaver became a competitor is worthy of consideration. His present partner, Majors, was also a former Orkin employee who left Orkin shortly before Weaver was fired. Weaver, after having worked for Orkin for 7Vi years, and with full knowledge that his employer required the filing of daily reports, was terminated for failure to file them for a two week period. Within two or three days, he was associated with Majors, first with another company and then in a partnership. All his work was in Pine Bluff and southeast Arkansas. He was in direct competition with Orkin. While Weaver had not had access to Or kin’s master customer list during the 7 Vi year period, he did become familiar with the customers on his own route list. The customers he did not “directly” solicit, but who contacted him “directly” knew him through Orkin. He simply professed to believe that his contract did not apply if he was fired. Any information needed by a salesman could be obtained from the customer list. He could get the general customer list for the Pine Bluff area, by asking, at least about a specific individual. Pine Bluff, Rison, and from Sheridan to Helena and Stuttgart, constituted Weaver’s route. He received a list of customers on his route every day, consisting of 15 to 20 names each. Somehow he knew that Orkin had about 850 customers when he left. I daresay this is the first such Orkin contract held invalid at the appellate level. See Grace v. Orkin Exterminating Co., 255 S.W. 2d 279 (Tex. Civ. App. 1953); Orkin Exterminating Co. v. Veal, 355 S.W. 2d 831 (Tex. Civ. App. 1962); Orkin Exterminating Co., Inc. v. Wilson, 501 S.W. 2d 408 (Tex. Civ. App. 1973); Orkin Exterminating Co. v. Wilson, 227 N.C. 96, 40 S.E. 2d 696 (1946); Orkin Exterminating Co. of Raleigh v. Griffin, 258 N.C. 179, 128 S.E. 2d 139 (1962); Orkin Exterminating Co. Inc. of South Georgia v. Mills, 218 Ga. 340, 127 S.E. 2d 796 (1962) See also, Thomas v. Orkin Termite Co., Inc., 222 Ga. 207, 149 S.E. 2d 85 (1966); Orkin Exterminating Co. v. Gill, 222 Ga. 760, 152 S.E. 2d 411 (1966); Rider v. Orkin Exterminating Co., 224 Ga. 145, 160 S.W. 2d 381 (1968). While appellate review has been rendered more difficult because the contract is not abstracted, I do feel that Orkin had property rights in its mixtures, techniques, procedures, business secrets and research developments, and that they were entitled to have them protected. I cannot agree that only ordinary competition is involved here. Insofar as the territorial restriction is concerned, I think ^ that, to say the least, the less restrictive area could easily be upheld, without the court making a contract for the parties. I do not think that the larger territory was unreasonable. I would reverse the decree.