under a rule of the company, properly admitted in evidence, that "any employee executing an assignment of wages will be liable to immediate discharge," but on September 23, 1915, when informed of his loss of employment by the plaintiff's counsel declined to act, and deliberately insisted upon the enforcement of the alleged assignment. It was not until the plaintiff, who, finding that he could not be reinstated unless the assignment was withdrawn, went to the defendant's place of business "and presented himself for identification," and procured an "order for the release of his wages," that his employment was restored October 2, 1915.

EMPLOYER AND EMPLOYEE-SERVICE LETTER-RIGHT OF ACTION FOR FAILURE TO FURNISH-CONSTITUTIONALITY OF STATUTE-BLACKLIST-Check v. Prudential Insurance Co. of America, Supreme Court of Missouri (Feb. 20, 1917), 192 Southwestern Reporter, page 387.Robert T. Cheek brought action for damages against the company named, and judgment was rendered in favor of the company on demurrer, the St. Louis circuit court holding that the two counts of the plaintiff's petition did not properly state a cause of action. The petition set forth that the plaintiff had for 10 years been a solicitor of industrial and other life insurance, and was qualified only for such employment, and especially, on account of several years of residence there, for such work in St. Louis. The first count was based upon the failure of the company on demand after he had quit its service, after 14 years of employment, to furnish him a service letter. Section 3020 of the Revised Statutes of 1909 requires that such a letter shall be given by corporations to employees of over 90 days' standing leaving employment, the letter to state the nature of the service rendered and the true cause of the severance of the relation. The second count alleged conspiracy on the part of the company and its two principal competitors to blacklist employees who had left the service of any one of them. Damage by reason of loss of employment resulting from these wrongs was alleged. The supreme court reversed the judgment of the lower court, holding the petition good and remanding the case for trial. The company contended that the statute relating to the letter of dismissal, while levying a penalty for violation, did not provide a basis for private action for damages; also that the statute was unconstitutional. These contentions were overthrown by the opinion delivered by Judge Woodson, who said as to the purpose of the act:

Prior to the enactment of this statute a custom had grown up in this State, among railroad and other corporations, not to employ any applicant for a position until he gave the name of his last employer, and upon receiving the name, it would write to said former employer, making inquiry as to the cause of the applicant's discharge, if dis

charged, or his cause for leaving the service of such former company. If the information furnished was not satisfactory, the applicant was refused employment. This custom became so widespread and affected such vast numbers of laboring people it became a public evil. and worked great injustice and oppression upon large numbers of persons who earned their bread by the sweat of their faces.

The statute quoted was enacted for the purpose of regulating that custom, not to destroy it (for it contained some good and useful elements, enabling the corporations of the State to ascertain the degree of the intelligence as well as the honesty, capacity, and efficiency of those whom they wished to employ, for whose conduct they are responsible to the public and their fellow employees), and thereby remedy the evil which flowed therefrom.

As to the right of action by an individual injured because of a violation of the statute, he said in part:

The best and clearest rule I have been able to find governing the construction of such statutes is stated in 1 Corpus Juris, p. 957, in the following language:

"The true rule is said to be that the question should be determined by a construction of the provisions of the particular statute and according to whether it appears that the duty imposed is merely for the benefit of the public and the fine, or penalty, a means of enforcing its duty and punishing a breach thereof, or whether the duty imposed is also for the benefit of particular individuals, or classes of individuals. If the case falls within the first class, the public remedy by fine, or penalty, is exclusive, but if the case falls within the second class a private action may be maintained, particularly where the injured party is not entitled, or not exclusively entitled, to the penalty imposed."

This statute was enacted for the protection of the public, and for the benefit of the employees of corporations who had become victims of said custom, as shown by the authorities previously cited. The contention is therefore decided in favor of the appellant and against the respondent, and we hold that the statute gives the plaintiff a cause of action.

At this point the court showed that it is not the duty of the superintendent personally, but of the corporation through him, to furnish the letter. Taking up the question of constitutionality, and of the conspiracy to blacklist, it was said:

It is insisted by counsel for defendant that said section 3020 is violative of the "Constitution of Missouri, in that it is discriminatory, class legislation, and infringes right of free speech"; also that it violates the "Constitution of the United States, in that it deprives the respondent of its liberty to contract without due process of law."

The statute under consideration was enacted in pursuance of the police power of the State, and in no manner discriminates against the respondent; it applies to all corporations doing business in this State. Nor can this statute be declared class legislation.

This statute embraces within its provisions all persons and things which naturally and reasonably belong to the same class and simi



larly situated, and it operates equally and uniformly upon all of them, and is not limited to only a portion of the persons and things which rationally belong to the same class. Similar statutes of Georgia and Kansas have been held unconstitutional and void by the Supreme Court of each of those States. Wallace v. R. Co., 94 Ga. 732, 22 S. E. 579 [Bul. No. 2, p. 201]; Atchison, etc. R. Co. v. Brown, So Kans. 312, 102 Pac. 459 [Bul. No. 84, p. 416].

In my opinion the Georgia case and the Kansas case are not in line with the spirit of similar statutes nor the spirit of this progressive age, which is to protect and shield the public and the wage earner from bodily injury, and to remove him from injurious cliques and combinations formed by others to control his right to work and labor for himself and those who are dependent upon him; otherwise, the effect would be to pauperize him and his family, as well as all other wage earners similarly situated.

That a foreign corporation has no inherent right to exist or to do business in this State is no longer an open question. It derives those rights from the State, impressed with such conditions and burdens as the State may deem proper to impose, and when such a corporation comes into this State to do business, it must conform to the laws of this State, and will not be heard to complain of the unconstitutionality of our police regulations.

Moreover, when a corporation of this State, or one doing business herein, employs a person to work for it, it thereby, by necessary implication at least, agrees with him to give him a letter of clearance when he leaves the company, as provided for by said statute, for the reason that said statute becomes a part of every such contract.

It is finally insisted by counsel for plaintiff that the demurrer to the second count of the petition was improperly sustained. This count charges that certain foreign corporations, including the defendant, doing business in this State, writing life and industrial policies of insurance, made an unlawful agreement whereby each agreed with the other not to employ within a period of two years any person leaving the service of the other company, or who had been discharged by it, and that said agreement resulted in the inability of the plaintiff to find employment in the line of work in which alone he could earn a living.

It is not contended that such corporation may not employ whomsoever it will; but that is not this case. Here the agreement or combination pleaded gave said companies a monopoly in said business, which prevented the plaintiff from obtaining employment from any one engaged in that business, thereby depriving him of his legal right to follow his chosen occupation.

While the petition may be somewhat inartificially drawn, yet, in our opinion, it states facts suflicient to constitute a good cause of action against the respondent, under the constitution, common law, or the statute, or all of them collectively.

For the reasons stated, we are of the opinion that the action of the court sustaining the demurrer to each of the counts of the petition was erroneous, and that the judgment should be reversed, and the cause remanded for trial.

EMPLOYER AND EMPLOYEE-TRADE SECRETS INJUNCTIONS-E. I. Du Pont de Nemours Powder Co., et al. v. Masland et al., Supreme Court of the United States (May 21, 1917), 37 Supreme Court Reporter, page 575.-The company named applied to a United States district court for an injunction to prevent Walter E. Masland, a former employee, from using or disclosing secret processes with which he had become familiar while in its service. He admitted that he intended to engage in the manufacture of artificial leather, to which some of the processes related, but denied that he intended to use any trade secrets that he had learned in confidential relations with the company. He, however, averred that many of the things claimed by the company were well known to the trade. At first a preliminary injunction was refused, but the defendant proposed before the final hearing to make disclosures to experts whom he would employ, sufficient to insure proper preparation for his defense. The district court thereupon issued a preliminary injunction against disclosing any of the company's alleged processes to any one except counsel, with leave to move to dissolve the injunction should occasion to consult experts arise. Later a motion to dissolve was denied. The circuit court of appeals reversed the decree, and the matter was taken to the Supreme Court by writ of certiorari. The latter decision was there reversed, it being held that the district court properly granted an injunction against disclosure to experts, leaving the court opportunity to control the extent and method of such disclosure if any should prove necessary. Mr. Justice Holmes delivered the opinion, which, after a statement of the facts, continues as follows:

The case has been considered as presenting a conflict between a right of property and a right to make a full defense; and it is said that if the disclosure is forbidden to one who denies that there is a trade secret, the merits of his defense are adjudged against him before he has a chance to be heard or to prove his case. We approach the question somewhat differently. The word "property" as applied to trade-marks and trade secrets is an unanalyzed expression of certain secondary consequences of the primary fact that the law makes some rudimentary requirements of good faith. Whether the plaintiffs have any valuable secret or not the defendant knows the facts. whatever they are, through a special confidence that he accepted. The property may be denied, but the confidence can not be. There fore the starting point for the present matter is not property or due process of law, but that the defendant stood in confidential relations with the plaintiffs, or one of them. These have given place to hostility, and the first thing to be made sure of is that the defendant shall not fraudulently abuse the trust reposed in him. It is the usual incident of confidential relations. If there is any disadvantage in the fact that he knew the plaintiffs' secrets, he must take the burden with the good.

The injunction asked by the plaintiffs forbade only the disclosure of processes claimed by them, including the disclosure to experts or

witnesses produced during the taking of proofs, but excepting the defendant's counsel. Some broader and ambiguous words that crept into the decree, seemingly by mistake, may be taken as stricken out and left on one side. This injunction would not prevent the defendant from directing questions that should bring out whatever public facts were nearest to the alleged secrets. Indeed, it is hard to see why it does not leave the plaintiffs' rights somewhat illusory. No very clear ground as yet has been shown for going further. But the judge who tries the case will know the secrets, and if, in his opinion and discretion, it should be advisable and necessary to take in others, nothing will prevent his doing so. It will be understood that if, in the opinion of the trial judge, it is or should become necessary to reveal the secrets to others, it will rest in the judge's discretion to determine whether, to whom, and under what precautions, the revelation should be made.

EMPLOYER AND EMPLOYEE-TRADE SECRETS-LIST OF CUSTOMERSINJUNCTION—“RECEIVING" BUSINESS-New Method Laundry Co. v. MacCann, Supreme Court of California (Dec. 15, 1916), 161 Pacific Reporter, page 990.-The company named, engaged in the laundry business in the city of Oakland, bought from John W. MacCann a laundry route formerly operated by him, and employed him as a driver and solicitor upon it. He carried on this route for five years, keeping a list of customers, with the day of the week when each expected his unlaundered articles to be called for. On April 5, 1913, MacCann left the employ of the company, and began soliciting for a rival laundry from the same customers. On petition by the company for an injunction against this practice the superior court of Alameda County granted such an injunction, restraining MacCann "from soliciting, but not from receiving" such work. The company appealed, contending that the injunction should, as had been the practice in previous similar suits, restrain the receiving of business. Judge Lawlor, who delivered the opinion in the supreme court, referred to the leading case of Empire Steam Laundry Co. v. Lozier, 165 Cal. 95, 130 Pac. 1180 (Bul. No. 152, p. 51), which established the doctrine that such lists of customers constitute a trade secret, against the violation of which the employer may have a perpetual injunction. He noted that while the injunction in that case prohibited receiving laundry work, the exact point had been raised in the present case for the first time. The conclusion reached was that the judgment below should be affirmed in its original form. As to the question of the prohibition of receiving work, he said in part:

Coincident with the right of the employer to the protection of his trade secrets against their unwarranted disclosure to or unconscionable use by persons not entitled thereto, is the right of all per

« ForrigeFortsett »