CommunicationsServicesCenter v. Razura

Filed 10/1/07 Communications Services Center v. Razura CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

Respondent Communications Services Center, Inc. (CSC), which does business as Direct Mail Center (DMC), brought this suit for damages and injunctive relief against its former employee, appellant Paul J. Razura, and Razuras present employer, Precise Mailing, Inc. (PMI), a direct competitor of DMC, alleging misappropriation of trade secrets, unfair competition, and interference with and breach of contract. (Civ. Code,  3426 et seq.; Bus & Prof. Code,  17200 et seq.) Finding no monetary damages, the trial court granted injunctive relief only.

We shall determine that the finding Razura and PMI used trade secrets to compete unfairly with DMC is supported by substantial evidence^[1]and that the order granting injunctive relief was not overbroad. Accordingly, because the evidence sufficiently shows DMC is likely to prevail on the merits, we shall affirm the order.

FACTS AND PROCEEDINGS BELOW

CSC and DMC (hereafter referred to collectively as DMC) is a bulk mailer of advertising materials whose principal place of business is San Francisco. Razura, a former salesman for DMC, terminated his employment on May 30, 2006,^[2]and was thereafter hired by PMI. PMI is in the same business as DMC and employed Razura to perform the same services he previously provided DMC.

On January 1, 1997, when he commenced employment with DMC, Razura signed a Communications Services Center Confidentiality and Unfair Competition Agreement (the Confidentiality Agreement) and, at some later date, a Proprietary Information, Inventions, and Non-Disclosure Agreement (the Non-Disclosure Agreement). As material, the Confidentiality Agreement provided that for a period of one year after termination of Employees employment . . . , Employee will not directly or indirectly disclose to any person, firm or corporation any information pertaining to customers or clients of CSC and will not either directly or indirectly solicit business, as to products and services competitive with those of CSC, from any customers or clients of CSC. This agreement further provided that Razura would be given access to DMCs trade secrets, including the prices at which CSC sells or purchases its products or services . . . , and information concerning customers or vendors, or any other confidential information of, about or concerning the business of CSC.

The Non-Disclosure Agreement provided that DMCs confidential information includes all information that has or could have commercial value or other utility in the business in which the Company or Clients are engaged . . . , includ[ing] any and all information concerning the Companys customer lists . . . [and] client provided information (such as mailing list data, client data) . . . . By signing this agreement, Razura agreed that at all times during or after his employment, he . . . will hold in trust, keep confidential, and not disclose to any third party or make any use of the Confidential Information of the Company or Clients . . . . Razura agreed to protect the value of the confidential information and not to disclose or use to his . . . benefit (or the benefit of any third party) or to the detriment of the Company or its Clients any Confidential Information or Invention. Finally, Razura agreed that the Company will be entitled to injunctive relief to enforce this Agreement.

On June 6th, a week after Razuras employment terminated, DMC sent him a letter reminding him in some detail of the prohibitions set forth in the Confidentiality Agreement and stating that the company would be contacting its clients to learn whether he solicited their business for himself or a future employer. Asserting that notebooks, documents, files and the like relating to our business are our property and should be returned to us if it is in your possession, the letter closed with the statement that DMC would initiate legal action against Razura and a future employer if he or the employer violated the agreement, and that, under the agreement you will bear all legal costs and claims for damage.

The complaint alleges that [d]uring the week of June 12-17, 2006, [DMCs] sales personnel began receiving reports from customers stating that they had been solicited by Razura on behalf of his new employer, [PMI]. For instance, one customer reported that Razura offered to undercut [DMCs] pricing (which Razura learned as Confidential Information during his employment with [DMC]). Upon learning of Razuras actions, [DMC] sent letters to Razura and [PMI] demanding that they cease and desist from misuse of [DMCs] trade secrets and from violating Razuras agreements with [DMC] . . . . Neither Razura nor [PMI] responded to [DMCs] demand letters. Thereafter, when [DMCs] Chief Financial Officer, Carmela Hammond, followed up the demand letters with a phone call to ascertain [Razuras and PMIs] intentions, Razura told her to assume he and [PMI] would continue to solicit [DMCs] customers. 

By letter dated June 16th to the chief executive officer of PMI, counsel for DMC sent copies of the two agreements Razura had signed, and requested that within three days PMI agree in writing not to interfere with the contractual obligations those agreements imposed on Razura, and not to conduct business with any third party as a result of a violation of the . . . agreements, and also that PMI return any confidential information of DMC that it may have received from Razura.

The complaint was filed on June 28th, together with an ex parte application for a temporary restraining order, an order to show cause for preliminary injunction, and an order shortening time for hearing, as well as a supporting memorandum of points and authorities. On the same date, and in support of those pleadings, DMC also filed the declarations of Carmela Hammond, its chief financial officer, and Raymond Leung, the DMC account manager. Hammonds five-page declaration relates that on June 20th she called Razura to ask him if he and his boss at [PMI] . . . planned to respond to the written letters we had sent and to comply with our demand that they abide by Mr. Razuras contracts with DMC, and Razura stated: We have nothing to say. There is nothing we need to agree to. During a second phone call the same day, Razura said, I guess so when asked so you are willing to go to jail for this? The remainder of Hammonds declaration describes in detail the nature of DMCs business, the information it maintains in confidence, the uniqueness of that information, its commercial significance to DMC, and the numerous steps DMC has taken to maintain the secrecy of that information. Because it is so central to the chief issue presented, we discuss this portion of the declaration in the course of our legal analysis. (See discussion, post, at pp. 10-13.) In a supplemental declaration filed on June 30th, Hammond related that on June 16th she called PMI, asked to speak to the owner, and eventually spoke with a man named Rocky, who identified himself as the owner. When told Razura was contacting DMC customers in violation of the restrictive agreements he had signed, and he should not solicit our companys customers or else he and Precise Mailing would face legal action, Rocky responded, okay, I wont call your customers. When Hammond said she needed written assurance, Rocky said, do as you please. DMCs demand letter followed, but there was no response to that letter nor any other confirmation of Rockys assurance that Razura would not solicit business from our confidential customer list.

Raymond Leungs declaration set forth the nature of his duties at DMC and the dates and substance of conversations he had with named representatives of four DMC customers who each told Leung he or she had recently been contacted by Razura, who said he was then employed by PMI and was willing to undercut Direct Mail Center pricing on mailing services in order to get her [or his] organizations business.

On June 30th, DMC filed the declarations of Wendy Wang, a DMC account manager, Alexis Geslani, a customer of DMC, and Mely Leung, the President of DMC. Wang stated that she received a request from Razura for copies of the two agreements sent to him on June 6th. Geslani stated that during the week of June 12th Razura left me a voicemail message saying he is now working for Precise Mailing and can give me a better rate than Direct Mail Center on our companys upcoming jobs. In her declaration, Mely Leung authenticated the two agreements Razura had signed and established the fact of his termination, that when he left DMC she reminded Razura of the agreements he signed and the obligations they imposed on him, that several days later Razura requested copies of the agreements, as he wanted to see what he was prohibited from doing, and that she provided copies. Leung also stated that all DMC employees were required in 2005 to sign the Non-Disclosure Agreement because a major bank which Razura had tentatively obtained as a customer, required as a condition of doing business that DMC sign a strict confidentiality agreement to assure the privacy of bank information entrusted to us, and also required that our employees be bound in strict confidence. According to Mely Leung, Razura had the choice to sign the agreement, and receive compensation for the customers business (which he did) or not sign and lose this new account. Razura and everyone else chose to sign the Non-Disclosure Agreement, and at no time did he ever object or claim that he had not signed the Non-Disclosure Agreement.

Razuras and PMIs version of the relevant facts are set forth in Razuras two declarations. In essence, Razura maintained that upon beginning to work for PMI, he telephoned a number of companies with whom I did business while working for DMC . . . . [and] notified [them] I had begun providing services for a different mailing house, PMI. The former clients responded either that they wished me luck and said goodbye or told me that they wanted contact information and quotes for the sort of mailings they did with DMC. Razura maintained he did not further contact former clients that did not actively request contact information. For those who asked for contact information, he requested their email addresses and sent them an email with my contact information and minute information regarding the services of my new employer. During the time he worked for DMC, Razura stated, DMC did not reasonably protect the identity of its clients [and] did not physically secure its paper invoices or work orders . . . , [which] contain customer identity, contact information, and details on the customers individual orders, such as quantity and price. . . . The work orders are kept in an open box next to the common office restroom. UPS drivers, bike messengers, and even the general public regularly use the restrooms. . . . Every employee, including production workers, machine operators, and the janitor, had access to the invoices. According to Razura, DMCs computer system, which contains extensive customer information, is also accessible to nearly all DMC employees.

Razura asserted that DMCs client information may be easily compiled by anyone in the direct mail business. First, there are companies that specialize in compiling lists of details about major mailers [such as] Edith Roman, ALC National Advertisers Database, and Whos Mailing What Archive, three companies that sell lists of companies that advertise through direct mail, contact information, demographic information, and details of the individuals within the companies who purchase advertising, and so forth. Finally, Razura avers, there are numerous ways to determine the identity of local businesses that do direct mail. For example, any store that asks their customers if they want to be on their mailing list will use direct mail. Any companies that mail to my home will obviously use direct mail services, especially local businesses like medical facilities, automobile companies, restaurants, dentists, plumbers. I grew up and have lived my entire life in the San Francisco and Peninsula area and personally have been receiving direct mail for decades. I watch for businesses such as hotels and restaurants that ask for feedback on forms which are compiled into a mailing list. I personally get solicited by numerous non-profit organizations by mail at my home.[^[3]]

In a supplemental declaration filed on July 11, Razura clarified that, with one exception, he never sent an email to a former client who did not expressly ask for his new contact information, and the emails he sent constituted no more than a short pitch remarking that Precise Mailing is competitive with DMC. He also attached to the declaration the text of his email to Alexis Geslani, who, he said, was the only former client he initiated a communication with who had not asked for his new contact information. Razura also claimed that the Non-Disclosure Agreement attached to the complaint as exhibit B is not the agreement Mely Leung referred to as required by a new client, which Razura identified as Wells Fargo Bank. Razura admits he signed a Vendor Personnel Acknowledgment insisted upon by Wells Fargo and attached to his declaration a copy of that document signed by another employee, explaining he was not able to find the copy he signed. Although Razura denied that the Non-Disclosure Agreement attached to the complaint was required by Wells Fargo, he did not in his declarations deny that the signature on that document, which is dated January 3, 1997, is his signature. Razuras supplemental declaration concluded with the statement that the confidentiality of customer information was never discussed while he was employed at DMC.

Prior to the July 13th hearing, the trial court issued a tentative ruling indicating that, in its view, DMC had demonstrated a likelihood of success on the merits, the existence of harm, and a likelihood the harm would continue, and that the court was therefore inclined to grant a preliminary injunction. At the same time, the court expressed its belief that Razura does have the right to contact and solicit potential customers, even if they are current customers of the plaintiff, if [he] finds those customers through publicly available sources, and the court did not want to foreclose that lawful competition. Counsel focused on the amount of the bond plaintiffs would be required to post^[4]and the substance of the job announcements Razura would be permitted to send to potential new customers, including those he served while employed by DMC.

The July 13 order granting preliminary injunction restrained Razura and PMI and all persons acting in concert with them from soliciting DMCs customers, conducting business with any of them Razura had previously solicited in behalf of PMI, and maintaining possession of or disclosing DMCs trade secrets, as defined in the agreements. Razura was also enjoined from violating, and PMI from interfering with, the obligations imposed on him by the agreements. Finally, the order provided that Razura may contact and solicit potential customers whose names appear on and are discoverable through publicly available sources without the use of information Razura acquired while employed by [DMC].

Timely notice of appeal was filed on July 20.

DISCUSSION

On appeal, Razura and PMI ostensibly advance but two contentions: (1) that DMC failed to present substantial evidence that its customer list is a trade secret, and (2) that the order granting injunctive relief is overbroad as a matter of law as it bars Razura from using that customer list to make neutral job announcements. In the course of advancing the first argument, however, appellants make two other really separate claims: that the Confidentiality Agreement constitutes an unenforceable covenant not to compete, and the Non-Disclosure Agreement was induced by fraud.

We shall reject all of appellants claims.

A.

Substantial Evidence Shows that

the Customer List is a Trade Secret

Injunctions in the area of trade secrets are governed by the principles applicable to injunctions in general. (Hilb, Rogal & Hamilton Ins. Services v. Robb (1995) 33 Cal.App.4th 1812, 1820, fn. 4.) In deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction. (Hunt v. Superior Court (1999) 21 Cal.4th 984, 999.)  Generally, the ruling on an application for preliminary injunction rests in the sound discretion of the trial court. The exercise of that discretion will not be disturbed on appeal absent a showing that it has been abused. [Citations.]  [Citation.] (Whyte v. Schlage Lock Co., supra, 101 Cal.App.4th 1443, 1449-1450.)

Whether the trial court granted or denied injunctive relief, the appellate court does not resolve conflicts in the evidence, reweigh the evidence, or assess the credibility of witnesses. (Hilb, Rogal & Hamilton Ins. Services v. Robb, supra, 33 Cal.App.4th at p. 1820) On appeal we do not examine the record to determine whether the trier of fact could have reached a conclusion other than the one reached. Rather, we focus on the conclusions of the trial court, as well as the method by which it arrived at those conclusions, to determine whether they are legally correct and supported by substantial evidence. (Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514, 1519.)

The Uniform Trade Secrets Act (UTSA), which was adopted in this state in 1984 (Civ. Code,  3426 et seq.), embodies the proposition that the right of free competition does not include the right to use confidential work product of others. However, not all information generated during the course of a business enterprise is entitled to protection. The UTSA limits the scope of statutory protection to trade secrets, which are defined in section 3426.1 as follows:

(d) Trade secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and

(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Civ. Code,  3426.1, subd. (d).)^[5]

Where the foregoing definition of a trade secret has been met, customer lists have been held to be protected by the UTSA. (See, e.g., American Credit Indemnity Co. v. Sacks (1989) 213 Cal.App.3d 622; MAI Systems Corp. v. Peak Computer, Inc. (9th Cir. 1993) 991 F.2d 511 (applying California law.) The gist of appellants argument is that the statutory definition has not been met in this case because DMC failed to show that it made efforts to maintain the secrecy of its customer lists that are reasonable under the circumstances, as required by the UTSA. ( 3426.1, subd. (d)(2).) According to appellants, paragraph 11 of the declaration of Carmela Hammond, the primary evidence regarding steps taken by DMC to protect the secrecy of its customer lists, is far too meek, because the company submitted no evidence contradicting Razuras declarations that DMC failed to take reasonable steps to prevent inadvertent disclosure or unintended discovery of [such information]. More specifically, appellants point to Razuras assertion that DMC disclosed the identities of its customers to its printers without instructing or requiring them to maintain the secrecy of this information. Appellants maintain that Razuras position cannot be undermined by the two agreements, because the Confidentiality Agreement is an unenforceable covenant not to compete and he did not sign the Non-Disclosure Agreement (if he did) until 2005.

Appellants main contention, that DMC failed to take reasonable steps to protect the secrecy of its customer lists, relies heavily on Whyte v. Schlage Lock Co., supra, 101 Cal.App.4th 1443. The Whyte court concluded that the employer, Schlage, made reasonable efforts to maintain the secrecy of its trade secret information because, with one significant exception, the information was not publicly disseminated and was subject to a confidentiality agreement signed by company executives, including Whyte; and the court recognized that [r]equiring employees to sign confidentiality agreements is a reasonable step to ensure secrecy. (Id. at p. 1454.) The sole exception was certain line review documents that revealed its product lines, prices, and pricing and marketing concessions. Schlage disclosed these line review documents to The Home Depot, a major retailer that sold locks and related products offered both by Schlage and its fierce competitor Kwikset, which had hired Whyte away from Schlage. Schlage did not have a secrecy agreement with The Home Depot, and the latter therefore presumably could give the line review documents to Kwikset and other Schlage competitors. (Ibid.) The situation in Whyte is very different from the one before us.

As we have said, customer lists can comprise trade secrets.   A list of subscribers of a service, built up by ingenuity, time, labor and expense of the owner over a period of many years is property of the employer, a part of the good will of his business and, in some instances, his entire business. Knowledge of such a list, acquired by an employee by reason of his employment, may not be used by the employee as his own property or to his employers prejudice. [Citation.]  (Greenly v. Cooper (1978) 77 Cal.App.3d 382, 392.) The most obvious difference between Whyte v. Schlage Lock Co. and this case is that the evidence in this case does not show that, like the employer in Whyte, DMC affirmatively disclosed its customer lists to any individual or entity from whom a competitor could likely obtain them. The fact that, as Razura maintains, DMC did not physically secure some materials relating to customers that it kept in its own offices, and that some invoices were located there in a place near a restroom occasionally used by UPS drivers, bike messengers, and even the general public, does not show otherwise. Razura has not claimed, and the evidence does not show, that the paper invoices and work orders assertedly kept in an open box near the restrooms, or the materials given DMC printers, contained the key information described in Carmela Hammonds declaration, or that DMCs printers, UPS drivers, bike messengers, or anyone else who may have used DMCs restroom had a personal or economic interest in that information, or ever perused the invoices and work orders stored in boxes in DMCs office, or that any such persons ever conveyed the information in those materials to any DMC competitor or might have some interest in doing so. In short, the trial court was not obliged to adopt Razuras assessment of the efficacy of DMCs protective measures and reject that of Hammond.

For the most part, appellants simply turn a blind eye to the evidence of DMCs efforts to maintain the secrecy of its customer lists, most of which was provided by Carmela Hammond, the companys chief financial officer. According to Hammond, at considerable expense, DMC developed a proprietary software system that contained not only the identity of its customers and confidential pricing information, but also a formula the company uses that calculates pricing based upon materials, quantities, size, weight and other factors. This software program also includes a database with all information on historical invoicing, including the customer name, address and contact personnel, and the details of each historical invoice (specific advertisement, size, unit price, total cost, date, etc.). This customer information is unique, Hammond states, because: (1) only a small subset of businesses and organizations advertise, and only a smaller subset of those conduct advertising by mass mailings, (2) the history of mass mail advertising by customers (from year to year, season to season, product to product) is not generally known in the industry but is only known to those companies who have conducted business with their customers, and (3) the key personnel and departments within large businesses and organizations that conduct mass mailings are difficult to ascertain without referrals, leads or established relationships. The information DMC placed in its computer was developed [t]hrough referrals, development of leads, and marketing efforts over many years . . . [and] personal relationships with specific individuals in the[] large organizations who purchase mass mailing services. According to Hammond, [t]his information would be difficult for a competitor to discover and utilize absent a long process to cultivate a business relationship with the key personnel in the customers departments who procure mass mailing services.

DMCs database also included small and medium sized companies, which she said are so numerous as to make it impossible for a competitor to canvas them all to determine if they conduct mass mailings. From this large number of potential customers, DMC has distilled its list of more than 1,000 customers, who have been identified, cultivated and serviced through 23 years of ongoing advertising, pursuing leads and acting on referrals from customers.

Finally, Hammond described the efforts it had taken to insure the secrecy of the foregoing information: (1) the confidential information . . . exists in electronic form, access to which is limited by password and company policy to only 5 employees (the president of the company, the CFO, the General Manager and two Account Managers . . . (one of whom was formerly Mr. Razura), (2) the physical customer files kept by the Account Managers are maintained on the companys premises, (3) all employees are required to sign strict confidentiality and non-disclosure agreements as a condition of their employment, . . . and (4) Direct Mail is diligent in policing the security of its trade secrets, as shown by, among other things, the companys efforts to determine whether Razura was complying with those agreements, and to enforce them when it learned he was not.

We pointed out in Morlife, Inc. v. Perry, supra, 56 Cal.App.4th 1514, that courts are reluctant to protect customer lists to the extent they embody information which is readily ascertainable through public sources, such as business directories. (Id. at p. 1521.) But we also made clear that where the employer has expended time and effort identifying customers with particular needs or characteristics, courts will prohibit former employees from using this information to capture a share of the market. (Ibid.) The Hammond declaration and other declarations submitted by DMC make clear not only the time and effort DMC expended in creating its customer lists, but as well the numerous efforts it made to protect the secrecy of that information.

Appellants do not genuinely challenge the force of the Hammond declarations but focus instead on the validity of the two agreements Razura signed, apparently on the theory that the representations in Hammonds declarations are irrelevant if the agreements are unenforceable. According to appellants, Razura did not sign the Non-Disclosure Agreement (which they consistently refer to as the 2005 document) and if it was signed at all, [it] was signed in 2005, not 1997. Furthermore, appellants contend, that agreement was induced by fraud (that is, Mely Leung fraudulently induced Razura into signing the 2005 Document by misrepresenting he would lose the Wells Fargo account if he did not sign it). The Confidentiality Agreement is also unenforceable, appellants claim, because it represents a covenant not to compete in violation of section 16600 of the Business and Professions Code.

These arguments are untenable. To begin with, if Razura was independently aware of the confidential nature of DMCs customer information, and of its reasonable efforts to protect the secrecy of that information, the enforceability (or even the existence) of the agreements would be irrelevant. (See, e.g., Courtesy Temporary Service, Inc. v. Camacho (1990) 222 Cal.App.3d 1278.) The substance and strength of Carmela Hammonds lengthy declaration, which focuses on the many measures DMC took to protect the secrecy of its customer lists, does not depend on the date on which Razura signed the agreement, and it would support the trial courts judgment even if the court had found (which it did not) that the agreements were unenforceable.

We fail to comprehend why the asserted unenforceability of the agreements should vitiate the evidence Hammond provided regarding the protective measures DMC took to protect the secrecy of customer information. The presentation of the agreements to Razura would have put him on notice of the secrecy DMC attached to the information whether or not he signed the agreements and regardless whether they were enforceable. Furthermore, the Hammond declaration suggests Razura knew of the confidentiality of the customer lists for reasons entirely unrelated to the agreements he signed. For example, Hammond states that Razura was one of only five persons at DMC who had password access to the proprietary software that DMC created at considerable expense, and which contained the most important customer information. This information, which Razura does not dispute, independently suggests Razura knew the information in the software program was confidential.

Appellants claims that DMC provided no evidence tending to show that at any time prior to 2005, Razura had any reason to know he should keep secret the identities of DMC customers, and that, during Razuras first eight years at DMC, he had no obligation to keep secret the names of the customers he cultivated, and DMC cannot now claim trade secret protection in the identities of its customers (italics added), are wholly indifferent to the record. To the extent the declarations of Hammond and Razura conflictas, for example, on the issue of whether commercial directories adequately identify potential direct mail customersthe crediting of Hammonds declaration was clearly within the trial courts sound discretion.

Appellants arguments about the validity of the Confidentiality and Non-Disclosure Agreements are unavailing. It is largely irrelevant whether Razura signed the Non-Disclosure Agreement in 2005 rather than 1997, or whether he signed it at all, because the provisions of the Non-Disclosure Agreement largely duplicate those of the Confidentiality Agreement,^[6]which Razura himself admits he signed in 1997. The date the Non-Disclosure Agreement was signed also seems beside the point because Hammonds declaration describes protective measures taken by DMC during the entire period of Razuras employment by the company, not just measures taken after 2005. Nor do appellants adequately justify their claim that the Non-Disclosure Agreement, if signed, was fraudulently induced. As for appellants equivocal intimation that Razura may not have signed the Non-Disclosure Agreement, nothing in the record before us demonstrates that Razura pressed for a ruling from the trial court on this factual question^[7]and, as we have said, it would not change the result here if the agreements were not enforceable.

Finally, Razuras contention that the Confidentially Agreement is an unenforceable covenant not to compete borders on the frivolous, as the agreement clearly does not bar competition. As its text makes eminently clear, the agreement bars solicitationwith the use of proprietary information. DMC consistently acknowledged, as did the trial court, that Razura is free to compete with his former employer, and even to solicit its customers, and is prohibited only from competing with DMC and soliciting its customers with the use of trade secret information. Thompson v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425 and Kolani v. Gluska (1998) 64 Cal.App.4th 402, which appellants rely upon, did not involve the use of trade secrets.

The issue appellants have tendered is simply whether, as they claim, DMCs customer lists do not constitute a trade secret within the meaning of the UTSA (i.e.,  3426.1, subd. (d)), because DMC did not undertake efforts that are reasonable under the circumstances to maintain the secrecy of that information, as required by the statute ( 3426.1, subd. (d)(2)). The record provides substantial evidence that DMC made the necessary efforts to maintain the secrecy of the information at issue.

B.

The Trial Courts Order is Not Overbroad

The trial courts tentative ruling reflected the belief, stated by the trial judge at the hearing, that Razura does have the right to contact and solicit potential customers, even if they are current customers of [DMC], if [Razura] finds those customers through publicly available sources. In response to this acknowledgment, appellants counsel stated that Razuras job announcement should be able to tell potential customers that he was formerly with Direct Mail. DMC opposed this request. Arguing that the job announcements Razura had already sent out were blatant solicitations in violation of the UTSA, DMCs attorney argued that permitting Razura to state that he was formerly employed by DMC would permit him to circumvent the restrictions of the injunction. As counsel emphasized, Razura had already improperly solicited many of DMCs former customers and cannot be trusted to merely, quote, make a job announcement [regarding] the change of employment [that] has already been made. Objecting to this claim, Razuras attorney explained that there were many other potential customers of PMI to whom he wanted to send a carefully-worded job announcement, and the case law permitted him to do so. Expressing the view that his tentative ruling was designed to bar Razura from solicitation, not from sending job announcements, the trial judge stated he would narrowly tailor his final order to make that clear: Im not going to leave it open-ended in light of the evidence that [Razura] viewed as a mere announcement what I view as a solicitation.

As earlier noted, the final order provided that Razura may contact and solicit potential customers whose names appear on and are discoverable through publicly available sources without the use of information Razura acquired while employed by [DMC].

Appellants now maintain that [e]ven if the list of Razuras former clients at DMC is a trade secret . . . the injunction is overbroad in that it prohibits Razura from using the alleged trade secret identity list to make neutral job announcements. Appellants rest this claim on the statement in Reeves v. Hanlon (2004) 33 Cal.4th 1140, that although an individual may violate the UTSA by using a former employers confidential client list to solicit clients, the UTSA does not forbid an individual from announcing a change of employment, even to clients on a protected trade secret client list. [Citations.] As one decision explains, merely announcing a new business affiliation, without more, is not prohibited by the UTSA definition of misappropriation because such conduct is basic to an individuals right to engage in fair competition. [Citations.] (Id. at p. 1156, quoting American Credit Indemnity Co. v. Sacks, supra, 213 Cal.App.3d at p. 636.)

The proposition articulated in Reeves v. Hanlon, supra, 33 Cal.4th 1140 is, of course, unquestionable; but neither that opinion nor any other of which we are aware applies it to a situation like that presented here. The question before the trial court and us is not whether a former employee may communicate a new business affiliation to persons on a former employers protected trade secret client list, but rather whether a former employee who has previously used such a client list in making improper solicitations may thereafter use the list again to make a proper job announcement. As to that situation, we think a trial court has discretion to prevent use of a protected client list even for a purpose that would ordinarily be permissible. The colloquy at the hearing between court and counsel indicates the trial courts fear that, even if it was neutral on its face, a job announcement from Razura would not be treated neutrally by persons whose business Razura had previously solicited improperly. Thus it appears that the court barred Razura from using DMCs customer lists because it felt that would compound the original harm and reward Razuras wrongdoing. As DMC puts it, [a]fter Razura had poisoned the water with his initial solicitations in violation of DMCs rights, the trial court was justified in prohibiting him from using DMCs customer list to cause further injury under the guise of a neutral job announcement.

Relying on People ex rel. Mosk v. National Research Co. of Cal. (1962) 201 Cal.App.2d 765 (National Research), DMC claims that, in the circumstances, the trial court possessed discretion to prohibit Razura from using its customer lists for the purpose of his job announcements. National Research was an action to restrain the defendants from continuing certain allegedly unfair, deceptive and fraudulent business practices. The defendants claimed the judgment granting injunction was too broad because it included activities outside Californias territorial jurisdiction regarding issues not framed by the pleadings. The Court of Appeal agreed the decree extended to forms of activity beyond those sought to be enjoined, but, in the circumstances, did not think the injunction too broad. Observing that because the defendants displayed great ingenuity and resourcefulness in diversifying the types of forms employed and systems used, and the trial court had in mind this protean proclivity of the defendants when it framed its judgment, the court did not abuse its discretion. Equity is not limited in the scope or type of relief which may be granted. Its decrees are molded in accordance with the exigencies of each case and the rights of the persons over whom it has acquired jurisdiction. [Citations.] As the court said in the early case of Wickersham v. Crittenden [(1892)] 93 Cal. 17, 32: It is often necessary, in order that the plaintiff may obtain full justice, that the relief granted him be as varied and diversified as the means that have been employed by the defendant to produce the grievance complained of. Having assumed jurisdiction of the parties and of the subject matter, equity will attempt to make final disposition of the controversy and to that end will render a decree sufficiently comprehensive. [Citations.] In doing so, it may take into consideration circumstances existing at the time the decree is rendered, rather than the facts that attend the commencement of the action. [Citations.] (National Research, at pp. 775-776.)

We believe this principle apt. National Research, supra, 201 Cal.App.2d 765 was not a trade secrets case but, as earlier noted, [i]njunctions in the area of trade secrets are governed by the principles applicable to injunctions in general. (Whyte v. Schlage Lock Co., supra, 101 Cal.App.4th at p. 1449, citing Hilb, Rogal & Hamilton Ins. Services v. Robb, supra, 33 Cal.App.4th at p. 1820, fn. 4.) In light of the solicitation finding made by the trial court, with which we cannot quarrel, the provision of its order prohibiting Razura from contacting and soliciting potential customers whose names Razura acquired while employed by DMC was fully justified.

DISPOSITION

For the foregoing reasons, the order granting preliminary injunction is affirmed. Costs on appeal are awarded to respondent.

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Kline, P.J.

We concur:

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Lambden, J.

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Richman, J.

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^[1]This determination is based only upon the present record and is not a final adjudication on the merits. The ultimate decision determination of trade secret status is subject to proof presented at trial. (Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1453.)

^[2]All dates are in that year unless otherwise indicated.

^[3]Razura attached to his declaration copies of emails he sent former clients as well as promotional materials of the companies he referred to that sell lists of direct mail users to companies such as DMC and PMI. DMC objected to the relevance or absence of foundation for certain statements in Razuras declarations and the attached exhibits.

^[4]The court ultimately lowered the bond amount from the $100,000 specified in its tentative order to $75,000.

^[5]Unless otherwise indicated, all statutory references are to the Civil Code.

^[6]For example, the fourth paragraph of the Confidentiality Agreement, entitled No Disclosure or Use of Trade Secrets, states that, as the party denominated employee, Razura will have access to and become acquainted with information of a confidential, proprietary or secret nature (trade secrets), which might include compilations of information, records, the prices at which [DMC] sells . . . its products or services . . . and information concerning its customers and that he shall not disclose, directly or indirectly, any trade secret or confidential information obtained during the course of [his] employment with [DMC]; or use such trade secret or confidential information in any way . . . except as required in the course of employment with [DMC].

^[7]Appellants written opposition to the motion for preliminary injunction was limited to two claims: (1) that DMCs Customer List is Not a Trade Secret Since Information of Companies That Use Direct Mail is Readily Available from Many Sources, and (2) that DMCs Customer List is Not a Trade Secret Since DMC Did Not Take Reasonable Steps to Protect the Secrecy of Its [Customer] List. Neither did appellants argue orally at the hearing on the motion for preliminary injunction that the Confidentiality Agreement was an unenforceable covenant not to compete or that the Non-Disclosure Agreement was fraudulently induced. The only indication in the record that appellant even raised issues about the validity of the agreements in the trial court is the declaration of respondents attorney, which states that at the hearing on respondents ex parte application for a temporary restraining order, which was not transcribed, appellants attorney represented that the Non-Disclosure Agreement which is Exhibit B to the Verified Complaint had not been signed by Mr. Razura, that his signature was not genuine, that the handwritten entries were not his and that Razura did not reside at the address stated at the time of execution recited in the document.