independent company and the predecessor of Ecolab's Chemical
Pioneer division) were sold to Ecolab. Included among the
assets sold were its customer list, which included the accounts
Elliott had sold to Chemical Pioneer, Inc. and the good will of
Chemical Pioneer, Inc. Five Hundred Thousand Dollars of the
$1,500,000.00 purchase price for the assets was attributed to
the customer list, and another $250,000.00 was designated for
the purchase of the trade name and good will of Chemical
Pioneer, Inc. (T. 206-9, 215-9).
Defendant South Nassau is engaged in the same business as,
and is a competitor of, Ecolab and Ecolab's Chemical Pioneer
division. (T. 75-7, 411).
III. The Employment of Defendants Paolo and Elliott
From 1985 to August 4, 1987, defendants Paolo and Elliott
were employed by Chemical Pioneer, Inc. Prior to August 4,
1987, Chemical Pioneer, Inc. engaged in the same business as
that in which Ecolab, the Chemical Pioneer division, and South
Nassau are presently engaged. (T. 206-9).
When Elliott first became employed by Chemical Pioneer in
1985, he sold fourteen customer accounts and the associated
good will to Chemical Pioneer, Inc. for approximately seventeen
thousand dollars. Included among these customer accounts were
the New Yorker Restaurant, TT's Landing (which has reopened
under the name the Harbor Club), John Anthony's Restaurant,
CoCo's, Huntington Hospital, and Baldwin Schools. (T. 208-9,
217-9, 512-3, 559, 580).
In 1988, Ecolab paid Paolo and Elliott total compensation of
approximately $45,000.00 and $50,000.00, respectively. In 1989,
Ecolab paid Paolo and Elliott total compensation of
approximately $44,000.00 and $43,000.00, respectively. In
addition to compensation, Paolo and Elliott received from
Ecolab $51.00 per week for expenses; health benefits, including
major medical, hospital and dental coverage; and long and short
term disability insurance. Ecolab also furnished each with the
use of a company automobile and provided each with a
non-contributory pension plan. (T. 42-45).
During Paolo's and Elliott's last year of employment with
Ecolab, annual sales to the accounts assigned to Paolo were
approximately $400,000.00, and annual sales to the accounts
assigned to Elliott were approximately $500,000.00. (T. 59,
IV. The Employment Agreements
On or about August 4, 1987, Paolo and Elliott each signed an
employment agreement with Ecolab, as well as a document stating
that each had received and read copies of Ecolab's Code of
Conduct. Entering into the employment agreement was a condition
of employment with Ecolab. However, Paolo and Elliott, as well
as all others presented with the agreement, were permitted the
opportunity to have an attorney review the agreement before
signing. In their employment applications, both agreed to
conform to Ecolab's rules and regulations. (T. 14-18, 26-27,
518-9, Pl. Exhibits 1-7).
The employment agreements signed by Paolo and Elliott each
provided, at paragraph 5, that following termination of the
employee's employment with Ecolab, the employee would not
service, sell, solicit the sale of, or accept orders for
products or services competitive with those of Ecolab to or
from customers of Ecolab with whom the employee did business,
whose accounts were assigned to the employee, or with regard to
which the employee received commissions during the last twelve
(12) months of the employee's employment with Ecolab, and would
not assist others in such activities. (Pl. Exhibits 1-2).
Each of the employment agreements also provided:
"2. . . . The Company will provide the Employee
with special techniques and information,
including CONFIDENTIAL INFORMATION, which the
Company believes will be helpful and necessary
to the performance of the Employee's duties.
CONFIDENTIAL INFORMATION means information and
trade secrets not generally known about the
Company's business such as,
but not limited to, credit information on the
Company's customers, customer route books, cards,
or lists containing the names, addresses, buying
habits and business locations of past, present and
prospective customers, sales reports, service
reports, price lists, product formulae and methods
and procedures relating to services.
3. The Employee will not at any time, both during
and after his employment by the Company,
communicate or disclose to any person, firm or
corporation, or use for his benefit or for the
benefit of any other person, firm or
corporation, directly or indirectly, any of the
Company's CONFIDENTIAL INFORMATION acquired by
the Employee while employed by the Company.
6. Upon termination of his employment, the
Employee will return in good order all customer
information including route books, sales and
service reports and recaps, sales and service
manuals and literature, price books, samples,
Company-issued tools, equipment and parts and
any other written information in the Employee's
possession, custody or control concerning
customers, products or services of the Company.
. . ."
Upon signing of their employment agreements with Ecolab,
Paolo and Elliott became territory managers of Ecolab's
Chemical Pioneer division. This division was formed from the
assets acquired by Ecolab from Chemical Pioneer, Inc.