COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60996 CHEMCLEAR INC., : : : : JOURNAL ENTRY Plaintiff-Appellant : : AND vs. : : OPINION AMERIWASTE ENVIRONMENTAL : SERVICES, INC., ET AL. : : : Defendant-Appellees : : DATE OF ANNOUNCEMENT OF DECISION: JULY 16, 1992 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court No. 177533 JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: PHILIP Z. VOGEL 601 Rockwell Avenue, Suite 610 Cleveland, Ohio 44114 For Defendant-Appellees: GEORGE POKORNY 660 Southland Plaza 6929 West 130 Street Parma Heights, Ohio 44130 ROBERT J. BABCOCK 5566 Pearl Road Parma, Ohio 44129-2541 - 2 - KRUPANSKY, J.: Plaintiff corporation appeals from the order of the trial court granting defendants' motions for directed verdicts at the close of all the evidence. The within action was decided on questions of law and the jury was not permitted to deliberate. The relevant facts follow: Plaintiff Chemclear, Inc. (hereinafter "Chemclear") is a disposal and treatment company of hazardous and non-hazardous industrial waste. Defendants are the following: 1) Theodore Virostek, former marketing manager of plaintiff; 2) Robert Joseph, former technical sales representative of plaintiff; and 3) Ameriwaste Environmental Services, Inc. (hereinafter "Ameriwaste"), a company which Virostek and Joseph incorporated just prior to the time they left Chemclear's employ. Ameriwaste does business in competition with Chemclear because it provides "brokerage disposal service" to industrial waste producers. Chemclear was acquired by Clean Harbors, a Massachusetts corporation, in January, 1989. At the time of merger, the employees of Chemclear were informed that changes would occur in job responsibilities and salaries. For Virostek and Joseph, this meant that their overall compensation would be significantly reduced. Both defendants were employees-at-will of Chemclear. Neither had a written employment contract and neither had made an agreement concerning trade secrets or covenants not to compete. - 3 - Dissatisfied with the corporate changes at Chemclear, both defendants decided in early 1989 to resign their positions at Chemclear. Virostek tendered his notice to Chemclear on February 1 24, 1989; Joseph tendered his notice on March 8, 1989. Prior to giving their formal notice, however, they caused Ameriwaste to be incorporated on February 15, 1989. Ameriwaste began doing business on April 1, 1989. Advertisements were sent to potential customers, including customers of Chemclear. Moreover, Virostek and Joseph personally solicited Chemclear's customers for Ameriwaste. Chemclear subsequently filed a complaint in the Cuyahoga County Court of Common Pleas against defendants, seeking an injunction, compensatory and punitive damages. In its complaint, Chemclear alleged in pertinent part the following: 5. This litigation is intended to enjoin and restrain defendants, and defendants' agents and employees, from diverting the trade and patronage of plaintiff's customers to defendants, to restrain and enjoin defendants, and defendants' agents and employees, from using confidential trade secrets gained during the term of their employment with plaintiff, and to restrain and enjoin defendants, and defendants' agents and employees from engaging in unfair competition with plaintiff. *** 6. Since its formation, plaintiff has expended large amounts of time, effort and resources to identify and secure a select 1 Although both defendants gave two weeks' notice of their intention to leave Chemclear's employment, neither was permitted to work for Chemclear after tendering his notice. - 4 - group of customers for its highly specialized business. 7. The customers obtained by plaintiff have been compiled into original customer lists, which lists include the name of individual contacts for each customer, detailed information of each customer's needs and prior usage, and pricing information. 8. The detailed information comprising these lists constitute one of the most valuable trade secrets of plaintiff's business. 9. These lists have not become matters of public knowledge. 10. At, or about, the time defendants, Virostek and Joseph, left the employ of plaintiff, they reproduced said lists with the intent to convert the information contained therein to their own use. 11. During the course of their employment with plaintiff, defendants, Virostek and Joseph, received original customer lists, which lists include the names of plaintiff's customers, along with the names of individual contacts for each customer, detailed information of each customer's needs and prior usage, and pricing information. 12. The information contained in these customer lists was intended solely for the use of plaintiff in its business, and is not available to anyone outside of plaintiff's employ. 13. At, or about, the time defendants, Virostek and Joseph, left the employ of plaintiff, they knowingly, without the consent of plaintiff, furnished or disclosed the information contained in said customer lists to defendant, Ameriwaste. (Emphasis added.) - 5 - Defendants answered denying the allegations contained in the complaint. Discovery was taken in the case; thereafter, the case proceeded to trial by jury. At the close of plaintiff's case, defendants made joint motions for directed verdicts pursuant to Civ. R. 50(A). The trial court denied the motions. Subsequently, however, at the close of all the evidence, defendants renewed their Civ. R. 50(A) motions and the trial court granted the motions for directed verdicts. In rendering its decision, the trial court noted that plaintiff's complaint had stated two causes of action, viz., conversion of trade secrets and unfair competition. With regard to the first cause of action, i.e., conversion of trade secrets, the trial court referred to R.C. 1333.51. The trial court acknowledged its prerogative to determine, based upon the statutory definition contain in R.C. 1333.51, whether particular information is a "trade secret." Plaintiff's proof on this issue was legally insufficient since much of Chemclear's customer information was listed in public reference sources; the trial court stated in pertinent part the following: We have the Ohio Harris Directory and the Pennsylvania Harris Directory. This information is, to a great extent included in the information available through those particular reference sources, which are rather thorough in their covering. And so, it would appear that the exclusivity contemplated by the statute is, insofar as that aspect of trade secrets, not - 6 - present. It's available to anyone who buys the book or looks at the book. The trial court then determined that since the information used by defendants for Ameriwaste was either listed in the directories or had been gained by Virostek and Joseph prior to their employment by Chemclear the information did not fit the statutory requirement that it be "exclusive" to Chemclear. Furthermore, the trial court considered as part of the basis for its decision Chemclear's security measures, viz., "the barbed wire fence, the TV monitors, the security people." Based upon this evidence it is clear that reasonable minds could come to only the conclusion such measures were taken not to protect the information but to protect Chemclear's premises since "very little if any" security measures "were taken with respect to employees." Thus, in conclusion, the trial court stated the following: It is the belief of this Court that the plaintiff has fallen far short of the evidence required to establish conversion of trade secrets. (Emphasis added.) With regard to the second cause of action, viz., unfair competition, there was insufficient evidence that defendant's conduct fell "within the prescription of the law of Ohio." Moreover, the trial court stated that plaintiff's proof concerning any damages sustained as a result of defendant's actions was purely speculative. - 7 - Based upon the evidence, the trial court granted defendants' motions for directed verdicts at the close of all the evidence. Plaintiff thereafter filed a timely notice of appeal from the judgment of the trial court citing three assignments of error for review. Plaintiff's first assignment of error follows: THE COURT ERRED IN GRANTING DEFENDANTS' MOTION FOR A DIRECTED VERDICT ON THE CLAIM OF APPROPRIATION OF TRADE SECRETS. This assignment of error lacks merit. Plaintiff argues it presented adequate evidence to overcome defendants' Civ. R. 50(A) motions for a directed verdict. It contends the information it sought to protect was a "trade secret" within the meaning of R.C. 1333.51(A) since it was not "generally available" and plaintiff took measures to protect its secrecy. Plaintiff's argument is unpersuasive. Civ. R. 50 states in pertinent part the following: (A) Motion for directed verdict. (1) When made. A motion for a directed verdict may be made on the opening statement of the opponent, at the close of the opponent's evidence or at the close of all the evidence. * * * (4) When Granted on the Evidence. When a motion for a directed verdict has been properly made, and the trial court, after construing the evidence most strongly in favor of the party against whom the motion is directed, finds that upon any determinative issue reasonable minds could come to but one conclusion upon the evidence submitted and - 8 - that conclusion is adverse to such party, the court shall sustain the motion and direct a verdict for the moving party as to that issue. (Emphasis added.) Regarding a motion for a directed verdict, the Ohio Supreme Court has stated as follows: When a motion for a directed verdict is entered, what is being tested is a question of law; that is, the legal sufficiency of the evidence to take the case to the jury. This does not involve weighing the evidence or trying the credibility of witnesses; it is in the nature of a demurrer to the evidence and assumes the truth of the evidence supporting the facts essential to the claim of the party against whom the motion is directed, and gives to that party the benefit of all reasonable inferences from that evidence. The evidence is granted its most favorable interpretation and is considered as establishing every material fact it tends to prove. The "reasonable minds" test of Civ. R. 50(A)(4) calls upon the court only to determine whether there exists any evidence of substantial probative value in support of that party's claim. See Hamden Lodge v. Ohio Fuel Gas Co. (1934), 127 Ohio St. 469. Weighing evidence connotes finding facts from the evidence submitted; no such role is undertaken by the court in considering a motion for a directed verdict. A motion for a directed verdict raises a question of law because it examines the materiality of the evidence, as opposed to the conclusions to be drawn from the evidence. (Emphasis added.) Ruta v. Breckenridge-Remy Co. (1982), 69 Ohio St. 2d 66 at 68, 69. Thus, the court noted the following: Simply because resolution of a question of law involves a consideration of the evidence does not mean that the question of law is converted into a question of fact or that a factual issue is raised. - 9 - Id. at 68. See also Eldridge v. Firestone Tire & Rubber Co. (1985), 24 Ohio App. 3d 94. In the case sub judice, pursuant to Civ. R. 50(E), the facts plaintiff presented were not enough to meet its burden of proof on the legal issues, i.e., there was insufficient evidence to establish the information was a "trade secret" within the meaning of R.C. 1333.51 since plaintiff failed to prove either that the information was generally unavailable or that plaintiff took measures to ensure its secrecy. [I]t is the duty of the trial court to direct a verdict in defendant's favor when there is no evidence tending to prove an essential element of the plaintiff's cause of action. [Citations omitted.] Hutchinson v. Sun Refining & Marketing Co. (July 14, 1988), Cuyahoga App. No. 54140, unreported. In the case sub judice, it was essential to plaintiff's cause of action that defendants possessed plaintiff's "trade secret." R.C. 1333.51(A)(3) sets forth the definition of "trade secret" as follows: (3) "Trade secret" means the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula or improvement, or any business plans, financial information, or listing of names, addresses, or telephone numbers, which has not been published or disseminated, or otherwise, become a matter of general public knowledge. Such scientific or technical information, design, process, procedure, formula, or improvement, or any business plans, financial information, or - 10 - listing of names, addresses, or telephone numbers is presumed to be secret when the owner thereof takes measures designed to prevent it, in the ordinary course of business, from being available to persons other than those selected by the owner to have access thereto for limited purposes. (Emphasis added.) The issue of whether particular information is a trade secret under R.C. 1333.51 is a factual determination for the trial court, therefore, the trial court must consider the evidence and base its decision upon the evidence. Water Management, Inc. v. Stayanchi (1984), 15 Ohio St. 3d 83. The particular information in question must be scrutinized according to the standards set forth in the statute. State, ex rel. Jacobs, v. Prudoff (1986), 30 Ohio App. 3d 89. Factors to be considered by a trial court in recognizing a trade secret are: (1) the extent to which the information is known outside the business, (2) the extent to which it is known to those inside the business, i.e., by the employees, (3) the precautions taken by the holder of the trade secret to guard the secrecy of the information, (4) the savings effected and the value to the holder in having the information as against competitors, (5) the amount of effort or money expended in obtaining and developing the information, and (6) the amount of time and expense it would take for others to acquire and duplicate the information. Pyromatics, Inc. v. Petruziello (1983), 7 Ohio App. 3d 131, headnote number 2. In determining whether information constitutes a "trade secret," the trial court must engage in a two-step analysis; - 11 - viz., (1) the extent to which the information is known outside the business; and (2) the precautions taken to guard the secrecy of the information. Water Management, Inc. v. Stayanchi, supra. See, also, Scully v. The Cleveland Stevadore Co. (Apr. 11, 1991), Cuyahoga App. No. 58397, unreported. Regarding the first step of the analysis, the Supreme Court of Ohio has stated the following: Construing Ohio's trade secret law, the Supreme Court of the United States, in Kewanee Oil Co. v. Bicron Corp. (1974), 415 U.S. 470 [69 O.O.2d 235], noted at 481 that one of the stated policies of such trade secret law is "[t]he maintenance of standards of commercial ethics ***." Often cited as explaining the nature of a trade secret is the opinion of Justice Oliver Wendell Holmes in E. I. DuPont de Nemours Powder Co. v. Masland (1917), 244 U.S. 100, wherein it was observed that trade secret laws are not those of property but the equitable principles of good faith applicable to confidential relationships. The employer who has discovered or developed trade secrets is protected against unauthorized disclosure or use, not because he has a property interest in the trade secrets but because the trade secrets were made known to the employee in a confidential relationship. Generally, under trade secret statutes, that which is proscribed is the misappropriation of the information obtained from the person holding the trade secret, whether such secret is obtained without the owner's consent, or originally with the owner's consent, and later converted to the use and gain of the one obtaining the secret. * * * - 12 - Underlying almost every case in which a former employee is accused of the unauthorized disclosure or use of trade secrets is the matter of balancing or reconciling "*** the conflicting rights of an employer to enjoy the use of secret processes and devices which were developed through his own initiative and investment and the right of employees to earn a livelihood by utilizing their personal skill, knowledge and experience." [Citations omitted.] A balancing of these two interests may be facilitated by distinguishing between knowledge and skill that is general in the trade as a whole and "secret" knowledge which is acquired particularly and specifically from the employer. (Emphasis added.) Valco Cincinnati, Inc. v. N & D Machinery Service, Inc. (1986), 24 Ohio St. 3d 41. In its brief on appeal, Chemclear contends the "trade secret" it sought to protect was not merely a "customer list" but customer information consisting of "waste stream designations, price calculations, and customer output history *** intimate knowledge of buying habits and requirements." At trial, however, one of Chemclear's admissions was that it identified potential customers by research and review of public records and public information regarding waste generators. Moreover, the trial court considered reports available from the Ohio Environmental Protection Agency and entered into evidence. These public reports listed the companies which produce hazardous waste, the business in which the company engaged, and the waste disposal sites the companies utilized. - 13 - Plaintiff's witness Jon Dixon testified Chemclear's "customer lists" included pricing information which, for each customer, identified the waste, the prices of the chemicals needed to treat the waste, and the cost for disposal. Based upon the evidence and the testimony of Ross Hulec, however, reasonable minds could only conclude that this information was also available to defendants through several independent means, viz., (1) a person with knowledge in the field could make an assumption that a company generated particular types of industrial waste by consulting a state publication entitled "the Harris guides," which lists names, addresses and businesses in which companies engage; (2) a person with knowledge in the field could visit a company's facility and determine from observation waste disposal needs; and (3) Virostek and Joseph had gained knowledge of some customers' needs prior to becoming employed with Chemclear and used that knowledge in soliciting customers for Ameriwaste. The evidence further clearly showed Ameriwaste followed generally the same procedures as Chemclear in creating its customer information. Ameriwaste's customer information was developed by testing the waste and pricing its disposal. Defendants' witnesses further testified that the customers would generally quote the price they were paying for waste disposal in order to obtain a competitive bid. Thus, in the case sub judice, there was no evidence that (1) the information Chemclear sought to protect was "unique" to - 14 - Chemclear; (2) no competitor generated information "exactly like" Chemclear's; and (3) the information was distinctive to Chemclear because Chemclear created and developed it only after years of effort in "experimentation, testing and field experience" which no other competitor could duplicate. Valco Cincinnati, Inc. v. N & D Machining Service, Inc., supra, at 46. The trial court also determined the second part of the analysis was not met in the case sub judice; viz., the precautions taken to guard the secrecy of Chemclear's information were negligible. Plaintiff's witness admitted that the barbed wire fence, no trespassing signs, camera surveillance and security guards were necessary to protect its facility, not the information. Moreover, the evidence established that many different employees from several departments had ready access to Chemclear's customer information. Furthermore, Virostek and Joseph were employees-at-will who neither had been requested to nor had signed any agreement with Chemclear concerning trade secrets or covenants not to compete. Thus, Chemclear took insufficient precautions to qualify its customer information as a "trade secret." Water Management, Inc. v. Stayanchi, supra; Scully v. The Cleveland Stevadore Co., supra. After construing the evidence most strongly in favor of plaintiff in the case sub judice, reasonable minds could come to only the conclusion that plaintiff did not possess a "trade secret" - 15 - within the meaning of R.C. 1333.51(A). Accordingly, the trial court properly granted defendants' Civ. R. 50(A) motions for a directed verdict and plaintiff's first assignment of error is overruled. Plaintiff's second assignment of error follows: THE COURT ERRED IN GRANTING DEFENDANTS' MOTION FOR A DIRECTED VERDICT ON THE CLAIM OF UNFAIR COMPETITION. This assignment of error also lacks merit. Plaintiff argues the evidence adduced at trial that defendants engaged in unfair competition was sufficient to overcome defendants' Civ. R. 50(A) motions for a directed verdict. This argument is unpersuasive. This court has already determined plaintiff did not possess a "trade secret." In Curry v. Marquart (1937), 133 Ohio St. 77, the court stated in its headnote the following: In the absence of an express contract not to engage in a competitive pursuit, an employee, upon taking a new employment in a competing business, may solicit for his employer the trade or business of his former customers and will not be enjoined from so doing at the instance of his former employer where there is no disclosure or use of trade secrets or confidential information relative to the trade or business in which he had been engaged and which he had secured in the course of his former employment. In the case sub judice, plaintiff admitted neither Virostek nor Joseph had a written employment contract with Chemclear; plaintiff also admitted no written non-disclosure agreement existed. Moreover, the company handbook made no reference to any - 16 - such requirement. Cf., Parma International, Inc. v. Robert Herman (Feb. 16, 1989), Cuyahoga App. No. 54243, unreported. Furthermore, Virostek and Joseph both testified they had gained some customer information prior to their employment with Chemclear. On these facts, therefore, the trial court did not err in directing a verdict on the issue of unfair competition. Ruta v. Breckenridge-Remy Co., supra. Therefore, plaintiff's second assignment of error is also overruled. Plaintiff's third assignment of error follows: THE COURT ERRED IN GRANTING DEFENDANTS' MOTION FOR A DIRECTED VERDICT ON THE ISSUE OF DAMAGES. This assignment of error also lacks merit. Plaintiff argues it provided the trial court with proof of lost profits which was "reasonably certain"; therefore, it has met the test set forth by this court in Kenetico, Inc. v. Independent Ohio Nail Co. (1984), 19 Ohio App. 3d 26. Plaintiff further contends that the proof was sufficient to sustain an award of punitive damages. Plaintiff's arguments are unavailing, however, since plaintiff failed to present enough evidence to sustain its cause of action. After construing the evidence in the case sub judice most strongly in favor of plaintiff, reasonable minds could come to but one conclusion based upon the evidence submitted, i.e., - 17 - plaintiff failed to present sufficient evidence that it possessed trade secrets and that defendants engaged in unfair competition. After a complete review of the transcript, this case presented a question of law and it was proper for the trial court to grant defendants' motions for directed verdicts. It is axiomatic, therefore, there is no issue of actual damages for this court to determine. Saxton v. Matejka (May 28, 1992), Cuyahoga App. No. 59985, unreported. Since there is no issue of actual damages, there is also no issue of punitive damages. Cf., Bishop v. Grdina (1985), 20 Ohio St. 3d 26. Accordingly, plaintiff's third assignment of error is also overruled. The judgment of the trial court is thus affirmed in its entirety. - 18 - It is ordered that appellee(s) recover of appellant(s) costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. DAVID T. MATIA, C.J., and DYKE, J., CONCUR JUDGE BLANCHE KRUPANSKY N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journaliza- tion, at which time it will become the judgment and order of the court and time period for review will begin to run. .