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Sonotone Corp. v. Hayes

Decided: March 4, 1949.

SONOTONE CORPORATION, A CORPORATION OF THE STATE OF NEW YORK, PLAINTIFF,
v.
CHRISTOPHER G. HAYES, HELEN M. DUNN AND THOMAS C. MULLIGAN, DEFENDANTS



Civil action.

Kays, J.s.c.

Kays

This matter came before me on an application for an interlocutory injunction.

The plaintiff is a manufacturer and distributor of hearing aid instruments. Its principal office is at Elmsford, Westchester County, New York. The defendant, Hayes, was employed as its regional manager in North Jersey. He supervised and received commissions on all sales made by the plaintiff's consultant managers in the northern New Jersey region which embraced the plaintiff's offices in Jersey City, Hackensack, Paterson, Bayonne and Ridgewood.

On April 15, 1947, the defendant, Hayes, entered into a written contract with the plaintiff under the terms of which said defendant was granted exclusive sales rights of plaintiff's supplies within a "territory" comprised of designated portions of Hudson, Bergen, Passaic and Essex Counties.

On November 2, 1948, defendant, Hayes, submitted his resignation as regional manager effective December 2, 1948. On November 30, 1948, plaintiff, by letter, discharged said Hayes from its employ alleging violations of his contract and disloyalty to the plaintiff.

The contract contains the following provision:

"38. Upon the expiration or the termination of this contract from any cause whatsoever, Manager agrees that he will not engage directly or indirectly in the business of manufacturing and/or selling any products or devices of the kind or similar to the products or devices at such time being manufactured and sold by Manufacturer or in any way engage in competition with the Manufacturer or any agents or Managers of the Manufacturer, either directly or indirectly as principal or as agent or employee, in the Territory and within an area extending fifty (50) miles on every side thereof, during a period of twelve (12) months from the date of termination or expiration."

The plaintiff's affidavits in support of this application allege a violation of all the foregoing provisions by the defendant, Hayes. It is not disputed that immediately upon the termination of Hayes' employment with the plaintiff,

he undertook another employment with a competitor of the plaintiff's, the Microtone Company. He continued to use the same telephone number and office. In addition, the plaintiff alleges that Hayes is using and has disclosed to the other defendants, Dunn and Mulligan, who make use of the same, the names and addresses of users and prospective users of hearing aids.

Defendant contends that the plaintiff has no standing in this court; that consequently this application should be denied because of paragraph 42 of the contract which reads as follows:

"42. This contract shall be governed by the laws of the State of New York, both as to interpretation and performance. Any difference, dispute or controversy arising between the parties with respect to this contract or performance hereunder, shall be settled by arbitration in accordance with the provisions of the Arbitration Laws of the State of New York and the ...


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