Cameco, Inc. v. Gedicke

Donald Gedicke (defendant) worked for Cameco, Inc. (plaintiff) as a salaried employee who arranged for Cameco’s food products to be transported to retail stores. After six years, Gedicke and his wife (defendant) started a home business, Newton Transport Service (Newton), arranging the shipping of goods to stores for various companies. After Cameco later fired Gedicke for performance reasons, Cameco learned about Gedicke’s outside business and learned that two of the companies for which Gedicke brokered shipments were Cameco’s competitors. Cameco filed suit, alleging a variety of claims, including breach of a duty of loyalty. A trial court dismissed Cameco’s suit at the close of Cameco’s case without waiting for Gedicke to present his case. The trial court made only general findings of fact. These facts established that Gedicke had started Newton without alerting Cameco. Because Cameco’s business was distributing food and Newton’s business was arranging shipments of goods, Gedicke did not directly compete with Cameco. However, because two companies for which Gedicke arranged transport were Cameco’s competitors, Gedicke did assist his employer’s competitors. The trial court made no findings related to the extent of Gedicke’s assistance. Gedicke acknowledged spending about 30 minutes of his shift on Newton business each day. Gedicke did not sign a noncompetition agreement until after his termination. The trial court dismissed, finding that Gedicke had not breached his duty and Cameco had experienced no damages. An appellate court affirmed the dismissal for each claim except the breach-of-a-duty-of-loyalty claim, ruling that Cameco had established a prima facie case for breach, even though Cameco had not demonstrated damages such as lost sales, profits, or customers. The appellate court ruled that, depending on an employee’s conduct, the duty of loyalty may be breached by the employee simply by assisting an employer’s competitor, and it ordered a new trial. The New Jersey Supreme Court granted certification.