Lowndes Products v. Brower

191 S.E.2d 761 (1972)

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Lowndes Products v. Brower

South Carolina Supreme Court
191 S.E.2d 761 (1972)

CS

Facts

Claude Brower, Billy Loftin, and Ralph Stanford (defendants) were key employees of Lowndes Products, Inc. (Lowndes) (plaintiff), a textile manufacturer. In mid-1969, Brower, Loftin, and Stanford started a competing company, B.L.S. Corporation (B.L.S.) (defendant), with the financial backing of four members of the Sabee family (defendants). Stanford left Lowndes earlier that year, and in May 1969, Stanford, Brower, and Loftin met with some of the Sabee family members to discuss the new venture. Brower, who was the manager of Lowndes’s manufacturing plant, and Loftin left Lowndes in June 1969 and commenced operations at B.L.S. shortly thereafter. Brower and Loftin departed Lowndes without providing notice and induced other Lowndes employees to depart with them, which left Lowndes’s manufacturing plant in complete disarray. Brower also allegedly took valuable and confidential records of Lowndes. In addition, while still employed by Lowndes, Brower and Loftin formed their business relationship with one of the Sabee family members who was a significant Lowndes customer, which effectively ended Lowndes’s relationship with that customer. Brower, Loftin, and Stanford had no employment, noncompetition, or similar agreements with Lowndes. Lowndes sued Brower, Loftin, Stanford, the four Sabee family members, and B.L.S., seeking injunctive relief for misappropriation of trade secrets and damages for breach of the duty of loyalty. The trial court denied injunctive relief because the trial court found that Lowndes failed to take sufficient precautions to protect its trade secrets and denied damages because the trial court found that, despite being harmful to Lowndes, the departure of Brower, Loftin, and the other employees did not prevent Lowndes from effectively functioning. Lowndes appealed.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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