Procter & Gamble Co. v. Stoneham

Procter & Gamble Co. (Procter & Gamble) (plaintiff) was a large corporation that manufactured, among other things, hair-care products. Paul Stoneham (defendant) was a senior-level manager at Procter & Gamble. Stoneham was responsible for the international marketing of Procter & Gamble’s hair-conditioning products. He compiled data that Procter & Gamble obtained on foreign markets and created models. Stoneham had access to plans to develop and introduce new hair-conditioning products, and he helped create a confidential 10-year plan to market Procter & Gamble’s best-selling conditioner. When Stoneham was first hired at Procter & Gamble, he signed a confidentiality agreement. After being at Procter & Gamble for 10 years, Stoneham was offered company stock options in return for signing a noncompete agreement that prohibited Stoneham from working for a competitor for three years after leaving Procter & Gamble. Stoneham signed the noncompete agreement. After working for Procter & Gamble for 13 years, Stoneham left for a job as president of the international arm of Alberto-Culver. Alberto-Culver manufactured some hair conditioners that competed with Procter & Gamble’s hair conditioners. Procter & Gamble sued Stoneham for breach of his noncompete agreement and misappropriation of trade secrets. The trial court dismissed Proctor & Gamble’s claims, holding that Procter & Gamble had failed to show that either: (1) the parties had an enforceable noncompete agreement or (2) Stoneham had been exposed to confidential information and trade secrets. Procter & Gamble appealed.