177 F. Supp. 3d 1103
N.D. Ill.2016Background
- Allied Waste hired Brian Tibbie in 2010 and promoted him twice, most recently to Sales Manager in July 2014; with the 2014 promotion he signed an updated Non-competition, Non-solicitation and Confidentiality Agreement.
- The Agreement barred Tibbie from rendering a range of services for Allied competitors within his area of responsibility for 12 months post‑employment and prohibited use/disclosure of Allied’s confidential information for five years.
- Tibbie voluntarily resigned in November 2015 (≈15 months after signing the Agreement) and took a Sales Manager position with Lakeshore, a direct competitor in the same region.
- Shortly before resigning, Tibbie emailed Allied confidential customer/pricing information to his personal email.
- Allied sued for breach of contract and misappropriation of trade secrets (ITSA), and Tibbie moved to dismiss under Rule 12(b)(6) arguing inadequate consideration, overbroad/unenforceable restrictive covenants, and insufficient pleading of trade-secret misappropriation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of consideration for the restrictive covenant | Agreement supported by promotion, raise, increased bonus opportunity, and continued employment (15 mo.) | At‑will employment plus 15 months post‑signing is insufficient; Illinois appellate bright‑line 2‑year rule controls | Court predicts Illinois Supreme Court would favor fact‑specific test; 15 months may suffice depending on facts — dismissal denied on this ground |
| Reasonableness (scope/time/geography) of non‑compete | Restriction is limited in time (12 mo.) and tied to Tibbie’s area of responsibility; not facially unreasonable given role and access | Provisions are overbroad (broad definition of services, competitors, and affiliates) | Not patently unreasonable on pleadings; factual development required — dismissal denied |
| Confidentiality provision duration and breadth | Definition limits protection to non‑public/trade‑secret information; legitimate interest in protecting pricing/customer data | Provision overbroad in duration/geography and may cover non‑trade‑secret information | Whether covered information is a trade secret is a factual question; provision survives pleading stage |
| Misappropriation of trade secrets (ITSA) — inevitable disclosure theory | Alleged access to 2016 confidential strategy, emailed confidential data pre‑resignation, now working for main competitor — disclosure is inevitable | Plaintiff must plead more than fear; needs concrete proof of misuse | Allegations suffice to plead inevitable disclosure at pleading stage; ITSA claim not dismissed |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard and accepting allegations as true on Rule 12(b)(6))
- Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540 (7th Cir. 2007) (court may examine contract attached to complaint)
- Fifield v. Premier Dealer Servs., Inc., 993 N.E.2d 938 (Ill. App. Ct. 2013) (appellate discussion endorsing a two‑year post‑signing rule)
- Brown & Brown, Inc. v. Mudron, 887 N.E.2d 437 (Ill. App. Ct. 2008) (continued employment of two years generally constitutes adequate consideration)
- Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d 393 (Ill. 2012) (restrictive‑covenant validity requires totality‑of‑circumstances analysis)
- Allstate Ins. Co. v. Menards, Inc., 285 F.3d 630 (7th Cir. 2002) (federal courts must predict how state supreme court would decide unclear state‑law issues)