2:21-cv-00937
E.D. Wis.Oct 8, 2021Background
- Jacquelyn Mages worked for Courtney Industrial (later acquired by Concentric, LLC) and, after the acquisition, accepted a Reserve Power Sales role and signed an Employment Agreement that included confidentiality (2 years), non-solicitation (2 years), and non-compete (1 year) provisions.
- The Agreement defines “Protected Information,” “Protected Customer,” and a multi-part definition of “Competitor” and restricts post‑employment sales/marketing to customers Mages had responsibility for or regular contact with during the relevant period.
- Mages resigned after two years and began working for American Power Systems (APS), a competing power-systems seller.
- A TDS Telecom purchase-order e-mail thread showed Mages (now at APS) responding about a battery order and cancelling one order; Concentric alleges duplicative orders and that Mages failed to return confidential information and solicited/serviced a Protected Customer.
- Concentric sued Mages and APS for breach of contract (including breach of restrictive covenants) and tortious interference, and moved for a temporary restraining order and preliminary injunction to prevent further alleged harm.
- The court denied the TRO/PI because Concentric failed to show a likelihood of success on the merits (insufficient evidence of breach) and failed to show irreparable harm or lack of an adequate remedy at law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of restrictive covenants (consideration & reasonableness) | Agreement supported by consideration; covenants are reasonable and necessary to protect Concentric's confidential info and customer relationships | No valid consideration (signed after start); non-compete overbroad and oppressive | Court: There is some likelihood Concentric can show consideration and that covenants may be reasonable (i.e., enforceable) but this does not resolve the motion in Concentric's favor on the merits |
| Failure to return confidential information | Mages refused to return Concentric’s confidential materials upon resignation and demand | Mages produced declaration, e-mail, and photos indicating she returned materials; Concentric offered no supporting evidence | Court: Concentric failed to present evidence; Mages’ evidence undermines the claim—no likelihood of success on this breach theory |
| Solicitation/servicing of TDS (breach of non-solicit/non-compete) | Mages solicited and serviced a Protected Customer (TDS) for APS within restricted period | Interaction was limited to a brief e-mail exchange to cancel an APS order; APS had preexisting relationship with TDS; no evidence Mages solicited or procured further business | Court: Isolated e-mails insufficient to show solicitation or servicing that violates covenants; no likelihood of success on breach claim |
| Tortious interference (with Mages' contract and with TDS) | APS interfered by employing Mages in violation of covenants and by fulfilling TDS orders through her | Interference claims depend on a breach of covenants; Concentric produced no evidence APS fulfilled orders via Mages | Court: Claims are contingent on proving breach; because Concentric failed to show breach, its interference claims lack a likelihood of success |
Key Cases Cited
- Cassell v. Snyders, 990 F.3d 539 (7th Cir. 2021) (standards governing preliminary injunctions)
- Winter v. NRDC, Inc., 555 U.S. 7 (2008) (preliminary injunction is an extraordinary remedy)
- Mazurek v. Armstrong, 520 U.S. 968 (1997) (same on the extraordinary nature of injunctive relief)
- Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of Am. Inc., 549 F.3d 1079 (7th Cir. 2008) (three threshold requirements for preliminary injunction)
- Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6 (7th Cir. 1992) (likelihood of success and irreparable harm framework)
- Runzheimer Int'l, Ltd. v. Friedlen, 362 Wis. 2d 100 (2015) (Wisconsin law on enforceability of restrictive covenants)
- Star Direct, Inc. v. Dal Pra, 319 Wis. 2d 274 (2009) (Wisconsin reasonableness factors for non-compete enforcement)
- Lakeside Oil Co. v. Slutsky, 8 Wis. 2d 157 (1959) (historic Wisconsin factors for restrictive covenants)
- Goodman v. Ill. Dep't of Fin. & Prof'l Regulation, 430 F.3d 432 (7th Cir. 2005) (TRO standard reiterating extraordinary nature of temporary relief)