Cumulus Radio Corp. v. Olson
80 F. Supp. 3d 900
C.D. Ill.2015Background
- Cumulus Radio hired Joseph Olson as an account executive under a written employment agreement (effective April 1, 2013) that included: a 6‑month, 60‑mile noncompete, a 12‑month nonsolicitation (limited to customers Olson contacted on Cumulus’s behalf), and a 12‑month nondisclosure clause for confidential information.
- Olson resigned after ~21 months (January 7, 2015) and began working for competitor Alpha two days later less than one mile from Cumulus’s office. Cumulus alleges Olson solicited several Cumulus customers and potential customers while at Alpha.
- Cumulus moved for a temporary restraining order seeking: enforcement of the noncompete, nonsolicit, nondisclosure provisions against Olson, and an injunction against Olson and Alpha for trade‑secret misappropriation.
- The parties disputed (1) whether Olson’s post‑employment covenants were supported by adequate consideration given he was at‑will and worked ~21 months, and (2) whether Cumulus’s asserted confidential/trade‑secret materials were sufficiently protected from disclosure.
- After briefing and argument, the court concluded Cumulus likely would succeed on its breach of contract claim (restrictive covenants enforceable and reasonable) but was unlikely to succeed on its Illinois Trade Secrets Act claim (insufficient evidence of reasonable secrecy measures).
- The court granted a TRO in part: enjoined Olson from competing within 60 miles for 6 months, from soliciting Cumulus customers he contacted for 12 months, and from using/disclosing Cumulus confidential information for 12 months (bond required: $25,000). A status conference and expedited discovery were set.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Olson’s post‑employment covenants are supported by adequate consideration | 21 months employment plus provided benefits/training constitute sufficient consideration | At‑will employment is illusory; 21 months is not the two‑year threshold required by Illinois appellate precedent | Court: flexible, fact‑specific test—21 months was sufficient here; covenants supported by adequate consideration |
| Whether covenants are reasonable in scope (time, geography, customer limitation) | 60‑mile market radius and 6‑month noncompete are necessary to protect customer relationships; nonsolicit limited to customers Olson contacted | Defendants did not substantially contest reasonableness at hearing | Court: Plaintiff showed likelihood of success that covenants are reasonable and protect legitimate business interests |
| Whether Cumulus has protectable trade secrets under ITSA | Cumulus claims rates, discounts, client preferences, marketing and financial plans, and personnel info are trade secrets and protected via NDAs and access controls | Defendants argue much info is public/routinely shared; Olson says client files were openly accessible and not kept secret | Court: unlikely to succeed on ITSA—Cumulus failed to show reasonable steps to maintain secrecy |
| Whether equitable relief (TRO) is warranted (irreparable harm, adequacy of legal remedy, balance of harms) | Money damages inadequate; irreparable harm likely from client loss; injunction will preserve contract rights | Injunction will deprive Olson/Alpha of employment and commissions | Court: irreparable harm and inadequate legal remedy proven; balance favors Cumulus for contract‑based relief; issued TRO limited to contract claims (no trade‑secret injunction) |
Key Cases Cited
- Caterpillar Inc. v. Walt Disney Co., 287 F. Supp. 2d 913 (C.D. Ill. 2003) (factors for TRO/ preliminary injunction analysis)
- Ty, Inc. v. Jones Group, 237 F.3d 891 (7th Cir. 2001) (balancing relative harms and public interest in injunction analysis)
- Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6 (7th Cir. 1992) (sliding‑scale approach to preliminary injunction factors)
- Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d 393 (Ill. 2011) (reasonableness of restrictive covenants judged by totality of facts)
- Midwest Television, Inc. v. Oloffson, 699 N.E.2d 230 (Ill. App. 1998) (radio stations have protectable customer relationships)