First Financial Bank, N.A. v. Bauknecht
71 F. Supp. 3d 819
C.D. Ill.2014Background
- First Financial sued former employee Scott Bauknecht and his new employer State Bank of Graymont after Bauknecht left First Financial and solicited customers; claims include breach of a 2002 confidentiality agreement, breach of fiduciary duty, trade-secret misappropriation (ITSA), conversion, CFAA violation, tortious interference, and civil conspiracy.
- Bauknecht sent a Graymont-letter to 73 recipients (many were First Financial customers), moved loans to Graymont, retained an employer-issued iPad containing loan lists, and disclosed at least one customer’s deposit information.
- First Financial asserts it maintained reasonable confidentiality protections (access codes, a confidentiality agreement signed by Bauknecht); Defendants contend the information was readily discoverable or disclosed by customers.
- Procedurally: cross-motions for summary judgment; Magistrate’s earlier R&R narrowed conversion claim to non–trade-secret property; a discovery dispute over 30(b)(6) testimony was resolved in part for factual computer-forensic questions.
- Court’s high-level holdings: liability for breach of the confidentiality agreement and for ITSA misappropriation against Bauknecht (liability only; damages for both remain for trial), CFAA claim dismissed, several tort and conspiracy claims against Graymont dismissed, limited conversion and other claims granted/denied as to specific items.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of confidentiality agreement | Bauknecht disclosed customer identities/financial info and thus breached the 2002 agreement | Agreement is unenforceable/expired or not assignable to First Financial | Court: First Financial (as successor by merger) can enforce the agreement; summary judgment for liability against Bauknecht, damages reserved for jury |
| Breach of fiduciary duty | Bauknecht accessed and copied employer data to compete before resigning | Actions had non‑culpable explanations; no pre‑termination misdeeds | Court: disputed facts preclude summary judgment for either side; claim proceeds to trial |
| ITSA (trade secrets) — existence & misappropriation | Customer lists and loan information are secret, valuable, reasonably protected; Bauknecht memorized/used them | Lists are publicly reproducible; Graymont lacked actual/constructive knowledge | Court: customer/loan lists qualify as trade secrets; summary judgment for Bauknecht’s liability on misappropriation; Graymont’s liability and damages are for the jury |
| CFAA violation | Unauthorized access and copying of files caused First Financial loss/damage | Copying alone is not statutory "damage" or qualifying "loss" under CFAA | Court: no statutory "damage" (no impairment/corruption) and no cognizable "loss" tied to service interruption; CFAA claims dismissed against Bauknecht |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine-issue standard on summary judgment)
- S.L.C. v. Citrin, 440 F.3d 418 (7th Cir. 2006) (employee authorization to access employer computers can end upon breach of duty of loyalty)
- Hecny Transp., Inc. v. Chu, 430 F.3d 402 (7th Cir. 2005) (ITSA preemption and distinction of claims independent of trade-secret theory)
- Keller v. United States, 58 F.3d 1194 (7th Cir. 1995) (judicial vs. evidentiary admissions)