LKQ CORP. v. Thrasher
785 F. Supp. 2d 737
N.D. Ill.2011Background
- LKQ employed Thrasher as a Sales Representative in the Northwest and Washington/Oregon regions; he signed a Confidentiality, Non-Competition, and Solicitation Agreement restricting post-employment activity.
- Thrasher resigned on January 27, 2011, but LKQ alleges he began working for a competitor (B & R Auto Wrecking) in December 2010 in the same role, violating the agreement.
- Thrasher allegedly solicited LKQ customers via email on resignation day, steering them toward B & R and away from LKQ; several longtime LKQ customers shifted business to B & R thereafter.
- Thrasher returned a wiped hard drive to LKQ and allegedly failed to return other data collected during employment.
- LKQ filed suit asserting four counts: breach of contract, breach of fiduciary duty, violation of the Computer Fraud and Abuse Act, and requests for injunctive relief.
- Thrasher moved to dismiss under Rule 12(b)(2) and 12(b)(6), arguing lack of personal jurisdiction due to unenforceable forum selection clause, and pleading defects in the breach-of-contract and CFAA claims; the court denied the motion and allowed LKQ to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether forum selection clause supports personal jurisdiction | Forum clause enables Illinois jurisdiction over Thrasher. | Clause unenforceable; no jurisdiction absent it. | Forum clause enforceable; court has personal jurisdiction. |
| Whether the Non-Competition Agreement has valid consideration | Thrasher received substantial consideration via year-long employment/post-employment promises. | Consideration is inadequate due to the employee's voluntary resignation and lack of extended employment; no substantial period. | Substantial period of consideration found; agreement enforceable. |
| Whether LKQ adequately pleads breach of contract | Amendment provides sufficient factual detail on consideration and breach. | Initial pleading lacks consideration details; amendment futile. | LKQ may amend; Rule 12(b)(6) challenges rejected. |
| Whether the CFAA claim is adequately pleaded | Thrasher accessed LKQ computers without authorization via fiduciary breach. | No explicit restricted access or notice required to plead CFAA. | CFAA claim survives Rule 12(b)(6) challenge. |
Key Cases Cited
- Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811 (7th Cir. 2009) (pleading standards under Rule 12(b)(6))
- Tamayo v. Blagojevich, 526 F.3d 1074 (7th Cir. 2008) (plausibility standard for complaints)
- Swanson v. Citibank, N.A., 614 F.3d 400 (7th Cir. 2010) (plausibility and notice standards under Rule 12(b)(6))
- Hyatt Int'l Corp. v. Coco, 302 F.3d 707 (7th Cir. 2002) (forum-selection clause can confer jurisdiction)
- Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1292 (7th Cir. 1989) (forum-selection clauses and due process)
- TruServ Corp. v. Flegles, Inc., 419 F.3d 584 (7th Cir. 2005) (consent via forum-selection clause)
- Woodfield Grp., Inc. v. DeLisle, 295 Ill.App.3d 935 (Ill. App. Ct. 1998) (consideration beyond time-period; factors may matter)
- McRand, Inc. v. van Beelen, 93 Ill.2d 471, 486 N.E.2d 1306 (Ill. 1985) (beyond bright-line tests; consideration via raises, responsibilities)
- Brown & Brown, Inc. v. Mudron, 379 Ill. App.3d 724 (Ill. App. 2008) (two years generally adequate for substantial employment)
- Applied Micro, Inc. v. SJI Fulfillment, Inc., 941 F. Supp. 750 (N.D. Ill. 1996) (consideration and covenants post-employment)
- International Airport Ctr., L.L.C. v. Citrin, 440 F.3d 418 (7th Cir. 2006) (agency authority and access to company resources termination)