Loparex, LLC v. MPI Release Technologies, LLC
964 N.E.2d 806
| Ind. | 2012

Background

  • Loparex sued Kerber and Odders in SD Indiana for alleged blacklisting related to post-employment conduct and trade secrets.
  • Odders and Kerber left Loparex and joined MPI within one year under noncompete terms; Loparex alleges breach and misappropriation of trade secrets.
  • Loparex filed Illinois and then federal court actions seeking injunctive relief and damages; counterclaims for blacklisting were certified to Indiana Supreme Court.
  • Indiana’s Blacklisting Statute, Ind.Code § 22-5-3-2, creates damages for blacklisting or attempting to prevent reemployment; the statute's scope and damages are at issue.
  • This decision addresses: (1) validity of Young’s holding post-19th century constitutional changes, (2) whether attorney fees are compensatory damages under the statute, (3) whether a trade-secrets suit can support blacklisting claims.
  • The Court concludes: Young is no longer controlling, attorney fees are not compensatory damages under the statute, and a suit to protect trade secrets does not constitute blacklisting.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Is Young still good law regarding voluntary quitters under the Blacklisting Statute? Loparex relies on Young to bar claims by voluntary quitters. Counter-plaintiffs argue Young should be retained or not necessary. No; Young is not controlling; voluntary quitters may sue under the statute.
Are attorney fees recoverable as compensatory damages under the Blacklisting Statute? Loparex contends fees can be recovered as damages. Defendants contend attorney fees are not compensatory damages under the statute. No; attorney fees are not compensatory damages under the Blacklisting Statute.
Does a suit to protect trade secrets support a blacklisting claim? Loparex argues such suits fall within blacklisting. Defendants contend such suits can be blacklisting under broad statutory language. No; such a suit does not constitute blacklisting under the statute.

Key Cases Cited

  • Wabash Railroad Co. v. Young, 162 Ind. 102, 69 N.E. 1003 (Ind. 1904) (original single-subject constitution doctrine for non-discharged employees later narrowed)
  • Meier, 244 Ind. 12, 190 N.E.2d 191 (Ind. 1963) (Section 19 liberal interpretation; single-subject doctrine applied flexibly)
  • Dortch v. Lugar, 255 Ind. 545, 266 N.E.2d 25 (Ind. 1971) (liberal interpretation of one-subject requirement)
  • Stith Petroleum Co. v. Dep't of Audit & Control, 211 Ind. 400, 5 N.E.2d 517 (Ind. 1937) (liberal single-subject analysis; unity of subject matter)
  • Dague v. Piper Aircraft Corp., 275 Ind. 520, 418 N.E.2d 214 (Ind. 1981) (adopts rule-of-reason approach to Section 19)
  • Burk v. Heritage Food Service Equipment, Inc., 737 N.E.2d 803 (Ind. Ct. App. 2000) (applies Blacklisting Statute to noncompetition context; uncertainty about voluntary leave)
  • Baker v. Tremco Inc., 890 N.E.2d 73 (Ind. Ct. App. 2008) (Blacklisting analysis in noncompetition context; later limited by this Court)
  • McCabe v. Commissioner, Indiana Department of Insurance, 949 N.E.2d 816 (Ind. 2011) (ambiguous damages issue resolved by codified wrongful-death statutes; supports discussion on damages)
  • Indiana Patient's Compensation Fund v. Brown, 949 N.E.2d 822 (Ind. 2011) (fees under wrongful-death statutes discussed; clarifies fee recovery context)
  • Goins v. Sargent, 196 N.C. 478, 146 S.E. 131 (N.C. 1929) (definition/scope guidance for blacklisting concepts across jurisdictions)
  • Tomanovich v. City of Indianapolis, 457 F.3d 656 (7th Cir. 2006) (federal caselaw applying Indiana law on blacklisting scope)
  • Kentner v. Timothy R. Downey Ins., Inc., 430 F.Supp.2d 839 (S.D. Ind. 2006) (lack of evidence of anti-rehire impact; business justification defense)
Read the full case