419 F.Supp.3d 1059
N.D. Ill.2020Background
- PCA acquired Field Packaging in 2011; Croner had signed a 2007 Field employment agreement containing a 12‑month non‑solicitation clause. PCA’s purchase agreement listed Croner’s Field contract among acquired contracts.
- Croner worked for PCA until May 6, 2019, then resigned to join Welch (a competitor), signed a Welch employment agreement, and admitted soliciting some former PCA clients.
- PCA sued (May 2019) asserting three counts: DTSA misappropriation (Count I), breach of the restrictive covenant (Count II), and ITSA misappropriation (Count III). The court issued a TRO with a limited restricted‑customer list.
- Croner moved to dismiss Counts I and III for failure to state a claim; PCA sought a preliminary injunction enforcing the non‑solicit list. Limited expedited discovery and a PI hearing followed.
- The court dismissed Counts I and III with prejudice, holding PCA failed to plausibly allege misappropriation or inevitable disclosure. The court denied preliminary injunctive relief on the breach claim because PCA did not show likely irreparable harm or inadequacy of legal remedies, though PCA showed some likelihood of success on the merits of breach.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint plausibly alleges misappropriation under the DTSA/ITSA | PCA: trade secrets include customer purchase histories, preferences, and internal pricing; Croner solicited clients and deleted files, so he used/disclosed secrets | Croner: he acquired information lawfully in employment; possession, deletions, and solicitations alone do not allege use or disclosure | Dismissed Counts I and III with prejudice: possession/deletion/solicitations insufficient to plausibly allege disclosure or use of trade secrets |
| Whether the inevitable‑disclosure doctrine supports relief | PCA: competition, similar position, and solicitations make disclosure inevitable | Croner: prior job changes and lack of specific facts about intent or need to use secrets rebut inevitability | Inevitable‑disclosure theory fails: PCA did not allege employer safeguards, intent, or that Croner cannot perform without secrets; doctrine applied cautiously |
| Whether the 2007 Field non‑solicit covenant was assigned to PCA and enforceable | PCA: assignment occurred via acquisition and purchase agreement listing the contract; seeks injunction as applied to limited customer list | Croner: no express assignment clause so covenant expired/unenforceable; also overbroad and subject to equitable estoppel due to PCA’s alleged silence | Court: assignment permissible and occurred; covenant enforceable as narrowed to restricted list; equitable estoppel not shown by clear and unequivocal evidence |
| Whether a preliminary injunction should issue enforcing the non‑solicit list | PCA: would suffer irreparable harm (lost customers/profits) and damages are hard to quantify | Croner: monetary damages suffice; PCA can quantify lost sales; no presumption of irreparable harm absent trade secret findings | Denied: PCA showed some likelihood of success on breach but failed to prove likely irreparable harm or inadequacy of legal remedies |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: plausibility requirement).
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard: factual allegations must move claim from conceivable to plausible).
- PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995) (inevitable disclosure doctrine analysis).
- Reliable Fire Equipment Co. v. Arredondo, 965 N.E.2d 393 (Ill. 2011) (factors for protectable business interest in restrictive‑covenant analysis).
- Valencia v. City of Springfield, Illinois, 883 F.3d 959 (7th Cir. 2018) (preliminary injunction two‑phase framework).
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008) (injunction requires likelihood of irreparable harm).
- Whitaker v. Kenosha Unified Sch. Dist. No. 1 Bd. of Educ., 858 F.3d 1034 (7th Cir. 2017) (standard for showing likelihood of success on the merits for preliminary injunction).
- Curtis 1000, Inc. v. Suess, 24 F.3d 941 (7th Cir. 1994) (limits on protectable interests in ordinary‑goods businesses cited by defendant).