When a company sues a former employee for breaching confidentiality and solicitation agreements, it needs more than generalized accusations in order to hold up in court. Bridgeview Bank Group employed Thomas M. as a senior vice president and SBA loan officer from 2013 to 2015. Thomas originally signed a noncompete agreement that prohibited him from engaging in SBA lending for six months after termination, but after he was dismissed by the company, the contract was modified as part of a severance agreement. He was allowed to compete with Bridgeview but had to refrain from soliciting Bridgeview clients or employees for one year, and from making “disparaging” comments against the company. He was also required to maintain the confidentiality of Bridgeview’s information.
More than four months after Thomas’s termination, Bridgeview brought claims against him for breach of contract and fiduciary duty, and tortious interference with business relationships. The company claimed that Thomas had contacted its customers, divulged confidential information, and made disparaging remarks about Bridgeview, alleging that he had interfered with “one or more contractual or prospective contractual relationships.” However, as noted by the First District Appellate Court on appeal, Bridgeview identified no specific customer, confidential piece of information, or disparaging comment in its complaint. Bridgeview also sought a temporary restraining order against Thomas, but provided no more in the way of documentation than e-mail messages Thomas supposedly sent to himself on his last day of work, containing an income statement, various internal passwords, and a list of about 3,000 contacts which reportedly included Bridgeview staff and prospective customers.
This “customer list” was the primary focus of Bridgeview’s case. Counsel for Bridgeview variously represented to the trial court that “dozens,” “scores” and “over a hundred” of the 3,000 contacts were Bridgeview customers. Thomas’s counsel argued that Bridgeview had not provided any information as to the nature and length of Bridgeview’s relationship with any of the customers on the list, what resources had been invested to develop and retain them, or what Thomas’s role in those relationships was. While the trial court expressed concern about the customer list and Thomas’s right to retain the information in it, it denied Bridgeview’s requested restraining order on the grounds that the company had substituted “inference, innuendo, and guesswork” for evidence.
On interlocutory appeal, the First District in Bridgeview Bank Group v. Meyer, 2016 IL App (1st) 160042 noted that there were “virtually no well-pled facts” in Bridgeview’s complaint regarding information Thomas took with him or customers he solicited after he left. “Rather, the complaint is replete with nonspecific and conclusory allegations,” the court wrote. The court also noted that as defined in the agreements Thomas signed, “confidential information encompassed virtually the entirety of Bridgeview’s business operations.”
The court concluded that Bridgeview had alleged not a single fact to support that Thomas breached his employment or severance agreements, and produced no affidavits from bank officers or others to “flesh out” its allegations, but merely a copy of the customer list with certain names highlighted. “Bridgeview should have been able to identify specific customers it had lost and with which [Thomas] interacted during his tenure, if there were any,” the court wrote. “Failure to identify … even one customer or describe with any specificity the confidential information used or disclosed is inexplicable and, hence, insufficient.” The court scoffed at the idea that the information on the customer list, although technically confidential, was of any particular value to Thomas or his current employer, or that Bridgeview had a protectable interest in its SBA customer base such that irreparable harm would ensue to the company. Based on this lack of specificity, the court concluded that Bridgeview had failed to establish a likelihood of success on the merits.
Our Chicago non-compete agreement, employment law and business dispute attorneys have defended high level executives in covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago business. You can view that article by clicking here.
Lubin Austermuehle a firm of Chicago business dispute lawyers handles litigation over non-compete clauses for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Our Chicago business lawyers with offices near Tinley Park, Downers Grove, Oak Brook and Chicago have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results.
Lubin Austermuehle a Chicago business litigation law firm represents both plaintiffs and defendants in such cases, and can also help stop litigation before it starts by reviewing contracts to look for covenants and clauses that could create problems later. Our firm has also handled many shareholder and LLC disputes between owners of closely held corporations, and LLCs.
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