Allied Waste Services of North America, LLC v. Tibble

177 F. Supp. 3d 1103, 2016 U.S. Dist. LEXIS 47447, 2016 WL 1441449
CourtDistrict Court, N.D. Illinois
DecidedApril 7, 2016
DocketCase No. 16 C 1660
StatusPublished
Cited by22 cases

This text of 177 F. Supp. 3d 1103 (Allied Waste Services of North America, LLC v. Tibble) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allied Waste Services of North America, LLC v. Tibble, 177 F. Supp. 3d 1103, 2016 U.S. Dist. LEXIS 47447, 2016 WL 1441449 (N.D. Ill. 2016).

Opinion

MEMORANDUM OPINION AND ORDER

Harry D. Leinenweber, Judge, United States District Court

Before the Court is Defendant Brian Tibbie’s Motion to Dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b) (6) [ECF. No. 16]. For the reasons stated herein, the Motion is denied.

I. BACKGROUND

Plaintiff, Allied Waste Services of North America (“Allied”), is a non-hazardous recycling and waste management company. Compl. ¶ 7. On February 15, 2010, Allied hired Defendant, Brian Tibbie (“Tibbie”), as a Major Account Executive for the Chicago metro area. Compl. ¶ 19. Prior to his hire, Tibbie had no experience in this industry. Id. As a Major Account Executive, Tibbie was responsible for business retention and business growth for his assigned customer portfolio. Compl. ¶ 20.

After three years in this position, Tibbie was promoted to Regional National Account Executive and became responsible for growing and retaining the business of Allied’s customers in his region, which included the Midwest from Minnesota to Missouri. Compl. ¶¶ 21, 22. Tibbie was the face of the company for these customers and was involved in all aspects of the business, including setting up accounts and building financial models for pricing. In this role, Tibbie had access to confidential information, and as such, as a condition of the promotion, Tibbie signed a Confidentiality, Non-Solicitation and Non-competition Agreement. Compl. ¶¶ 22, 21.

On July 28, 2014, Allied again promoted Tibbie, this time to the position of Sales Manager. Compl. ¶ 23. In this position, he was responsible for boarding new business and maintaining existing business in his territory, which encompassed the western [1106]*1106suburbs of Chicago. Compl. ¶24. He also managed all aspects of Allied’s revenue for his team, including managing all of their contracts. Id. This meant that Tibbie approved every contract and, in doing so, received information about all of the customers serviced by the sales representatives on his team, such as the names of decision-makers, contract history, pricing information, particular service issues, scheduled rate increases, contract expiration dates, and open pricing terms. Compl. ¶ 25. He was also involved in Allied’s 2016 budget process, which gave him access to Allied’s highly confidential financial information including every customer’s contract expiration date by month for the next three years with their exact pricing plan. Compl. ¶ 26.

With the promotion, Allied changed Tib-bie’s compensation so his wages no longer included commission. Compl. ¶ 23. Instead, Tibbie received a $33,575 increase in his base salary. Id. Allied also increased his bonus potential by 25%. Id. But in order to receive the promotion and raise, on July 28, 2014 — the date of his promotion — Tib-bie signed an updated Non-competition, Non-Solicitation and Confidentiality Agreement (the “Agreement”). Compl, ¶30. Pursuant to the Agreement, Tibbie agreed not to render a range of services on behalf of any of Allied’s competitors within Tibbie’s area of responsibility for a period of twelve (12) months after termination of employment with Allied. Ex. A to Compl., ¶3.2. Tibbie also agreed not to use or disclose Allied’s confidential information for five (5) years following the end of his employment. Id. at ¶ 2.2.

Tibbie voluntarily ended his employment in November 2015, approximately 15 months after he signed the Agreement. Compl. ¶ 34. Shortly thereafter, Tibbie began working for Lakeshore Recycling Services (“Lakeshore”), Compl. ¶35. Lake-shore is a recycling - and waste services provider and is engaged in the same business as Allied. Compl. ¶ 36. Lakeshore and Allied are two of just six major waste management companies competing in the Chieagolarid area. Id. Tibbie is working as a Sales Manager for Lakeshore out of Lakeshore’s Morton Grove office, which is located in the area of responsibility he had when he resigned from Allied. Id. Two weeks prior to Tibbie resigning from his position with Allied, he emailed Allied’s confidential information to his personal email address, including pricing information, container sizes, and service days for one Of Allied’s customers. Compl. ¶ 33.

II. LEGAL STANDARD

A motion to dismiss for failure to state a claim under Rule 2(b)(6) challenges the legal sufficiency of a complaint. Hallinan v. Fraternal Order of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir.2009). When considering a Rule 12(b)(6) motion to dismiss, a court must accept the plaintiffs allegations as true, and view them in the light most favorable to the plaintiff. See, Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). But where a plaintiffs cause of action arises out of a contract that is attached to the complaint as an exhibit, the Court “may independently examine and form its own opinions about the document.” Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540, 542 (7th Cir.2007).

III. ANALYSIS

Tibbie seeks dismissal of Allied’s breach of contract claim for two reasons: (1) the contract was not supported by adequate consideration; and (2) the contract is unenforceable as a matter of law. Additionally, Tibbie argues that Allied has failed to state a claim for misappropriation of trade [1107]*1107secrets. The Court will address each argument in turn.

A. Count I: Breach of Contract

Postemployment restrictive covenants are carefully scrutinized under Illinois law because they operate as partial restrictions on trade. Fifield v. Premier Dealer Services, Inc., 373 Ill.Dec. 379, 993 N.E.2d 938, 942 (Ill.App.Ct.2013). In order for a restrictive covenant to be valid and enforceable, the terms of the covenant must be reasonable in geographic and temporal scope and necessary to protect an employer’s legitimate business interest. Prairie Rheumatology Assocs. v. Francis, 388 Ill.Dec. 150, 24 N.E.3d 58, 62 (Ill.App.Ct.2014). The reasonableness of a restrictive covenant is determined in light of the unique factors and circumstances of the case. Millard Maintenance Serv. Co. v. Bernero, 207 Ill.App.3d 736, 152 Ill.Dec. 692, 566 N.E.2d 379, 384 (1990).

But before even considering whether a restrictive covenant is reasonable, the Court must make two determinations: (1) whether the restrictive covenant is ancillary to a valid contract; and (2) whether the restrictive covenant is supported by adequate consideration. Fifield, 373 Ill.Dec. 379, 993 N.E.2d at 942. Illinois courts consider the adequacy of consideration in this context in recognition of the reality that “a promise of continued employment may be an illusory benefit where the employment is at-will.” Id. Absent adequate consideration, a restrictive covenant— though otherwise reasonable — is- not enforceable. Id.

The parties do not dispute that the Agreement was ancillary to Tibbie’s employment.

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177 F. Supp. 3d 1103, 2016 U.S. Dist. LEXIS 47447, 2016 WL 1441449, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allied-waste-services-of-north-america-llc-v-tibble-ilnd-2016.