Bankers Life & Casualty Co. v. American Senior Benefits LLC

2017 IL App (1st) 160687

• Court: Appellate Court of Illinois
• Decided: August 7, 2017
• Docket: 1-16-0687
• Status: Unpublished

Opinion

2017 IL App (1st) 160687

FIRST DIVISION August 7, 2017

BANKERS LIFE AND CASUALTY COMPANY, ) Appeal from the Circuit Court of ) Cook County, Chancery Division Plaintiff-Appellant, ) ) v. ) ) No. 15 CH 12601 AMERICAN SENIOR BENEFITS LLC, ) GREGORY P. GELINEAU, VAN LaFERMINE, ) ALLAN PARLIER, CHRISTOPHER ) VALENTINE, SCOTT FAJNOR, and ) KEVIN HEISER, ) Honorable Kathleen G. Kennedy, Defendants ) Judge Presiding ) (Gregory P. Gelineau, Defendant-Appellee). )

JUSTICE SIMON delivered the judgment of the court, with opinion. Presiding Justice Connors and Justice Mikva concurred in the judgment and opinion.

OPINION

¶1 Plaintiff Bankers Life and Casualty Company (“Bankers Life”) appeals a circuit court

order granting summary judgment in favor of defendant Gregory P. Gelineau in a breach of a

noncompetition agreement. On appeal, Bankers Life argues that 1) several issues of material fact

precluded a summary judgment disposition and 2) the circuit court abused its discretion when

denying Bankers Life’s request for additional discovery. For the following reasons, we affirm.

¶ 2 BACKGROUND

¶3 Bankers Life is an Illinois company that sells insurance and financial products, such as

long-term care insurance life annuities and Medicare supplement insurance, primarily to seniors. No. 1-16-0687

Bankers Life sells its products through employees and independent contractors and also employs

individuals in management-level positions.

¶4 In 2004, Bankers Life hired Gelineau as the branch sales manager responsible for its

Warwick, Rhode Island office. In 2006, Gelineau signed an employment agreement with

Bankers Life that contained certain noncompetition provisions, stating in relevant part:

“During the term of this Contract and for 24 months thereafter, within the territory

regularly serviced by the Manager’s branch sales office, the Manager shall not,

personally or through the efforts of others, induce or attempt to induce:

(a) any agent, branch sales manager, field vice president, employee, consultant, or

other similar representative of the Company to curtail, resign, or sever a

relationship with the company;

(b) any agent, branch sales manager, field vice president or employee of the

Company to contract with or sell insurance business with any company not

affiliated with the company, or

(c) any policyholder of the company to relinquish, surrender, replace, or lapse any

policy issued by the company.”

¶5 Gelineau’s employment with Bankers Life ended on or about January 15, 2015. Gelineau

was subsequently hired by American Senior Benefits LLC (“ASB”) as its senior vice president.

ASB is an insurance company generally regarded as a competitor of Bankers Life. According to

Bankers Life, ASB hired and retained many former Bankers Life employees.

¶6 On August 21, 2015, Bankers Life filed its complaint alleging breach of contract against

Gelineau and six other defendants: ASB, Van LaFermine, Christopher Valentine, Allan Parlier,

Scott Fajnor, and Kevin Heiser. At issue in this appeal are the allegations against defendant

No. 1-16-0687

Gelineau. In its breach of contract count against Gelineau, Bankers Life alleged that, after

joining ASB, Gelineau recruited or attempted to recruit Bankers Life employees and agents from

the Warwick, Rhode Island office by sending LinkedIn requests to connect to three employees,

Richard Connors, Sally Levesque, and Russell Dolan. According to Bakers Life, its employees

“would then click onto [Gelineau’s] profile [and] would see a job posting for ASB.” Bankers

Life alleged that a second method of recruiting that Gelineau used was to direct his subordinates

at ASB, including Mark Medeiros, to contact Bankers Life agents and employees for the purpose

of inducing them to leave Bankers Life and join ASB.

¶7 Gelineau filed a motion for summary judgment stating that he did not breach any

provisions of his contract: he did not recruit any Bankers Life agents or employees in his

geographic area, and he did not direct Mark Medeiros or any other ASB employee to recruit

Bankers Life employees or agents in that geographic area. He also attested that he never used

LinkedIn to send direct messages to Bankers Life agents or employees in the Warwick, Rhode

Island area regarding ASB or any other possible professional opportunities. Instead, Gelineau

stated, all of the individuals on his e-mail contact list were sent LinkedIn generic e-mails asking

them to form a professional connection on social media.

¶8 Bankers Life filed its opposition to Gelineau’s motion claiming that Gelineau, not

LinkedIn, was responsible for sending the LinkedIn “endorsement emails.” Bankers Life

attached two affidavits to its response. One affidavit came from Peter Wilkins, Bankers Life’s

vice president, where he stated that Bankers Life would need additional discovery from

LinkedIn, from Medeiros, and from Gelineau regarding their alleged recruiting efforts. The other

affidavit came from Richard Connors where he stated that he received LinkedIn invitations from

both Gelineau and Medeiros and that several unnamed Bankers Life employees received similar

requests to connect on LinkedIn from both Gelineau and Medeiros. Connors also indicated that

he saw a job posting for a position with ASB on Gelineau’s LinkedIn profile page.

¶9 During the hearing on the motion for summary judgment, Bankers Life argued that

several text messages exchanged between Gelineau and another ASB employee, Van LaFermine,

indicated that Gelineau used LinkedIn as a recruiting tool. Gelineau texted that he “will

linkin[sic] with agents from their offices and see where it leads” and that “maybe you should link

in [sic] and see if he bites at all.” None of the potential recruits mentioned in the text messages

worked in the Warwick, Rhode Island area.

¶ 10 Following oral arguments, Gelineau submitted a supplemental affidavit from Mark

Medeiros where he stated that Gelineau asked him not to recruit Bankers Life agents or

employees in the Warwick, Rhode Island area. Medeiros indicated that he contacted a small

number of Bankers Life employees and agents, including someone named Christopher Fernandez

in February 2015, before he started working at ASB. Subsequently, Bankers Life submitted an

affidavit from Fernandez claiming that he received an invitation to connect on LinkedIn and that

Medeiros sent Fernandez a recruiting e-mail sometime in the spring of 2015.

¶ 11 The circuit court granted Gelineau’s motion for summary judgment holding that, after

reviewing all the submissions, Bankers Life failed to identify any solicitation or other breach of

contract by Gelineau. The court further ordered that the judgment be made immediately final and

appealable pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). This appeal

follows.

¶ 12 ANALYSIS

¶ 13 We review the grant of summary judgment de novo. Cook v. AAA Life Insurance Co.,

2014 IL App (1st) 123700, ¶ 24. Summary judgment should only be granted if a strict

construction against the movant of all the pleadings, depositions, admissions, and affidavits on

file establishes no genuine issue of material fact and the entitlement of the moving party to

judgment as a matter of law. Board of Education of Township High School District No. 211 v.

TIG Insurance Co., 378 Ill. App. 3d 191, 193 (2007). A genuine issue of material fact exists

where the facts are in dispute or where reasonable minds could draw different inferences from

the undisputed facts. Libolt v. Wiener Circle, Inc., 2016 IL App (1st) 150118 ¶ 24. The purpose

of summary judgment is not to try a question of fact, but to determine whether one exists. Id. If

the plaintiff fails to establish any element of the cause of action, summary judgment for the

defendant is proper. Id. ¶ 25.

¶ 14 On appeal, Bankers Life argues that the circuit court erred when granting summary

judgment in favor of Gelineau. Bankers Life contends that the circuit court erred in concluding

that no genuine issue of material fact existed regarding whether Gelineau induced or attempted to

induce Bankers Life agents and employees to leave Bankers Life, in violation of the

noncompetition provisions contained in his employment agreement. Bankers Life maintains that

Gelineau affirmatively sent the LinkedIn invitation to the three employees, that the invitations

directed its recipients to a job posting, and that it was Gelineau’s modus operandi to first utilize

LinkedIn to make contact as a first step in recruiting Bankers Life employees.

¶ 15 In order to plead a cause of action for breach of contract, a plaintiff must allege (1) the

existence of a valid and enforceable contract, (2) substantial performance by the plaintiff, (3) a

breach by the defendant, and (4) resultant damages. W.W. Vincent & Co. v. First Colony Life

Insurance Co., 351 Ill. App. 3d 752, 759 (2004). The question before us is whether the e-mails

sent through Gelineau’s LinkedIn account to the three individuals working in the Bankers Life’s

Warwick, Rhode Island office and Gelineau’s LinkedIn activity sought to induce or attempted to

induce the Bankers Life employees in the Warwick, Rhode Island area “to curtail, resign, or

sever a relationship with [Bankers Life].”

¶ 16 A few courts considered the question of whether LinkedIn communications or postings

can violate a nonsolicitation or noncompetition requirement. In BTS, USA, Inc. v. Executive

Perspectives, LLC, No. X10CV116010685, 2014 WL 6804545 (Conn. Super. Ct. Oct. 16, 2014)

(unpublished order), the employee, Marshall Bergmann, a webpage designer, updated his

LinkedIn account to reflect his new job after he joined a competitor. Id. at *3. Bergmann also

made a LinkedIn posting encouraging his contacts to “check out” a website he designed for his

new company. Id. BTS sued Bergmann and his new employer claiming that Bergmann’s

LinkedIn posting violated his legal obligations under a nonsolicitation agreement that prohibited

him from soliciting BTS customers for two years after his BTS employment ended.

¶ 17 The court rejected BTS’s claim and held that there was no evidence that any BTS

customer actually viewed or visited Bergmann’s LinkedIn website or did any business with

Bergmann’s new employer as a result of the purported solicitation. Id. at *12. The court also

noted that BTS had no policies or procedures regarding its employees’ use of LinkedIn or other

social media, which prohibited or restricted what Bergmann had done. Id. The court stated that

“to this day” the employer permitted “employees to maintain LinkedIn accounts without

monitoring or restriction from BTS.” Id.

¶ 18 The court’s decision in BTS is similar to that of a few other courts which have

considered the issue. Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies

Corp., 951 N.E.2d 265 (Ind. Ct. App. 2011) (posting of job opportunity on LinkedIn page was

not a solicitation); Invidia, LLC v. DiFonzo, No. MICV20123798H, 2012 WL 5576406 (Mass.

Super. Ct. Oct. 22, 2012) (becoming “friends” with former clients on Facebook did not, in and of

itself, violate the noncompete clause); Pre-Paid Legal Services, Inc. v. Cahill, 924 F. Supp. 2d

1281 (E.D. Okla. 2013) (holding that employee’s postings on Facebook which touted his new

employer’s product and which was viewed by former colleagues did not violate agreement to not

recruit employees from his former employer).

¶ 19 On the other hand, there have been circumstances where courts have found an

employee’s use of LinkedIn violated a noncompete or nonsolicitation agreement. Bankers Life

points to Coface Collections North America Inc. v. Newton, 430 F. App’x 162 (3d Cir. 2011),

where the Third Circuit affirmed the district court’s grant of a preliminary injunction for the

defendant, William Newton, for the breach of his noncompetition and nonsolicitation agreement.

Id. at 169. In Coface, Newton entered into an asset purchase agreement with Coface, a Delaware

corporation engaged in the business of collections and receivables management. Id. at 164. The

agreement contained several restrictive covenants, including a noncompete provision providing

that Newton would not “for a period of five years following the sale: (1) compete with Coface,

solicit, or interfere with Coface’s relationships with Coface’s employees and customers; or (2)

include the name ‘Newton’ in the business title of any entity in competition with Coface.” Id.

About eight months before the noncompete was set to expire, Newton formed and began

operating a company called “Newton, Clark & Associates, LLC.” Id. He also posted on LinkedIn

that he was “Chairman of the Board” at Newton Clark and posted on Facebook that his “non­

compete ends on 12/31/2010 & [he has] decided that the USA needs another excellent, employee

oriented Commercial Collection Agency.” (Internal quotation marks omitted.) Id. The posts

encouraged professionals to contact him to apply for a position with his new company. Id. While

the noncompete and nonsolicitation agreement was still in effect, Newton also sent friend

requests on Facebook to current Coface employees. Id. at 164 n.2.

¶ 20 The Third Circuit found that the covenant not to compete was enforceable and upheld the

preliminary injunction granted in the trial court. The Third Circuit analyzed a choice of law issue

as to whether the agreement would be enforceable, but the issue of whether Newton’s

involvement actions on social media violated the noncompete provision was not decided. See

430 Fed. App’x at 166.

¶ 21 In Amway Global v. Woodward, 744 F. Supp. 2d 657 (E.D. Mich. 2010), the court

considered whether an employee’s use of website postings and a blog violated his nonsolicitation

agreement. The employee argued that his blog postings and other social media communications

could not be considered improper solicitations because they were “passive, untargeted

communications.” Id. at 674. The court disagreed and stated that “it is the substance of the

message conveyed, and not the medium through which it is transmitted, that determines whether

a communication qualifies as a solicitation.” (Emphasis omitted.) Id. The court noted that,

“communications qualifying as solicitations do not lose this character simply by virtue of being

posted on the Internet.” Id.

¶ 22 The different results reached by BTS and Amway Global can be reconciled when looking

at the content and the substance of the communications. See John G. Browning, New

Developments in Social Media, 35 Corp. Couns. Rev. 53, 67 (2016). In BTS, the communication

reflected that the employee changed jobs, it identified the new employer, and it provided an

example of the employee’s work. Id. In contrast, in Amway Global, the former employee went

further, by urging his former co-workers to leave Amway by stating, “If you knew what I knew,

you would do what I do.” (Internal quotation marks omitted.) Amway Global, 744 F. Supp. 2d at

673. The court found that this message “would readily be characterized as solicitation.” Id.

¶ 23 Here, just as in BTS, the undisputed facts established that the invitations to connect via

LinkedIn were sent from Gelineau’s LinkedIn account through generic e-mails that invited

recipients to form a professional connection. See Merrill Lynch, Pierce, Fenner & Smith, Inc. v.

Orbach, No. 13-14360, 2013 U.S. Dist. LEXIS 159984 (E.D. Mich. Nov. 8, 2013) (noting that a

message to remind someone who had not responded to an earlier invitation that the “invitation is

awaiting your response” was a generic e-mail and did not constitute a solicitation). The generic

e-mails did not contain any discussion of Bankers Life, no mention of ASB, no suggestion that

the recipient view a job description on Gelineau’s profile page, and no solicitation to leave their

place of employment and join ASB. Instead, the e-mails contained the request to form a

professional networking connection. Upon receiving the e-mails, the Bankers Life employees

had the option of responding to the LinkedIn requests to connect. If they did connect with

Gelineau, the next steps, whether to click on Gelineau’s profile or to access a job posting on

Gelineau’s LinkedIn page, were all actions for which Gelineau could not be held responsible.

Furthermore, Gelineau’s post of a job opening with ASB on his public LinkedIn portal did not

constitute an inducement or solicitation in violation of his noncompetition agreement. See

Enhanced Network Solutions Group, 951 N.E. 2d. at 268.

¶ 24 It makes no difference that Gelineau acknowledged that he used LinkedIn to evaluate

potential recruits from other geographic areas and that he made a “sheet for recruiting” indicating

the differences between ASB and Bankers Life. To violate his contract, Gelineau would have to

actually, directly recruit individuals working in the Warwick, Rhode Island area. In the text

message exchange between Gelineau and Van LaFermine, Gelineau observed that he was subject

to a two-year nonsolicitation agreement and, therefore, could only recruit individuals outside of

Rhode Island and Massachusetts.

¶ 25 Bankers Life also maintains that the circuit court improperly ignored its additional claim,

that Gelineau instructed Mark Medeiros to recruit Bankers Life agents and employees from the

Warwick, Rhode Island area. In his affidavit attached to his motion for summary judgment,

Gelineau stated that he never instructed Medeiros to solicit Bankers Life agents and employees

from the Warwick, Rhode Island area. Medeiros stated in his own affidavit that Gelineau never

instructed him to do so and that he attempted to call Christopher Fernandez, a Bankers Life agent

in February 2015, before Medeiros began working for ASB.

¶ 26 Bankers Life points to a statement made by Christopher Fernandez where he indicated

that Medeiros contacted him about working with ASB sometime in spring of 2015, and claims

that this statement created a material issue of fact precluding a summary disposition in favor of

Gelineau.

¶ 27 Initially, we note that Medeiros was not bound by a noncompetition agreement with

Bankers Life. Contrary to Bankers Life’s argument, Fernandez’s affidavit does not contradict

Medeiros’ affidavit on a material issue because it does not contain any information relevant to

Gelineau’s actions. Fernandez’s affidavit does not state that Gelineau instructed Medeiros to

contact Fernandez to induce Fernandez to leave Bankers Life for ASB. Since the apparent

contradiction as to the exact date of contact between Medeiros and Fernandez does not relate to a

material issue of fact in this case, the trial court did not err in granting summary judgment in

favor of Gelineau.

¶ 28 Finally, Bankers Life contends that the circuit court’s summary judgment order was

premature because it did not give it the opportunity to conduct additional discovery and to test

the assertions made in the affidavits submitted by Gelineau and Medeiros. Bankers Life argues

that it should have been permitted to depose Gelineau and Medeiros pursuant to Illinois Supreme

Court Rule 191(b) (eff. Jan. 4, 2013).

¶ 29 Trial courts are vested with wide discretion in ruling on discovery matters, and a

reviewing court will not disturb a trial court’s discovery rulings absent an abuse of that

discretion. Janda v. United States Cellular Corp., 2011 IL App (1st) 103552, ¶ 96 (citing

Pemberton v. Tieman, 117 Ill. App. 3d 502, 504-05 (1983)). A trial court abuses its discretion

only when “no reasonable person would take the view adopted by the trial court.” (Internal

quotation marks omitted.) Foley v. Fletcher, 361 Ill. App. 3d 39, 46 (2005).

¶ 30 Illinois Supreme Court Rule 191(b) provides:

“If the affidavit of either party contains a statement that any of the material facts

which ought to appear in the affidavit are known only to persons whose affidavits

affiant is unable to procure by reason of hostility or otherwise, naming the persons

and showing why their affidavits cannot be procured and what affiant believes they

would testify to if sworn, with his reasons for his belief, the court may make any

order that may be just, either granting or refusing the motion, or granting a

continuance to permit affidavits to be obtained, or for submitting interrogatories to or

taking the depositions of any of the persons so named, or for producing documents in

the possession of those persons or furnishing sworn copies thereof.” Ill. S. Ct. R.

191(b) (eff. Jan. 4, 2013).

¶ 31 Pursuant to Rule 191(b), Bankers Life provided the affidavit of Peter Wilkins where he

stated that the depositions of both Gelineau and Medeiros were necessary to test their assertions

made in their affidavits. Wilkins also indicated that he expected that they will also testify about

the extent and content of their communications with Bankers Life employees while employed by

ASB and that Medeiros would testify about the instructions he received from Gelineau regarding

recruiting Bankers Life employees.

¶ 32 But, prior to testing the opposing party’s evidence, a plaintiff must possess a minimum

level of information indicating that defendant is liable to him before commencing the litigation

and forcing defendant to undergo discovery. Yuretich v. Sole, 259 Ill. App. 3d 311, 316 (1994).

Here, it was Bankers Life’s burden to investigate and identify instances where Gelineau

allegedly solicited Bankers Life employees in his former territory to leave and join ASB.

Bankers Life failed to provide any evidence or affidavits from Bankers Life employees stating

that Gelineau directly contacted and solicited them to leave Bankers Life and join ASB. Because

Bankers Life failed to counter Gelineau’s motion for a summary judgment and attached

affidavits with evidence that created a genuine issue of material fact, we find no abuse of

discretion in the circuit court’s ruling denying Bankers Life’s request for additional discovery.

¶ 33 CONCLUSION

¶ 34 Based on the foregoing, we affirm.

¶ 35 Affirmed.