Medcor, Inc. v. Kelley

CourtDistrict Court, N.D. Illinois
DecidedSeptember 8, 2025
Docket1:23-cv-02109
StatusUnknown

This text of Medcor, Inc. v. Kelley (Medcor, Inc. v. Kelley) 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
Medcor, Inc. v. Kelley, (N.D. Ill. 2025).

Opinion

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

MEDCOR, INC., and MEDCOR SAFETY, ) LLC, ) ) Plaintiffs, ) No. 1:23-CV-02109 ) v. ) ) Judge Edmond E. Chang PAUL KEVIN KELLEY and MOBILE ) MEDICAL CORPORATION, ) ) Defendants. ) ) PAUL KEVIN KELLEY, ) ) Counter-Plaintiff, ) ) v. ) ) MEDCOR, INC, ) ) Counter-Defendant. ) ) ) ) PAUL KEVIN KELLEY, ) ) Plaintiff, ) No. 1:24-CV-04738 ) v. ) ) MEDCOR, INC, and MEDCOR SAFETY, ) LLC, ) ) Defendants. ) ) ) MEMORANDUM OPINION AND ORDER Before the Court are two connected motions in related cases presenting a civil- procedure puzzle. In a lawsuit filed in 2023, Medcor sued its former employee, Paul

Kelley, for alleged trade-secrets misappropriation. R1. 1, 2023 Original Compl.; R.1 58, 2023 Amended Compl.1 In that case, at the Court’s eventual direction, R1. 107, 08/21/2024 Order, Kelley moved to amend his counterclaims to add an age- discrimination claim against Medcor. R1. 111, Kelley Mot. to Amend. In 2024, Kelley separately sued Medcor for alleged age discrimination. R2. 1, 2024 Compl. In the 2024 case, Medcor moves to dismiss the complaint because Kelley failed to bring the age claim as a compulsory counterclaim in the 2023 case. R2. 10, Medcor Mot. to Dismiss.2

On review of the briefing in both cases, the Court concludes that Kelley’s age-discrim- ination claim should have been filed along with the counterclaims he asserted in

1Citations to the record in Medcor, Inc. v. Kelley, No. 1:23-cv-02109 (N.D. Ill. Apr. 4, 2023) (the 2023 Case) are “R1.” followed by the docket entry number and, if needed, a page or paragraph number. Citations to the record in Kelley v. Medcor, Inc., No. 1:24-cv-04738 (N.D. Ill. June 7, 2024) (the 2024 Case) are “R2.” followed by the docket entry number and, if needed, a page or paragraph number.

2This Court has subject matter jurisdiction over the 2023 Case both under federal- question jurisdiction, 28 U.S.C. § 1331, and under diversity jurisdiction, 28 U.S.C. § 1332(a). For diversity jurisdiction, Medcor is an Illinois corporation with its principal place of business in Illinois. 2023 Amended Compl. ¶ 18. Medcor Safety, LLC, which was previously named Worldwide Safety Professionals LLC, see R1. 76, Mot. to Substitute; R1. 77, is Medcor’s direct subsidiary and is a single-member LLC with its sole member being Medcor. Id. ¶ 19. Medcor Safety is an Ohio limited liability corporation with its principal place of business in Ohio.Id. Kelley is a citizen of West Virginia, and Mobile Medical Corporation (also known as Encore Safety Group) is a Pennsylvania corporation with its principal place of business in Pennsyl- vania. Id. ¶¶ 20–21. Complete diversity therefore exists. The amount in controversy exceeds $75,000. Id. ¶ 21. The Court also has supplemental jurisdiction over the state law claims under 28 U.S.C. § 1367(a). This Court has subject matter jurisdiction over the 2024 case un- der 28 U.S.C. § 1331.

2 2023, not because the claim itself is a compulsory counterclaim, but because separat- ing the ADEA claim from the counterclaims violated the rule against claim splitting. For the reasons explained in this Opinion, Medcor’s motion to dismiss the 2024 age-

discrimination case is granted, and Kelley’s motion to amend the counterclaims in the 2023 case is denied. I. Background A. Facts

For over 16 years, Paul Kelley held several managerial positions as an onsite workplace healthcare provider at Medcor, specifically in its Construction Health & Safety Division. R1. 2023 Amended Compl. ¶¶ 2–3, 27, 45. During his tenure at the company, Kelley allegedly had access to confidential and trade-secret information about Medcor’s customers, suppliers, programs, rates, strategies, and contracts. Id. ¶¶ 4, 46–47. Because he was given access to sensitive information, Medcor required

Kelley to sign a Non-Compete Agreement at the beginning of his employment, in which Kelley agreed to certain confidentiality and trade-secret obligations and to lim- its on future employment. Id. ¶¶ 4, 48–52. Kelley parted ways with Medcor in 2023. R1. 2023 Amended Compl. ¶¶ 5, 53. Though the company alleges that Kelley’s position was eliminated in 2023, id. ¶ 5, Kelley claims that the company fired him, and then hired a less-experienced replace- ment 20 years Kelley’s junior, R2. 2024 Compl. ¶ 25. Kelley also complains that after

his employment was terminated, Medcor wrongfully withheld the executive bonus

3 that he had earned after meeting 2022 performance goals, which Kelley views as part of a pattern of discrimination against older employees. R2. 2024 Compl. ¶¶ 16–19. Kelley quickly found a new position with Encore Safety Group (also known as

Mobile Medical Corporation), a competitor of Medcor’s in the onsite occupational healthcare market. R1. 2023 Amended Compl. ¶ 5. At the time, Encore Safety did not have a construction safety unit, but Kelley allegedly was brought on to help establish that service. Id. ¶¶ 55–58. In March 2023, Medcor learned that Kelley was speaking with one of Medcor’s largest clients and that the company had engaged Encore Safety to take over two positions that Medcor had previously provided for the client. Id. ¶ 56. On the same day, Kelley allegedly reached out to a Medcor employee to offer him a

job with Encore Safety. Id. ¶ 57. Medcor asserts that Kelley’s role with Encore Safety placed him in a position to reveal Medcor’s confidential and trade-secret information, and further alleges that Kelley in fact revealed that information and violated the Non-Compete Agreement. Id. ¶¶ 77–82. B. Procedural Posture One month later, in early April 2023, Medcor sued Kelley for breach of contract

and for Illinois and federal trade-secret misappropriation. R1. 2023 Original Compl. On April 27, 2023, Kelley responded with counterclaims against Medcor, alleging breaches of oral and written contracts, unjust enrichment, and a violation of the Illi- nois Wage Payment and Collections Act, 820 ILCS 115/1. R1. 12, Kelley Counter- claims ¶¶ 27–57. He sought earned income from his bonus, plus interest. Id. at 8. In

4 the counterclaims, Kelley alleged (among other things) that he had been demoted to “replace him with a younger individual with zero experience,” and that Medcor chose to “go younger.” Id. ¶¶ 10–12. Despite leveling that allegation of age discrimination,

Kelley did not explicitly bring an age-discrimination counterclaim. See R1. 12, Kelley Counterclaims. The case proceeded to fact discovery, and the magistrate judge set a fact-discovery deadline of May 24, 2024. R1. 52, 01/09/2024 Order. The magistrate judge later extended fact discovery by two weeks, ending on June 12, 2024. R1. 90, 05/30/2024 Order. On June 7, 2024, Kelley filed a lawsuit against Medcor, alleging that Medcor discriminated against him because of his age, in violation of the Age Discrimination

in Employment Act (commonly cited as the ADEA). 29 U.S.C. § 623. He sought dam- ages in an amount greater or equal to the amount of past and future lost compensa- tion, lost bonus amounts, and lost benefits and for emotional distress. R2. 2024 Compl. Medcor moved to dismiss the 2024 case, arguing that Kelley failed to bring his ADEA claim as a compulsory counterclaim in the 2023 case. R2. 11, Medcor Br. at 3 (citing Fed. R. Civ. P.

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