PCx Corp. v. Ross

568 N.E.2d 311, 209 Ill. App. 3d 530, 154 Ill. Dec. 311, 1991 Ill. App. LEXIS 133
CourtAppellate Court of Illinois
DecidedFebruary 1, 1991
Docket1-89-0709
StatusPublished
Cited by10 cases

This text of 568 N.E.2d 311 (PCx Corp. v. Ross) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PCx Corp. v. Ross, 568 N.E.2d 311, 209 Ill. App. 3d 530, 154 Ill. Dec. 311, 1991 Ill. App. LEXIS 133 (Ill. Ct. App. 1991).

Opinion

JUSTICE GORDON

delivered the opinion of the court:

This is an appeal from a trial court order, upon remand, enjoining defendants Rene Ross (hereinafter Ross), a former employee of plaintiff, PCx Corporation, and Tech Data, Inc. (hereinafter Tech Data), plaintiff’s competitor and Ross’ new employer, from doing any business with six of plaintiff's customers with respect to the “line of products” carried by plaintiff as of July 8, 1987, for a period of 24 months. Plaintiff contends that the trial court erred: (1) in limiting injunctive relief to only six of its customers and (2) in denying an award of punitive damages against Tech Data. On cross-appeal, defendants contend that the trial court erred: (1) in granting injunctive relief for any of the six customers and (2) in determining that the term “line of products” referred to generic items of computer hardware as opposed to the products of a specific manufacturer. We affirm the trial court.

The current dispute involves two provisions of an employment agreement entered into by Ross when she went to work as a sales consultant for plaintiff, a regional distributor of computer hardware products, in October of 1986. Those provisions stated, in pertinent part: “[Paragraph] 6. Restrictive Covenant.

a. Upon the termination of Employee’s services under this Agreement for any reason whatsoever, Employee shall not directly or indirectly *** call on, solicit, or otherwise deal with any account or customer of the Employer with respect to any line of products or services represented by Employer at the time of termination. This restriction shall begin upon termination of Employee’s services and continue for a period of twenty-four (24) months thereafter. ***
* * *
7. Disclosure of Information.
a. Employee recognizes and acknowledges that all knowledge and information which [she] may acquire in the course of [her] relationship hereunder relating to the business, developments, activities, or products of the Employer or the business or financial affairs of any individual or firm doing business with the Employer, such as, but not limited to, customer and supplier lists, cost and selling prices for specific customers, customers’ needs and requirements, confidential data regarding marketing sources and product designs, and other information, ideas, discoveries, creations, developments, improvements, designs and processes so acquired are the valuable property of the Employer and shall be held by the Employee in confidence and trust for the sole benefit of the Employer.
b. The Employee agrees not to disclose, divulge or publish, without the prior written consent of the Employer, either during the term of [her] employment or at any time subsequent thereto, knowledge of any confidential information concerning the Employer’s business, developments, products or activities, or the business affairs of any individual or firm doing business with the Employer that may be acquired by the Employee.” (Emphasis added.)

The dispute arose when Ross resigned from her sales consultant position with plaintiff in July of 1987 to take a sales position with Tech Data, one of plaintiff’s competitors, and immediately began contacting many of plaintiff’s customers for Tech Data.

After informal attempts at resolving the dispute failed, plaintiff filed a three-count complaint for injunctive and other relief against Ross and Tech Data claiming a breach of the noncompetition agreement, breach of fiduciary duties and tortious interference with the contract. In support of the request for an injunction, plaintiff alleged that Ross breached the terms of the above-stated provisions of her employment agreement by disclosing to Tech Data and using confidential and proprietary information acquired during her employment with plaintiff and by calling on and soliciting plaintiff’s customers for the purpose of selling the same line of products and services sold by plaintiff. After an initial hearing on plaintiff’s motion for preliminary injunction, the trial court entered an order dismissing the complaint and denying the motion, finding that “[t]he restriction [contained in the restrictive covenant] is too broad in scope and will not be enforced by the Court.”

Thereafter, plaintiff filed an interlocutory appeal of that order pursuant to Supreme Court Rule 307(a)(1) (107 Ill. 2d R. 307(a)(1)) and the matter was assigned to our division of the appellate court. In PCx Corp. v. Ross (1988), 168 Ill. App. 3d 1047, 522 N.E.2d 1333, we reversed the trial court’s order, finding sufficient evidence to support granting a preliminary injunction against Ross and Tech Data. In so doing, we specifically found that plaintiff “presented sufficient evidence of the factors indicative of a near-permanent relationship with its customers and that but for her employment [by plaintiff] Ross would not have had contact with them [so as] to raise a fair question as to the existence of a legitimate right in need of protection.” (PCx Corp. v. Ross (1988), 168 Ill. App. 3d 1047, 1058, 522 N.E.2d 1333, 1340.) We remanded this matter to the trial court for “further proceedings not inconsistent” with our opinion. 168 Ill. App. 3d at 1059, 522 N.E.2d at 1341.

PROCEEDING ON REMAND

Upon remand, the trial court conducted a second full hearing on plaintiff’s motion for preliminary injunction. Much of the evidence presented was the same as at the initial hearing and as summarized in the initial appeal (PCx Corp. v. Ross, 168 Ill. App. 3d at 1052-55, 522 N.E. 2d at 1336-38) and will not be restated except to the extent that it re- . lates to the issues raised.

The undisputed evidence showed that Ross was hired as a “sales consultant” for plaintiff in October of 1986 and was assigned a sales territory which encompassed areas south and west of the City of Chicago. At the time of her hire, she signed the aforementioned employment contract as a condition of her employment and thereafter was given the portion of plaintiff’s customer list which related to her territory. According to the testimony of Robert Curley, plaintiff’s chairman of the board, the list was confidential and had been compiled at great expense since plaintiff’s inception in 1982 and contained valuable customer information necessary for the survival of the company. Curley stated that the customer information list included such information as the names, addresses, contact persons, credit information, and product needs of the individual customers.

Though it was generally conceded that Ross’ sales consultant position with plaintiff was mostly one that involved her only in telephone communications with customers, there was nevertheless a dispute over the nature of her relationship with those customers. Ross testified that she was essentially an “order taker.” Robert Curley and Steven Rosenthal, plaintiff’s sales manager, however, testified that the relationship was much more than just that. According to Curley, because of plaintiff’s sales strategy to service and build existing accounts, plaintiff’s sales consultants were the “linch pin” of that strategy.

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Cite This Page — Counsel Stack

Bluebook (online)
568 N.E.2d 311, 209 Ill. App. 3d 530, 154 Ill. Dec. 311, 1991 Ill. App. LEXIS 133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pcx-corp-v-ross-illappct-1991.