Tenan v. Strategiq Commerce, LLC

364 F. Supp. 3d 910
CourtDistrict Court, E.D. Illinois
DecidedMarch 5, 2019
DocketNo. 15 C 5170
StatusPublished
Cited by1 cases

This text of 364 F. Supp. 3d 910 (Tenan v. Strategiq Commerce, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tenan v. Strategiq Commerce, LLC, 364 F. Supp. 3d 910 (illinoised 2019).

Opinion

SARA L. ELLIS, United States District Judge

After Defendant StrategIQ Commerce, LLC ("SIQ") terminated Plaintiff Lori *912Tenan's contract, Tenan filed this lawsuit seeking to recover commissions she claims remain due under that contract. Tenan brings two claims against SIQ: (1) breach of contract for failing to pay commissions due, and (2) violation of the Illinois Sales Representative Act (the "ISRA"), 820 Ill. Comp. Stat. 120/0.01 et seq.1 SIQ filed counterclaims for Tenan's alleged breach of the same contract for unauthorized use of SIQ's confidential information, failure to return confidential information, and violation of the non-solicitation provision, in addition to claims for breach of fiduciary duty, tortious interference with prospective economic advantage, and unjust enrichment. The Court has before it SIQ's motion for summary judgment on Tenan's complaint, which the Court grants. Because the record establishes that Tenan acted as a sales or service agent for other entities without obtaining SIQ's consent, which violated her contract and provided SIQ with cause to terminate the contract, Tenan cannot recover any additional commissions under the contract. And because SIQ does not sell products as required for the ISRA to apply to Tenan, she cannot recover on her ISRA claim.

BACKGROUND2

I. Tenan's Relationship with SIQ

SIQ provides shipping and delivery solutions to retailers. It analyzes shipping, carrier, order, tracking, return, and other data for these clients, allowing them to monitor and improve their shipping and transit processes. SIQ also provides clients with shipping audit and contract negotiation services. Tenan began working for SIQ in 2008 as a sales representative. Her 2008 employment agreement provided Tenan with a $ 75,000 per year salary in addition to graduated commissions capped at 17% on all revenue generated over $ 1,000,000. In 2012, Tenan's sales accounted for approximately one-third of SIQ's annual revenue generated from sales representatives. SIQ's CEO, Jonathan Shaver, advised Tenan that SIQ could not pay her as contractually obligated and so, with the aid of counsel, SIQ restructured her contract to reduce the commission rate. After Tenan threatened to sue SIQ for breach of contract, SIQ agreed to pay Tenan $ 200,000 and give her the option of working for SIQ as an independent contractor. On November 2, 2012, Tenan and SIQ entered into an Amended Employment Agreement ("AEA"), which incorporated an Independent Contractor Sales Agent Agreement ("SAA"). In May 2013, Tenan notified SIQ of her decision to become an independent contractor pursuant to the AEA. SIQ continued to compensate Tenan as an employee, however. Shaver did not advise Rich Kropski, SIQ's chief operating officer, of this change in Tenan's employment status, and Kropski did not believe that Tenan's job responsibilities changed under the SAA.

The SAA stated that, as an independent contractor for SIQ, Tenan would provide certain services to SIQ on a part-time basis. Specifically, she had responsibility for servicing "Client List Customers," which included American Apparel, Beachmint, Forever *91321, Gilt Groupe, Macy's, Nestle Corporation, and Zumiez. SIQ agreed to pay Tenan commissions on the current services it provided to Client List Customers, "Existing Services" sold to new or existing SIQ customers, and "New Services" Tenan sold to existing or prospective SIQ customers. The SAA defined "Existing Services" as:

• Shipping Expense Management services including
• Parcel Audit
• Freight Audit
• Freight Allocation Services
• Parcel Contract Enhancement Services (support of client renegotiation of parcel contracts)
• Shipping Analytic Services
• Outbound Order IQ
• Integration of Order Data to Shipping Data
• Matching Order data to Shipping Data
• Allocation of freight data within an order
• Inbound Order IQ
• Integration of P.O. Data
• Inbound import freight audit
• Verification of Trade Compliance

Ex. 3, SAA § 4(c). It also listed the current services provided to Client List Customers, using the same terminology as in the definition of Existing Services. "New Services" meant "new services not yet created by [SIQ] as of the Effective Date" of the SAA. SAA § 4(d). The SAA provided SIQ with a right of first refusal for the sale of any services or solutions similar to SIQ's Existing Services that Tenan sought to sell. Tenan also agreed that, during the term of the SAA, she would not provide services to another person or entity that offered New or Existing Services without first notifying SIQ in writing and obtaining its consent.

The SAA included confidentiality and non-solicitation provisions. Specifically, with respect to confidential information, the SAA stated:

Tenan acknowledges that [SIQ's] "Confidential Information" (as defined below) constitutes a protectable interest of [SIQ], and covenants and agrees that at all times during the period that Tenan is providing Services to [SIQ], and at all times after Tenan ceases providing such Services, Tenan will not, directly or indirectly, disclose, furnish, make available or utilize any Confidential Information other than in the course of performing the Services.... Tenan's obligations under this section with respect to particular Confidential Information will survive expiration or termination of this [SAA], and will terminate only at such time (if any) as the Confidential Information in question becomes generally known to the public other than through a breach of Tenan's obligations under this [SAA].

SAA § 5(a). The SAA defined "Confidential Information" as:

any and all confidential, proprietary or trade secret information, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, applicable to or in any way related to: (i) the present or future business of [SIQ] or any of its Affiliates ...; (ii) the research and development of the Company or any of its Affiliates; or (iii) the business of any client or vendor of [SIQ] or any of its Affiliates.

SAA § 5(b). It gave examples of Confidential Information, including, "plans or strategies for marketing, development and pricing, business plans, financial statements, profit margins and all confidential information concerning existing or potential clients, suppliers or vendors." Id. Tenan agreed to surrender all Confidential Information, *914and all "property, client lists, notes, manuals, reports, documents and other things" in her possession that related to Confidential Information upon the termination of the SAA. SAA § 5(c). The confidentiality provisions of the AEA, which mirror those in the SAA, also remained in effect.

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Bluebook (online)
364 F. Supp. 3d 910, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tenan-v-strategiq-commerce-llc-illinoised-2019.