Employee May Not Use Customer List to Compete With Employer
APC Filtration, Inc. v. Becker, No. 07 C 1462, 2008 WL 3008032 (N.D. Ill. Aug. 4, 2008) (Dow, J.)
Judge Dow granted plaintiff partial summary judgment as to plaintiff APC Filtration’s (“APC”) breach of fiduciary duty and trade secret misappropriation claims. The Court held that defendant Becker owed APC a fiduciary duty as its National Sales Manager. An employee may plan, form and outfit a competing business before quitting his job to operate his competing company. But Becker went too far and breached his fiduciary duty to APC by negotiating and finalizing contracts with APC’s customers while still employed by APC. Furthermore, the Court held that APC was harmed by the breach, in the form of lost clients, lost suppliers and replacement costs for the lost suppliers. The Court, therefore, awarded APC approximately $175K in damages, an amount equal to Becker’s compensation, expenses and severance paid by APC during the breach.
The Court also held that Becker misappropriated APC’s trade secrets. APC’s customer lists, potential customer lists, and pricing lists were all trade secrets. And APC sufficiently protected them by password-protecting the information so that only three employees, including Becker, could access it. And Becker misappropriated the information by using it in competition with APC during his employment and after it was terminated.
Finally, the Court held that it would enter a permanent injunction to prevent Becker’s and his Company SourceOne’s use of APC’s suppliers and solicitation of APC’s customers. The Court ordered APC to submit a proposed injunction of “reasonable scope and duration.”
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