Avery Dennison Corp. v. Naimo, No. 06 C 3390, 2006 WL 3343762 (N.D. Ill. Nov. 16, 2006) (Grady, J.).
In this trade secret dispute, Judge Grady dismissed plaintiff’s breach of contract claim alleging defendant’s breach of the parties’ Employment Agreement because the Separation Agreement the parties subsequently signed included an integration clause. When defendant began his employment with plaintiff he signed an Employment Agreement which required that, among other things, defendant not compete with plaintiff for twelve months after his employment ended and that defendant never use plaintiff’s proprietary information for the benefit of anyone besides plaintiff. When defendant later stopped working for plaintiff, the parties signed a Separation Agreement with a similar proprietary information clause and a strong integration clause, but apparently without a similar non-compete clause.
The Separation Agreement’s integration clause read as follows:
This Agreement is the only and complete agreement between [defendant] and [plaintiff] on or in any way relating to the subject matter hereof, and supersedes all previous agreements, including without limitation, the Employment Agreement, except to the extent such Employment Agreement . . . is specifically referenced in Section 2 of this Agreement.
The Separation Agreement also stated that it was a "full and final settlement of all matters relating to or arising out of [defendant’s] employment and separation of employment with [plaintiff]." Based on the language of the Separation Agreement, the Court held that the Separation Agreement replaced the Employment Agreement "without limitation" except for plaintiff’s payment obligations to defendant as set forth in Section 2 of the Employment Agreement.
Practice tip: When preparing separation agreements, make sure to include all of the provisions from the employment agreement that you might need post-employment, otherwise you stand a good chance of losing those provisions left out of the separation agreement.