Garon Foods v. Montieth

The recent Garon Foods v. Montieth case shows how a preliminary injunction can be useful in protecting trade secrets. In this case, the plaintiff is a company whose primary source of business is the distribution of peppers from suppliers to cheese manufacturers for the creation of Pepper Jack cheese. The defendant had worked for the plaintiff for roughly two years before resigning in February 2013, and going to work as an independent contractor attempting to connect the supplier of the peppers directly with the cheese-makers, and therefore bypassing the plaintiff.

In March 2013, the plaintiff filed suit against the defendant, alleging that the defendant had breached her contract with the plaintiff, which had included a non-disclosure clause, as well as violation of the Illinois Trade Secrets Act (ITSA).  It also filed for a preliminary injunction to prevent the defendant from continuing to solicit cheese-makers while the litigation was ongoing.

The meat of the court’s ruling was primarily in dealing with the first element of the four-part test for the granting of a preliminary injunction, that is, whether or not there is a likelihood of success on the merits of the case. The court found that there was a likelihood of success on the merits of claims dealing with how the defendant used the information she had to solicit the plaintiff’s customers. What is interesting about this case is exactly what the court found to be a breach of the non-disclosure agreement.  The court rejected a number of the plaintiff’s arguments, finding it unlikely that the plaintiff would be able to show that the plaintiff had materially breached the contract by emailing confidential information to herself, taking paper documents from the plaintiff’s offices, or even that the defendant had been soliciting customers based on a proprietary list developed by the plaintiff. The court did find, however, the claims regarding the defendant leaking the identity of her new employer as the supplier of peppers to the plaintiff, and the defendant using her memory to recall the past purchases of cheese-makers did constitute likely breaches of the contract, as well as violations under ITSA.

Because of the particular nature of the business of the plaintiff, the court next ruled that without an injunction, there was a possibility of a irreparable harm to the company, as she can draw on the confidential information contained in her memory in order to tempt customers away from the plaintiff, which may, if defendant solicits enough customers, do enough harm to the plaintiff that money damages will not be able to compensate them entirely for their losses.

By entering this injunction, though, the court also recognized that the defendant would suffer significant harm, as the defendant’s ability to earn a living in her chosen career would be severely compromised if she were totally barred from soliciting cheese-makers on behalf of the supplier. To that end, the court decided to limit the score of the injunction, generally only enjoining the defendant from soliciting those cheese-makers she had personally serviced while working for the plaintiff, as well as identifying the supplier as the party responsible for supplying pepper to the plaintiff to potential customers, or any other sensitive information she might have learned while working for plaintiff.

One interesting note is that the amount of bond is not mentioned. While Illinois courts do not require a bond for the issuing of a preliminary injunction, in a case such as this one, where the court openly acknowledged that the injunction would limit the ability of the defendant to make a living, a bond could, and perhaps should, have been issued to reimburse the defendant if the plaintiff’s claims proved fruitless.

 

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