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Wolf & Co. v. Waldron

OPINION FILED JULY 28, 1977.

WOLF AND COMPANY, PLAINTIFF-APPELLEE,

v.

EDWARD J. WALDRON, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. GEORGE J. SCHALLER, Judge, presiding.

MR. JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order granting a preliminary injunction against Edward J. Waldron, defendant, enjoining him from soliciting, diverting, or taking away 27 of plaintiff's clients and from performing any services for them in the capacity of accountant. We affirm the trial court's order.

At the hearing on plaintiff's motion for the issuance of a preliminary injunction, the following evidence was adduced:

Plaintiff, Wolf and Company, is a partnership of certified public accountants with offices in 20 cities who employed defendant as a staff accountant from May 1970 until September 1976. At the time his employment began, defendant executed an employment agreement which contained the following provision:

"5. In consideration of first party [plaintiff] making this contract and employing second party [defendant] the second party agrees that during the period of two (2) years immediately after the termination of second party's employment with first party:

(a) He will not, either directly or indirectly, make known or divulge the names or addresses of any of the clients of the first party;

(b) He will not, directly or indirectly, either for himself or for any other person, firm or corporation, call upon, solicit, divert, or take away or attempt to solicit, divert or take away any of the clients of first party for whom first party rendered accounting, auditing, tax consulting or business counseling services during the employment of second party;

(c) He will not perform in a professional capacity (as distinguished from private employment) any accounting, auditing, tax consulting or business counseling for any person, firm or corporation to whom, to the knowledge of the second party, such services have been rendered by the first party during the employment of second party;

(d) He will not solicit, endeavor to procure or accept professional employment (as distinguished from private employment) as public accountant, auditor, tax consultant or business counselor from any person, firm or corporation with whom, to the knowledge of the second party, the first party has made arrangements for services to be rendered or with whom the first party has carried on negotiations respecting services, if the second party has participated therein;

(e) He will not perform in a professional capacity (as distinguished from private employment) any accounting, auditing, tax consulting or business counseling for any person, firm or corporation with whom, to the knowledge of the second party, the first party has made arrangements for services to be rendered or with whom first party has carried on negotiations respecting services, if the second party participated therein.

(f) He will not form an association with or employ or offer to employ in professional employment (as distinguished from private employment) as a public accountant anyone who has been a member of the staff or of the organization of the first party within two (2) years prior to the date of the termination of the second party's employment hereunder." (Emphasis supplied.)

During the course of his employment, defendant was promoted to the position of manager. In this capacity, defendant acted as the plaintiff's representative to clients and supervised their auditing programs. *fn1 Upon the termination of his employment, defendant took the files of 27 of plaintiff's clients. None of these clients are publicly held, nor did defendant "bring" any of the clients to plaintiff.

Subsequently, defendant obtained commitments to conduct audit programs for several of these clients. After dismissing plaintiff from rendering further services, fees of $14,000 and $18,000 were paid to defendant by two of plaintiff's clients, Quinlan and Tyson, Inc., and Reserve Supply Corporation.

Although information about clients and the audit programs established by plaintiff are considered to be confidential information, clients' records are returned upon request. A new auditor could require up to ...


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