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Shorr Paper Products, Inc. v. Frary

OPINION FILED AUGUST 13, 1979.

SHORR PAPER PRODUCTS, INC., PLAINTIFF-APPELLANT,

v.

DAVID FRARY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Kane County; the Hon. JOHN PAGE, Judge, presiding.

MR. JUSTICE WOODWARD DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order denying a preliminary injunction against defendant, David Frary, which sought to enjoin him from directly or indirectly competing with plaintiff, Shorr Paper Products, Inc., for one year, within a 100-mile radius of plaintiff's business in Aurora, Illinois.

Plaintiff, an Illinois corporation, is an industrial wholesale packaging company, selling converted paper products, namely, cartons, twine, tapes, odd lots, newsprint, bags, and the like. It has been engaged in this type of business for nearly 60 years. It had total sales of $700,000,000 in the last fiscal year with a gross profit of 2.1 million dollars. There is nothing unique about the products plaintiff sells; however, it is the only company in the area that not only converts paper but also sells it; the conversion process itself is no secret. Plaintiff has a customer list which contains approximately 4000 accounts, 90% of which are located within a 100-mile radius of Aurora.

Defendant was first employed by plaintiff in 1970 as a purchasing agent. He became a salesman, sales manager, and then vice president-sales, which position he held when he left plaintiff's employ. As vice president-sales, defendant was in charge of plaintiff's entire sales force. Defendant would review the salesmen's progress, have sales reports summarized, and would deal with manufacturers. He would also assist in training and placing salesmen and reviewing daily invoices. He had his own accounts while vice president-sales, and contacted other customers with his salesmen. Defendant had complete knowledge of plaintiff's operation, the products and the paper business itself. He was aware of the needs of plaintiff's customers and how best to serve them and was personally familiar with plaintiff's major accounts.

On November 16, 1977, defendant entered into a written employment contract with plaintiff. The written contract provided in pertinent part:

"* * * 6(a) Employee agrees * * * the names of customers are and shall remain the exclusive property of employer, are confidential and are of great value to employer. Employee further agrees that all other information used by employee in soliciting customers, including, but not by way of limitation, pricing lists, sales invoices and the names of customers' personnel are trade secrets, are confidential and are valuable property of the employer, and that any such information developed by employee during the course of his employment is and shall remain the property of employer. * * *.

(b) * * * during employee's employment and for the one-year period immediately succeeding the termination of employee's employment, employee, shall not, directly or indirectly, and in the geographic area serviced by employer, perform or offer to perform any services or engage in business similar to or competitive with employer, or to own, in whole or in part, manage, operate, control, join or participate in, or be connected with, * * * any business or undertaking which shall, directly or indirectly perform or offer to perform any services or sales similar to or competitive with the employer.

(c) Employee recognizes and acknowledges that certain services which the employer performs will be confidential, * * * that the good will of the employer depends, among other things, on keeping such services and information confidential; and that unauthorized disclosure of the same would irreparably damage the employer. * * *

(d) Further, employee recognizes and acknowledges that the business matters and affairs of the employer, and the methods of business operation of the employer, are valuable and confidential; * * * that unauthorized disclosure of same would irreparably damage the employer. * * *

(f) Employee acknowledges that employer's remedy at law in the form of monetary damages for any breach by employee of any of the provisions of this section 6 may be inadequate and that, in addition to any remedy at law for such breach, the employer * * * shall be entitled * * * to institute and maintain any appropriate proceeding or proceedings in equity, including suits for specific performance and or injunction. * * *" (Emphasis ours.)

After signing the employment contract, defendant continued to work for plaintiff until November 20, 1978, at which time he left plaintiff's employ. Prior to his leaving, defendant had set up his own company under the name of Frary Packaging, Inc. The business was incorporated and business cards were printed up prior to defendant's leaving plaintiff's employ. Frary Packaging, Inc., was to sell products competitive to plaintiff within a 100-mile radius of Aurora and beyond.

Thereafter, defendant contacted business customers, suppliers and haulers of plaintiff; the customers, some 20 or more, were all within a 100-mile radius of Aurora. On November 27, plaintiff filed its complaint seeking a temporary restraining order, preliminary and permanent injunction, restraining defendant from such conduct for a period of one year from November 20, 1978, in an area of a 100-mile radius from plaintiff's business in Aurora. On November 29 defendant was served with a temporary restraining order, ordering him to desist and refrain from performing or offering to perform any services or engage in business similar to one competitive with plaintiff; defendant, however, thereafter contacted a hauler and some suppliers. A hearing on plaintiff's request for a preliminary injunction and on a petition for rule to show cause to hold defendant in contempt for violating the temporary restraining order was held. On January 26, 1979, the trial court entered an order denying plaintiff's request for the preliminary injunction; defendant, however, was held in contempt and fined $150 for violating the temporary restraining order. The trial court denied plaintiff's motion to vacate the order and to stay the effect of the order. It is from the denial of the preliminary injunction that plaintiff appeals.

• 1 It is well settled that the trial court is vested with a large measure of discretion in the granting or refusing to grant a preliminary injunction; its determination will not be overturned absent a showing of the abuse of that discretion. (Office Electronics, Inc. v. Grafic Forms, Inc. (1978), 56 Ill. App.3d 395, 398, 372 N.E.2d 125, 128.) In McCormick v. Empire Accounts Service, Inc. (1977), 49 Ill. App.3d 415, 364 N.E.2d 420, the court stated:

"For a preliminary injunction to issue, the party seeking the injunction must carry the burden of persuasion on four issues: (i) that he has no adequate remedy at law and will be irreparably injured if the injunction is not granted; (ii) that the threatened injury to him will be immediate, certain and great if the injunction is denied while the loss or inconvenience to the opposing party will be comparatively small and insignificant if it is granted; (iii) that he has a reasonable likelihood of prevailing on the merits of the case; and (iv) that ...


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