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Amer. Family Life Assur. Co. v. Tazelaar

OPINION FILED AUGUST 27, 1985.

AMERICAN FAMILY LIFE ASSURANCE COMPANY, PLAINTIFF-APPELLANT,

v.

EDWIN J. TAZELAAR ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Richard L. Curry, Judge, presiding.

JUSTICE BILANDIC DELIVERED THE OPINION OF THE COURT:

American Family Life Assurance Company (hereinafter plaintiff) sought to enjoin defendants, former sales persons, from soliciting plaintiff's policyholders and from disclosing allegedly confidential information. The circuit court found that one subparagraph of the employment contract's covenant not to compete was overly broad, thereby voiding the entire covenant. The court denied plaintiff's motion for a preliminary injunction. On appeal, we agreed that subparagraphs (5) and (6) were overly broad. We noted, however, that plaintiff did not seek to enforce these subparagraphs, and we remanded the cause for a determination of the validity of subparagraphs (1) through (4). (American Family Life Assurance Co. v. Tazelaar (1984), 127 Ill. App.3d 112, 468 N.E.2d 497.) After a hearing, the circuit court found that subparagraphs (1) through (4) were overly broad and invalid, and it again denied plaintiff's motion for a preliminary injunction. Plaintiff filed this interlocutory appeal pursuant to Supreme Court Rule 307(a)(1). (87 Ill.2d R. 307(a)(1).) The sole issue before us is whether the trial court abused its discretion in refusing to issue the preliminary injunction.

Plaintiff is an insurance company with its home office in Columbus, Georgia. Defendants are former sales persons who sold plaintiff's policies in various areas of Illinois. About January 1983, all of the defendants signed an agreement that contained the following provision:

"PARAGRAPH SEVEN: Covenant not to Compete.

(a) During the term of this agreement and for a period of two (2) years after the termination of this Agreement, the Associate agrees that the Associate shall not, within the geographic area where the Associate has sold and serviced policies for American Family, engage in any of the following:

(1) Attempt to induce other Associates or sales agents of American Family to terminate their agreements with American Family or to become contracted or associated with another insurance company.

(2) Attempt to induce policyholders or accounts of American Family to relinquish their policies.

(3) Divulge the names of American Family policyholders, accounts, or agents to any competitor or potential competitor of American Family.

(4) Make available any information or materials acquired from American Family to any competitor or potential competitor of American Family.

(5) Sell or service an accident or health insurance policy for any other company which competes with any of the policies which the Associate has sold for American.

(6) Become a partner, associate, affiliate, employee, or independent contractor with any person or company which sells or services accident and health insurance policies which compete with policies which the Associate has sold for American Family."

The contract also contained a severability clause and stated that Georgia law governed the agreement.

During 1983, all the defendants left plaintiff's employment and began to work for a competitor. In February 1984, plaintiff sued for injunctive and other relief. Plaintiff alleged that defendants were inducing policyholders to relinquish their policies with plaintiff, soliciting other sales persons to end their employment with plaintiff, and giving their new employer confidential information. Plaintiff asked the court to issue a temporary restraining order and a preliminary injunction.

The trial court entered a TRO. Defendants filed a verified answer, the parties filed memoranda, and oral arguments followed. The trial court, in ruling on the covenant not to compete, found that Georgia law did not allow for "blue-pencilling," in which a court redrafts the covenant; ...


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