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08/26/88 Service Systems v. James A. Van Bortel Et Al.

August 26, 1988





528 N.E.2d 378, 174 Ill. App. 3d 412, 123 Ill. Dec. 833 1988.IL.1319

Appeal from the Circuit Court of Cook County; the Hon. Anthony J. Scotillo, Judge, presiding.


JUSTICE PINCHAM delivered the opinion of the court. LORENZ, P.J., and SULLIVAN, J., concur.


Plaintiff, Service Systems, is engaged in providing food management and maintenance services to public and private primary and secondary schools, health care institutions, colleges, government institutions, business and industrial clients. Defendants James A. Van Bortel and Paul J. Pinsky were plaintiff's former officers and employees. Plaintiff and defendants had entered into covenant-not-to-compete employment agreements, in which defendants agreed that they would not compete with Service Systems after termination of their employment. Defendants Van Bortel and Pinsky terminated their employment with Service Systems and formed defendant Arbor Management, Inc. (Arbor), and began competing with Service Systems for Service Systems' customers. Service Systems filed a complaint against the defendants, James A. Van Bortel, Paul J. Pinsky and Arbor Management, Inc., which sought enforcement of their covenant-not-to-compete employment agreements with Service Systems. Plaintiff moved for a preliminary injunction against the defendants to compel defendants to comply with their employment agreements not to compete with Service Systems and Service Systems' relationship with its public school customers. The trial court denied plaintiff's motion for a preliminary injunction and granted defendants' motion to dismiss plaintiff's complaint. Plaintiff appeals.

Defendant James A. Van Bortel was president and chief operating officer for Service Systems' Midwest region. One of Van Bortel's responsibilities was to entertain Service Systems' customers and develop customer retention relationships with them. It was also Van Bortel's duty to review and approve Service Systems' final bids before they were submitted to Service Systems' customers. In February 1985, Service Systems was acquired by the Marriott Corporation.

Defendant Paul J. Pinsky was vice-president of sales for Service Systems. Pinsky was in charge of all sales to public and private schools, colleges and health care institutions in the Midwest region. Pinsky was also responsible for sales of maintenance and janitorial accounts. Client entertainment and developing and maintaining good customer relationships were also Pinsky's principal responsibilities. Pinsky reviewed customers' operating statements and assisted in the preparation of customers' feasibility studies and bid proposals. He also assisted in developing and reviewing Service Systems' marketing studies, those internally prepared as well as those produced by outside consultants. Additionally, Pinsky reviewed and approved profitability worksheets prepared in connection with Service Systems' bids on its school accounts.

In February of 1985, while employed with Service Systems, Pinsky and Service Systems entered into an employment agreement which in essence provided that should Pinsky terminate his employment with Service Systems, Pinsky would not thereafter engage in competition with Service Systems.

On September 17, 1985, Van Bortel's employment with Service Systems was terminated, and on the same day, Van Bortel executed a termination agreement, pursuant to which Van Bortel was paid $105,656.32. Van Bortel's termination agreement further provided that Van Bortel would not compete with Service Systems or interfere in Service Systems' relationship with Service Systems' customers.

In December 1985, defendant Pinsky contacted defendant Van Bortel and they discussed organizing and operating a joint business venture between them, which would compete with Service Systems. They agreed, and on January 22, 1986, Pinsky and Van Bortel formed defendant Arbor Management, Inc., for them to engage in their competitive business enterprise against Service Systems.

Pamela Ditmarsen was also employed by Service Systems as an account executive and worked directly under the supervision of defendant Pinsky. Ditmarsen's responsibilities included preparing Service Systems' bid proposals for school accounts, participating in the preparation of proposed bid specifications for school customers and attending bid conferences and surveys.

Around October and November of 1985, defendant Pinsky directed Ditmarsen to prepare preliminary bid specifications for Service Systems' existing school accounts. Pursuant thereto, Ditmarsen filled out a form which requested information needed to prepare the bid specifications and sent this form to the district managers for completion.

Around January 26, 1986, Pinsky offered Ditmarsen a position with Arbor which Ditmarsen accepted. On January 30, 1986, Pinsky told Ditmarsen that he would resign from Service Systems on February 11, 1986. Ditmarsen too was to resign from Service Systems on February 11, 1986, to work for Arbor Management. Also in January of 1986, Pinsky had Patricia Ann Thompson, his secretary at Service Systems, place 200 to 300 prospective customers' names and addresses on Service Systems' word processor. Pinsky then directed Thompson to deliver a copy of the original computer disk to him. From this disk ...

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