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NTRON INTL. SALES CO. v. CARROLL

April 3, 1989

NTRON INTERNATIONAL SALES COMPANY, INC., a California corporation, Plaintiff,
v.
FREDERICK S. CARROLL, et al., Defendants


Stanley J. Roszkowski, United States District Judge.


The opinion of the court was delivered by: ROSZKOWSKI

STANLEY J. ROSZKOWSKI, UNITED STATES JUDGE

 BACKGROUND *fn1"

 The plaintiff, Ntron International Sales Company (Ntron), is a California corporation doing business throughout the United States. Ntron is in the business of distributing and marketing biomedical products called transcutaneous electrical nerve stimulator (TENS) devices, which are used to alleviate certain types of body pain and to promote physical therapy rehabilitation. Through its sales force, plaintiff sells, consigns and leases these devices to individuals, hospitals, clinics and other health care facilities.

 Fred Carroll, who resides in Richmond, Illinois, was employed by plaintiff in various sales related capacities from November 22, 1982, until October 8, 1986, at which time his employment was terminated. With his wife Nancy, Fred Carroll owned and operated Merit Medical, a company which came into direct competition with plaintiff.

 The plaintiff's complaint charges that the defendant Fred Carroll violated an agreement with Ntron in which he agreed not to divulge certain categories of information, which under the terms of the agreement were confidential information and trade secrets. This information included, among other things, a unique and highly sophisticated marketing program and computer generated analyses for improving the marketing and acceptance of its product which Ntron had designed itself. In addition, the agreement contained a covenant by Mr. Carroll not to compete with Ntron during his employment or within two years after its termination.

 The complaint also raises claims against Fred Carroll, Nancy Carroll and/or Merit Medical for tortious interference with business advantage, unfair competition, violation of the Illinois Deceptive Trade Practices Act, unlawful taking and conversion, breach of fiduciary duty, unjust enrichment, conspiracy, replevin, assault, tortious interference with the contractual relations between Ntron and its employees, and tortious interference with the contractual relations between Fred Carroll and Ntron. Presently, the defendants move to dismiss five of the twelve counts contained in the complaint.

 DISCUSSION

 The court may grant a motion to dismiss under Rule 12(b)(6) only if no relief could be granted under any set of facts that plaintiff could prove which were consistent with the allegations as set forth in the pleadings. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 2233, 81 L. Ed. 2d 59, (1984); see also Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80, (1957). In deciding such a motion, the court must accept plaintiff's allegations as true, and it must view those allegations in the light most favorable to the plaintiff. Gomez v. Illinois State Bd. of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987).

 As to the motion to dismiss Count I of the complaint, defendant Fred Carroll asserts that the restrictive covenant, which is paragraph ten of the "Invention Assignment and Secrecy Agreement" (hereinafter the contract), and the confidentiality provision entitled "Dissemination Control" which is paragraph six of the contract, are overbroad as a matter of law because of the unlimited geographic scope and lack of time constraints contained therein. Defendant argues that the contract is therefore void and unenforceable. The essence of Defendant's argument then, is that the lack of these limitations make the contract per se unreasonable, and hence void.

 "Whether a restrictive covenant is enforceable is a question of law." Image Supplies, Inc. v. Hilmert, 71 Ill. App. 3d 710, , 390 N.E.2d 68, 70, 28 Ill. Dec. 86, 88 (1979). To be enforceable, such a covenant must be reasonable in its time limitations and its geographic scope, involve trade secrets or confidential information, and be reasonably necessary to protect a legitimate business interest. Id., 71 Ill. App. 3d at .

 The element which is at issue here is the reasonableness of the time constraints and the geographic scope in the two paragraphs of the contract. Illinois courts have held that confidentiality agreements, like restrictive covenants, must pass the same test of reasonableness. Disher v. Fulgoni, 124 Ill. App. 3d 257, , 464 N.E.2d 639, 643, 79 Ill. Dec. 735, 739 (1st Dist. ...


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