Appeal from the Circuit Court of Cook County. 95 CH 10936
The opinion of the court was delivered by: Justice Greiman,
The Honorable Michael B. Getty, Judge Presiding.
Plaintiff, Woodfield Group, Inc., filed suit against defendant Donna DeLisle, a former employee of Woodfield, seeking money damages and injunctive relief resulting from an alleged breach of a restrictive covenant agreement relating to her employment with the company. The circuit court granted DeLisle's motion to dismiss the claim, finding the restrictive covenant unenforceable because it failed to meet the requirement of ancillarity. Woodfield appealed.
For the reasons that follow, we reverse and remand.
The facts, according to the complaint, are as follows.
DeLisle began working as a sales representative for Woodfield, a computer hardware and software company, in September 1988. In September 1993, Woodfield promoted DeLisle to the position of sales manager, making her responsible for the day-to-day supervision and management of Woodfield's sales representatives and sales support staff. In this position, DeLisle was entrusted with confidential information.
In February 1994, DeLisle executed a restrictive covenant agreement with Woodfield. Under this agreement DeLisle was prohibited from soliciting or accepting sales of any computer hardware or software from any customer or active prospect of Woodfield's for a period of 18 months following any termination of her employment. For the same time period, the agreement prohibited DeLisle from soliciting, inducing or influencing any person who had a business relationship with Woodfield to discontinue or reduce the extent of such relationship. The agreement also prohibited DeLisle from disclosing any of the company's confidential information for the same time period.
The agreement recited several reasons for its creation, including Woodfield's expenses in developing expertise in the business, its client and customer base, and its goodwill. The agreement also stated that Woodfield's methods of doing business and its client base were confidential and Woodfield wished to maintain that confidentiality. The parties acknowledged and agreed that any breach by an employee of the restrictive covenant would be severely detrimental to the business of Woodfield, and that, without agreeing to the terms of the covenant, Woodfield would not employ the employee. The agreement stated that it supplemented and was in addition to all other employment agreements and clarified:
"This Agreement shall not be construed in any way as an employment agreement, or a guarantee of employment, of Employee by the Woodfield Group. Employee is, and shall remain, an 'employee at will' of the Woodfield Group."
On July 18, 1995, DeLisle terminated her employment with Woodfield. She then went to work for The Future Now, a company engaged in the same business and market area as Woodfield.
Woodfield filed suit alleging that DeLisle breached the restrictive covenant agreement after taking new employment with The Future Now by soliciting and accepting from Woodfield's customers sales of computer software or hardware, and by utilizing and disclosing Woodfield's confidential information in order to sell computer software and hardware for her new employer. As a result, Woodfield alleged that certain customers began purchasing goods and services from The Future Now which they had previously purchased from Woodfield. Woodfield sought money damages and injunctive relief.
DeLisle moved to dismiss the count against her, contending that the restrictive covenant agreement is not enforceable. The circuit court agreed, stating:
"The restrictive covenant agreement in the present case is not an employment contract. This is manifestly evident by the agreement itself which provides employee-at-will. This agreement shall not be construed in any way as an employment agreement or a guarantee of employment of the employee by Woodfield Group. The employee is and shall remain an 'employee-at-will of the Woodfield Group['] -- per the restrictive covenant agreement section 0.8.
Because the Woodfield Group specifically provided that the agreement could not be considered an employment contract, there is no employment contract to which the restrictive covenant could be ancillary. As such, similar to the covenant in Creative Entertainment,[Inc. v. Lorenz, 265 Ill. App. 3d 343 (1994)], the restrictive covenant agreement DeLisle signed is a naked agreement, the sole ...