making disparaging, false and
misleading factual assertions about [plaintiff] . . . ."
Finally, for the fourth element, plaintiff alleges that Staffing
Network caused plaintiff to suffer numerous losses, including "loss of
customer goodwill," "loss of competitive position," "loss of future
business," and "threatened loss of . . . accounts." See L & W/Lindco
Prods., Inc., v. Pure Asphalt Co., 979 F. Supp. 632, 640 (N.D. Ill. 1997)
(noting that the plaintiff alleged "loss of competitive advantage," which
was sufficient for pleading purposes). Thus, plaintiff sufficiently has
alleged that it suffered damages as a result of Staffing Network's
actions. Based on the above, the court finds that plaintiff sufficiently
has alleged its claim of tortious interference with prospective business
Staffing Network next raises the affirmative defense of competitor's
privilege. In order for this defense to apply in the instant case,
however, Staffing Network will have to show that it did not "employ
wrongful means" and that its actions did not "create or continue in an
unlawful restraint of trade." A-Abart Electric Supply, 956 F.2d at 1405.
According to plaintiff, Staffing Network's means were wrongful and may
have created an unlawful restraint of trade; plaintiff alleges that
Staffing Network performed several illegal acts through the former
employees, including attempting to steal plaintiffs customer files and to
benefit from plaintiffs other confidential information. Assuming these
allegations are true, as the court must at this stage of the litigation,
Count II survives defendants' motion despite Staffing Network's potential
D. Count IV-Staffing Network-Aiding and Abetting Breach of Fiduciary
Staffing Network correctly argues that Illinois does not recognize the
tort of aiding and abetting breach of fiduciary duty. See, e.g.,
Koutsoubos v. Casanave, 816 F. Supp. 472, 475 (N.D. Ill. 1993).
Therefore, Count IV is dismissed.
E. Count V-Defendants-Misappropriation of Trade Secrets
To state a claim under ITSA, plaintiff must allege that the information
at issue is: "(i) secret (that is, not generally known in the industry),
(ii) misappropriated (that is, stolen from it rather than developed
independently or obtained from a third source), and (iii) used in . . .
defendants' business." Composite Marine Propellers, Inc. v. Van Der
Woude, 962 F.2d 1263, 1265-66 (7th Cir. 1992) (citing statutory
definition of trade secret)*fn9 see also Leggett & Platt, Inc. v.
Hickory Springs Mfg. Co., 132 F. Supp.2d 643, 649-50 (N.D. Ill. 2001).
Defendants argue that the trade secrets that plaintiff alleges
defendants misappropriated were merely broad areas of business
information, and therefore, plaintiff does not state a cause of action
under the ITS A. Plaintiff replies that it alleged that defendants
misappropriated numerous types of information that constituted
secret information, thereby meeting notice pleading requirements.
The court finds that plaintiff has adequately pleaded that
defendants*fn10 violated the ITSA. Plaintiff alleges that Staffing Network
and the former employees stole information from plaintiff-information that
plaintiff claims it kept secret through the restrictive covenants in the
employment contracts, among other means-and used the information in the
recruitment of other employees of plaintiff and in the solicitation of
plaintiff's customers to the benefit of Staffing Network. The information
plaintiff accuses defendants of misappropriating includes:
[U]nique, confidential business practices, models and data; customer
lists; the names of key individuals within the organization of
customers and potential customers . . .; customer[s'] habits[,]
preferences[,] special needs[,] and requirements . . .; recruiting
[and] training methods; site selection [and] compensation models;
dispatch office layouts; pricing data; computer software and
hardware; formats; manuals; methods and techniques of operation and
training; . . . personnel files . . .[;] and marketing strategies.
Thus, plaintiff has adequately pleaded misappropriation of trade secrets
under ITSA, and Count V survives the motion to dismiss.*fn11
F. Count IV-Staffing Network-Unfair Competition
Stating a common law claim for unfair competition is not quite as
simple. As the Seventh Circuit has stated, "the law of unfair competition
. . . is elusive; its elements escape definition." Wilson v. Electro
Marine Sys., Inc., 915 F.2d 1110, 1118 (7th Cir. 1990). Generally,
plaintiff must allege that defendants have misappropriated plaintiffs
"labors and expenditures;" that Staffing Network has reaped where
plaintiff has sown. Lynch Ford, Inc. v. Ford Motor Co., 957 F. Supp. 142,
1997 U.S. Dist. LEXIS 2009 (N.D. Ill. 1997) (citing Wilson,
915 F.2d 1118-19)).
Staffing Network argues that the ITSA preempts plaintiffs claim of
unfair competition, and plaintiff fails to respond directly to this
argument. Once again the court agrees with Staffing Network that, to the
extent plaintiff relies on the use of trade secret information in Count
VI, that count should be dismissed. See 765 ILCS 1065/8(a); Chemetall
GmBh, 2000 U.S. Dist. LEXIS at 10, 2000 WL at 4 For example, plaintiffs
allegation that "Staffing Network misappropriated and used [plaintiffs]
confidential information and trade secrets to solicit [plaintiffs]
customers and potential customers" is clearly preempted by the ITSA. On
the other hand, plaintiffs allegation that "Staffing Network wrongfully
has sought to create and/or expand its . . . business by recruiting
[plaintiffs) management employees
en masse, including with the assistance
of [plaintiffs] employees before they even resign" is not preempted to
the extent that it does not rely on misappropriation of trade secrets.
Thus, defendants' motion to dismiss Count VI is granted without
prejudice. Plaintiff is given leave to file an amended complaint alleging
a claim of unfair competition that does not rely upon misappropriation of
G. Count VII-Staffing Network-Tortious Interference with Employment
The court need not delve deep into Count VII to find plaintiffs
pleading weaknesses. In this claim, plaintiff alleges that Staffing
Network "converted [plaintiffs] confidential information to create
commission structure and other policies identical to the policies of
[plaintiff]" and that Staffing Network "willfully, intentionally, and
maliciously induced [the former employees] to terminate their employment
with [plaintiff] and become employees of Staffing Network . . . . with the
intent to injure [plaintiff]."
To the extent this claim makes the exact same allegations as Count I
plaintiff's claim against Staffing Network for tortious interference with
contractual relations), it is redundant and thus dismissed.
Additionally, to the extent Count VII alleges the misappropriation of
plaintiffs trade secrets, it is preempted by the ITSA. See 765 ILCS
1065/8(a); Chemetall GmBh 2000 U.S. Dist. LEXIS at 10, 2000 WL at 4,
Thus, Count VII is dismissed without prejudice. Plaintiff is given leave
to file an amended complaint alleging a claim of tortious interference
with employment relationship, but only to the extent that the claim is
not duplicative of other counts and does not involve the misuse of
plaintiffs trade secrets.
H. Count VIII-Staffing Network-Violation of the Uniform Deceptive Trade
To state a claim under the Uniform Deceptive Trade Practices Act
("UDTPA"), 815 ILCS 510/1 to 510/7, plaintiff must allege that defendants
publicized untrue or misleading statements that disparaged plaintiffs
goods or services. See Olin Hunt Specialty Prods., Inc. v. Advanced
Delivery Chem. System, 1990 U.S. Dist. LEXIS 19146, 4, 1990 WL 304261, 2
(N.D. Ill. Oct. 31, 1990). Accordingly, plaintiff alleges that "Staffing
Network, through its agents, has violated the [UDTPA] by willfully making
false and derogatory statements of fact to [plaintiffs] customers,
prospective customers, and others relating to [plaintiffs] business and/or
goods and services." As an example, plaintiff refers to Patton's alleged
statements to plaintiffs customers that plaintiff is operating illegally
and will be shut down by the City of Chicago.