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Cintas Corp. v. Perry

February 20, 2008

CINTAS CORPORATION, A WASHINGTON CORPORATION, PLAINTIFF-APPELLANT,
v.
DANIEL A. PERRY, DEFENDANT-APPELLEE.



Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 03 C 8404-Elaine E. Bucklo, Judge.

The opinion of the court was delivered by: Sykes, Circuit Judge.

ARGUED FEBRUARY 5, 2007

Before EASTERBROOK, Chief Judge, and ROVNER and SYKES, Circuit Judges.

Cintas Corporation alleged in this suit that Daniel A. Perry, a former Cintas sales manager, violated non-competition, non-solicitation, and non-disclosure provisions of his employment agreement when he left his job at Cintas to work for a competitor. Cintas requested injunctive relief, damages resulting from Perry's alleged contract breaches, and restitution. The district court denied preliminary injunctive relief and later granted Perry's motion for summary judgment. The court held the non-compete clause was overbroad and declined to exercise its discretionary authority to rewrite it to make it reasonable and enforceable. The court also held the evidence was insufficient to create a jury issue on the alleged violations of the non-solicitation and non-disclosure provisions of the contract. Cintas appealed from this order. The district court later ordered Cintas to pay Perry's attorney's fees and costs pursuant to a costs-and-fees-shifting provision in the parties' contract. Cintas appealed this order as well, and the appeals were consolidated for oral argument and decision. Finally, the district court entered an order quantifying the amount of fees and costs reasonably incurred by Perry, and Cintas appealed this order. We consolidated this last of Cintas' appeals with the earlier ones and received additional briefing. We now affirm.

I. Background

Cintas, a Washington corporation with its headquarters in Cincinnati, Ohio, is in the business of renting and selling corporate-identity uniforms and related products to customers in the United States and Canada. Perry was employed by Cintas from 1993 to 2003. He started as a Sales Representative; in 1995 he was promoted to Sales Manager; in 1997 he was promoted to Director of Sales Development and Training for Cintas' North Central Group; and finally, in 2000 he became a National Account Manager, with responsibility for Illinois and Indiana. As a condition of being hired, Perry entered into an employment agreement with Cintas, and with each subsequent promotion, he signed an updated and/or new employment agreement. The employment agreement in place at the time Perry resigned from Cintas contained a non-competition provision, a non-disclosure provision, a non-solicitation of employees provision, and an attorney's fees and litigation costs provision.

The first two of these provisions, in relevant part, state as follows:

Non-Competition provision:

While Employee is employed by Employer, and for twenty-four (24) months after such employment ends for any reasons, Employee will not, either directly or indirectly, (i) be employed in a managerial or professional position by, consult for, engage in any Industries business for, or have any ownership interest in any of Employer's competitors named in the attached Appendix A, which will be updated periodically by Employer issuing to Employee a revised and dated list including names of new significant competitors or successors to any previously-listed competitors, or (ii) call on, solicit or communicate with any of Employer's customers or prospects for the purpose of obtaining any Industries business other than for the benefit of Employer. . .

Non-Disclosure provision:

In performing duties for Employer, Employee regularly will be exposed to and work with Employer's Confidential Materials and Information. . . . While Employee is employed by Employer, and after such employment ends for any reason, Employee will not reproduce, publish, disclose, use, reveal, show, or otherwise communicate to any person or entity any Confidential Materials and Information of Employer unless specifically assigned or directed by Employer to do so. The covenant in this Subparagraph (a) has no temporal, geographical or territorial restriction or limitation, and it applies wherever Employee may be located.

The agreement uses the phrase "Confidential Materials and Information" to refer to:

confidential strategies and programs, which include expansion and acquisition plans, market research, sales systems, marketing programs, product development strategies, budgets, pricing strategies, identity and requirements of customers and prospects, methods of operating, service systems, computer passwords, other trade secrets and confidential information regarding customers, prospects and employees of Employer or of its customers and other information not known to ...


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