The opinion of the court was delivered by: Judge Robert M. Dow, Jr.
Magistrate Judge Maria Valdez
MEMORANDUM OPINION AND ORDER
On July 11, 2008, Plaintiff Mintel International Group, Ltd. ("Mintel") filed a seven-count complaint against Defendant Meesham Neergheen ("Neergheen"), alleging that Neergheen (i) violated the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq., (ii) violated non-disclosure, non-compete, and non-solicitation provisions found in his employment contracts with Mintel, and (iii) misappropriated Mintel trade secrets pursuant to the Illinois Trade Secret Act ("ITSA"), 765 ILCS 1065/1, et seq.*fn1 Mintel seeks injunctive relief, restitution, and compensatory and punitive damages. Mintel also has moved for sanctions, up to and including entry of default judgment, on the basis of Neergheen's alleged spoliation of evidence.*fn2
Neergheen filed three counterclaims, but subsequently withdrew one. [See 212.] The remaining two counterclaims seek a declaratory judgment that the restrictive covenants found in his employment contracts are invalid as a matter of law.
On January 26 and 27, April 30, and May 1, 2009, the Court conducted a bench trial and heard testimony in two phases; the first phase focused on fact witnesses, the second on experts. Subsequently, the parties submitted proposed findings of fact and conclusions of law. Having considered the evidence presented at trial as well as the relevant legal standards, the Court finds that Neergheen breached his employment contract with Mintel, but that he did not violate the Computer Fraud and Abuse Act or the Illinois Trade Secrets Act. The Court also concludes that Mintel is not entitled to any award of sanctions on the basis of its allegations that Neergheen engaged in spoliation of evidence. Finally, as to Neergheen's counterclaims, the Court finds that the restrictive covenants, while overly broad in some respects, are not entirely invalid as a matter of law.
Mintel, headquartered in London, England, provides consumer, product, and market research to its clients around the world. Neergheen worked for Mintel's marketing department from June 30, 1997 until April 30, 2008. His career at Mintel started with a voluntary internship. Approximately three months after Neergheen started, Mintel hired him full-time as Assistant Editor of Global New Products Database in the London office.
As a condition of Neergheen's employment with Mintel, on June 24, 1998, he signed and executed a contract of employment. The contract included the following restrictive covenant:
You will not for the first twelve months at the end of your employment with us, either on your own account or on behalf of any other legal person and in competition with the Company, or any subsidiary directly or indirectly engage in, or be connected with, trade or business carried on by us or any of our associates at the end of your employment * * * * You will not, for the first twelve months after the end of your employment with us, solicit away from us or our associates any person who is and was, when your employment ended, employed by us or an associate as a director, senior manager or sales person for whom you were responsible, or who was a member of any department/project/team in which you worked during the last twelve months of your employment.
The contract also included a confidentiality clause:
In the course of your employment you will have access to certain of Mintel's trade secrets and other proprietary or confidential information of Mintel, including without limitation, procedures, processes, information related to design, production, marketing or distribution, data, databases, computer software, source codes, all methods and means of design, drawing, recording, reproducing information or storing information (including but not limited to electronic or computerized methods or means), supply sources or potential supply sources, customer lists or potential customer lists, bidding policies or procedures or any information concerning pricing or financing policies or procedures * * * * You agree that all such records, methods, lists, materials, names and information, as well as any information and documents provided to, generated by or received by you in the course of your employment and the contents thereof, is confidential and is and will remain the sole property of Mintel. Such confidential information will not be used or disclosed by you other than in connection with your performance of services for Mintel or such confidential information shall be returned to Mintel upon the cessation of your employment.
In 2003, Mintel transferred Neergheen to its Chicago office. On August 4, 2003, Neergheen signed a non-compete agreement which stated:
The undersigned Employee hereby agrees not to compete, either directly or indirectly, with the business of Mintel or any of its subsidiaries, branches or divisions, at any location worldwide at any time during the Employee's term of employment, and for a period of one (1) year following his termination of employment with Mintel, regardless of the reason or cause for such termination. The non-compete agreement contained the following confidentiality clause:
The undersigned Employee acknowledges that Mintel may, in reliance upon the terms of this Agreement, supply or provide the undersigned Employee with access to Mintel's trade secrets, customer lists or other information of a confidential or proprietary nature. In consideration for his employment with Mintel, the undersigned Employee agrees to keep confidential all such information, and not to use such information for his own benefit or to disclose same to any third party.
The non-compete agreement also included a paragraph preventing the solicitation of Mintel employees and customers:
In further consideration of the undersigned Employee's employment with Mintel, the undersigned Employee further agrees * * * he will not solicit or recruit any of Mintel's employees to undertake alternative employment, including any competitive employment, for a period of one (1) year after the undersigned Employee's termination date with Mintel without the express written consent of Mintel's CEO or U.S. General Manager. The undersigned Employee further agrees that in the event of his termination of employment with Mintel, regardless of the reason or cause for such termination, he will not solicit any of Mintel's customers for a period of one (1) year after the undersigned Employee's termination date with Mintel.
In October 2007, Mintel decided to restructure the marketing department in its Chicago office. As a result, Mintel informed Neergheen that his position as Marketing Operations Manager would be eliminated at the end of January 2008. On November 8, 2007, Neergheen interviewed for a new position within the department. However, Sabine Popp, the new head of Mintel's marketing department, did not offer Neergheen the new role because she felt that "[h]e didn't have the project management skills, the marketing experience, the strategic marketing skills that were required for [the new] role." She also informed Neergheen that he had "two realistic options": (1) to "possibly find an alternative role within Mintel;" or (2) "to discuss and finalize an exit strategy."
In a December 4, 2007 e-mail between Mintel executives Steve Charlton and Peter Haigh, Charlton wrote, "I'm going to do it gently and give him a few weeks severance but right now there don't seem to be any other options." On December 7, 2007, Charlton informed Neergheen that his role would be made redundant by the end of January 2008. On December 20, 2007, Neergheen was notified that there was a role available on the services team; however, because the role was distinct from the marketing arena and provided a smaller annual salary than Neergheen's former position, he declined. On January 16, 2008, Neergheen was offered a temporary role. In a letter dated that same day from Charlton to Neergheen, Charlton wrote:
This letter will discuss upcoming changes with regard to your employment relationship with Mintel International. We have had many prior conversations about the pending changes in the Marketing Department and the fact that Mintel has made the business decision to eliminate your position with the company. Although an alternative services role was discussed on the same package, you decided it was too junior and would consider it a demotion. Therefore, we hope you will accept a Temporary role as a PR Executive, reporting to Sabine Popp. It is important to note that this position will end effective April 20, 2008.
Neergheen accepted the temporary role in the public relations department on January 17, 2008.
From January through April 2008, Mintel was aware that Neergheen was interviewing with other companies. On January 11, 2008, Neergheen sent his resume to an acquaintance who worked at Datamonitor, a competitor of Mintel. Neergheen stated that he preferred "to remain in marketing as a marketing manager, with a strong focus on relationship building with clients, trade show management, campaign management and analysis, leveraging all contacts that I have with the current trade associations to secure free booth presence, speaker opportunities, complimentary sponsorships/advertising." Neergheen began interviewing with Datamonitor in February 2008, and in March 2008, Datamonitor offered Neergheen the ...