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Viad Corp. v. Houghton

February 26, 2010

VIAD CORP D/B/A EXHIBIT/GILTSPUR, A DELAWARE CORPORATION, PLAINTIFF,
v.
ANNE HOUGHTON, DEFENDANT.



The opinion of the court was delivered by: District Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

On November 21, 2008, Plaintiff Viad Corp ("Viad") filed a one-count complaint alleging that Defendant Anne Houghton breached a provision contained within Viad's Management Incentive Plan when she left Viad's employment and took a job with a competitor. Both parties have moved for summary judgment [26, 38]. For the following reasons, the Court grants Plaintiff Viad's motion for summary judgment [26] and denies Defendant Houghton's motion [38].

I. Background

On July 21, 1997, Plaintiff Viad Corp, a Delaware corporation, hired Defendant Anne Houghton, an Illinois resident, as a senior designer. Prior to her employment with Viad, Houghton had worked for more than ten years as a designer in the exhibit and events portion of the Exposition industry. Viad, through its three business segments, provides services primarily to major domestic and international corporations, and specifically to exhibition organizers and exhibitors. Viad's three business segments include (i) GES Exposition Services, Inc., (ii) Exhibitgroup, and (iii) travel and recreation services. Houghton was hired by Exhibitgroup, whose business ranges from servicing exhibitors at a trade show (or entities that have a private function in relation to a trade show) to providing design services for private corporate functions.

Exhibitgroup promoted Houghton several times, from Senior Designer to Creative Director of the Chicago division and eventually to Senior Vice President of Design and Creative, a role that she performed for the last three years of her employment with Exhibitgroup. In that role, Houghton supervised the company's team of creative directors and designers and, among other things, had budget responsibilities. Her job duties included "[d]irect involvement in the review and development of design solutions for major project initiative." During her deposition, she clarified that rather than developing design solutions, she relied primarily on her creative directors to develop the solutions, which she then reviewed. Houghton also was involved in client "pitches," was privy to information regarding Exhibitgroup's strategic plan, and knew Exhibitgroup's costs for providing services and projects. Houghton worked primarily in providing design services for "Exhibit Services," as opposed to working in "Exposition Management."

Exhibitgroup paid Houghton a base salary of $175,000. In addition to her base salary, as a senior executive Houghton was eligible to participate in Viad's voluntary Management Incentive Plan (the "Plan"). The 2007 Plan's stated purpose was to provide key executives with an incentive to achieve goals set forth under the Plan. The company-wide performance goals were tied to overall company performance and included targets for pre-tax income, value added measurement, cash flow, revenue, and other performance measures. The terms stated that bonuses paid under the Plan shall be deemed "special compensation."*fn1 Paragraph V9A0 of the 2007 Plan provided, in pertinent part:

In order to better protect the goodwill of Viad and its Affiliates * * * and to prevent the disclosure of Viad's or its Affiliates' trade secrets and confidential information * * * , each participant in this Plan, without prior written consent of Viad, will not engage in any activity or provide any services, whether as a director, manager, supervisor, employee * * *, for a period of two (2) years following the date of such participant's termination of employment with Viad or any of its Affiliates, in connection with the manufacture, development, advertising, promotion, design, or sale of any service or products which is the same as or similar to or competitive with any services or products of Viad or its Affiliates * * *:

(a) with respect to which such participant's work has been directly concerned at any time during the two (2) years preceding termination of employment with Viad or one of its Affiliates, or

(b) with respect to which during that period of time such participant, as a consequence of participant's job performance and duties, acquired knowledge of trade secrets or other confidential information of Viad or its Affiliates.*fn2

The 2007 Plan also required the repayment of payments made under the Plan in the following circumstances:

If, at any time within two (2) years following the date of a participant's termination of employment with Viad or any of its Affiliates, such participant engages in any conduct agreed to be avoided in accordance with paragraph V A, then all bonuses paid under this Plan to such participant during the last 12 months of employment shall be returned or otherwise repaid by such participant to Viad. After reviewing the terms of the 2007 plan, Houghton elected to participate in the plan. In March 2008, Houghton received a payout of $102,000 under the 2007 Plan.

Houghton resigned from Viad effective September 26, 2008, and began working for The Freeman Companies ("Freeman") on October 1, 2008. Exhibitgroup and Freeman compete in the exhibit and events design industry. Like Viad, Freeman divides its business into segments, including Exposition Management Services and Exhibit Services. Houghton testified that Exhibitgroup and Freeman are competitors, that they both sell design services to their clients, and that her current job with Freeman, as with her job at Exhibitgroup, involved the sale of design services to clients:

Q: Are the Freeman Companies and Exhibitgroup ...


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