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JumpFly, Inc. v. Torling

May 17, 2010

JUMPFLY, INC., AN ILLINOIS CORPORATION, PLAINTIFF,
v.
BJORN TORLING AND PATRICK BURKE, INDIVIDUALS, AND WINDY CITY STRATEGIES, INC., AN ILLINOIS CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiff originally filed a four-count complaint in state court. After additional counts were added, including one alleging a violation of the Lanham Act, 15 U.S.C. § 1125(a), the instant case was removed to this court. Plaintiff, JumpFly, Inc., now brings a ten-count complaint against two former employees, Bjorn Torling ("Torling") and Patrick Burke ("Burke"), and their current employer, Windy City Strategies, Inc. ("Windy City"), alleging rescission of a settlement agreement (Count I), breach of contract (Counts II and V), violation of the Illinois Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count III), violation of the Lanham Act (Count IV), intentional interference with a contract (Counts VI, VII and VIII), and conspiracy to commit intentional interference with a contract (Counts IX and X). Defendant has moved to strike*fn1 plaintiff's prayer for injunctive relief in Counts II, III and IV and dismiss in entirety Counts I, VI, VII, IX and X under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. For the reasons discussed below, the motion is granted in part and denied in part.

FACTS

The facts alleged in the amended complaint are taken as true for purposes of the instant motions. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993).

Plaintiff hired Torling as an account manager on September 1, 2005, and on that date Torling signed an employment and non-compete agreement ("Torling Non-Compete Agreement"). As part of the Torling Non-Compete Agreement, Torling was prohibited from, among other things, inducing business from any customer of plaintiff, encouraging anyone to leave plaintiff's employ or otherwise soliciting any employee of plaintiff, and engaging in any competitive business in any geographic territory in which plaintiff was rendering services. Torling worked as an account manager with plaintiff from September 1, 2005 to December 14, 2007, providing pay-per-click ("PPC") advertising to plaintiff's customers.

During Torling's employment with plaintiff, Torling allegedly created and ran a side business to provide PPC advertising services to certain customers of plaintiff, without plaintiff's knowledge or consent. At some point shortly after February 2007, while still employed with plaintiff, Torling entered into a business relationship with Silverback Strategies LLC ("Silverback"), in which he provided PPC advertising to Silverback.

Plaintiff fired Torling on December 14, 2007, based in part on information that Torling had used plaintiff's computers to visit news, sports, and adult content websites, in violation of plaintiff's policy. Further investigation revealed that Torling might have been using plaintiff's resources to solicit plaintiff's customers on behalf of competing businesses. Plaintiff was aware that Torling was operating a side business when he was terminated.

Plaintiff's attorneys sent a cease and desist letter to Torling to demand he stop all conduct in violation of the Torling Non-Compete Agreement. Torling's attorneys responded to the letter and plaintiff and Torling negotiated a settlement agreement that provided for modifications to the Torling Non-Compete Agreement to allow Torling to engage in a competing business. Among other provisions, the settlement agreement prohibited Torling from soliciting or accepting business from any of plaintiff's current or former customers, prohibited Torling from soliciting or otherwise engaging any of plaintiff's employees, and required Torling to give advance written notice to plaintiff of where he was employed. Around October 21, 2008, Torling organized Windy City. Prior to January 30, 2009, Torling left Silverback, where he was then working. At essentially the same time that he left Silverback, he caused Windy City to begin providing the same or similar services as provided by plaintiff. Plaintiff never received notice of the change in Torling's employment.

Plaintiff hired Burke on October 13, 2006. Burke signed an employment and non-compete agreement ("Burke Non-Compete Agreement") that included a provision entitled Competition and Solicitation, which essentially contains the same restrictions as those found in the Torling Non-Compete Agreement. Plaintiff specifically advised Burke, both during his employment and after, that it would be a violation of Torling's Non-Compete Agreement for Torling to solicit plaintiff's employees to work in a competing business with him. Torling and Burke had weekly meetings between January 2008 and January 30, 2009, at which Torling repeatedly and intentionally solicited Burke to leave plaintiff's employment and become a part-owner of Windy City. Burke quit his job with plaintiff on January 30, 2009. In April 2009 Burke became an employee of Windy City.

On June 23, 2009, plaintiff searched Google for the term "jumpfly." The first sponsored link that appeared in the results was an advertisement for Windy City. Plaintiff determined that Windy City contracted with Google in order to ensure that its website would appear ahead of plaintiff's when the term "jumpfly" is entered into the search engine. Plaintiff's counsel brought the search engine results to the attention of defendant Torling's counsel. The sponsored link was removed.

DISCUSSION

Defendants Torling and Windy City have moved to dismiss certain counts of plaintiff's amended complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). Such motions challenge the sufficiency of the complaint, not the merits, and should be granted only if plaintiff's allegations fail to raise a plausibility of success. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-64, 127 S.Ct. 1955, 167 L.Ed. 2d 929 (2007). To state a claim on which relief can be granted, a plaintiff must satisfy two conditions: (1) the complaint must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon which it rests; and (2) its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950, 173 L.Ed. 2d 868 (2009); Twombly, 550 U.S. at 555; EEOC v. Concentra Health Servs. Inc., 496 F.3d 773, 776 (7th Cir. 2007).

Defendants' Motion to Strike the Prayer for Injunctive Relief in Counts II, III, and IV Count II

Defendants argue that plaintiff's request for injunctive relief in Count II should be stricken. Count II of the Amended complaint is against Torling for a breach of the Torling Non- Compete Agreement. Plaintiff seeks, in addition to damages and other monetary relief, to enjoin defendant's competitive business conduct. Defendants argue, however, that such an injunction is unavailable to plaintiff because the non-compete period, as defined in the Torling Non-Compete Agreement, has already run its two-year course. Defendants assert that plaintiff has failed to allege any basis in law or equity to justify the injunction of Torling's competitive conduct ...


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