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Plastic Recovery Technologies, Co., and Kevin Gavin v. Jerry Samson

July 28, 2011


The opinion of the court was delivered by: Charles P. Kocoras, District Judge:


This case comes before the Court on the motion of Defendant Jerry Samson ("Samson") to dismiss the complaint of Plaintiffs Plastic Recovery Technologies, Co. ("Plastic Recovery") and Kevin Gavin ("Gavin") (collectively, "Plaintiffs") pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, Samson's motion is granted in part and denied in part.


I. The Parties

Gavin is the President of Plastic Recovery, a company that provides replacement parts to the waste industry. Beginning in February 2009, Samson spoke with Gavin concerning potential employment at Plastic Recovery. At that time, Samson was the Vice President of Sales of Wastequip, a customer of Plastic Recovery. Pursuant to his employment agreement with Wastequip, Samson was subject to a non-competition and non-solicitation agreement (the "Non-Competition Agreement").

II. The Employment Agreement Between Samson and Plastic Recovery

In May 2009, Samson and Plastic Recovery executed an employment agreement (the "Employment Agreement"). According to the Employment Agreement, Samson would begin working for Plastic Recovery on July 1, 2009. Plastic Recovery agreed to pay Samson a base compensation of $10,000 per month and a guaranteed compensation of $5,417 for 12 months. The Employment Agreement contained an arbitration clause which required any claim or controversy arising out of, or related to, the Employment Agreement to be settled by arbitration. The Employment Agreement also expressly addressed Samson's Non-Competition Agreement with Wastequip. If Wastequip enforced the Non-Competition Agreement, then under the Employment Agreement, all cash compensation from Plastic Recovery to Samson would end and Samson's base compensation would accumulate and be paid to Samson once the non-compete period ended.

III. Samson Sought a Release from the Non-Competition Agreement

Before and after Samson signed the Employment Agreement with Plastic Recovery, Samson told Plastic Recovery that he was confident that Wastequip would release him from the Non-Competition Agreement. In July 2009, Samson agreed to contact Wastequip and attempt to negotiate a release from the Non-Competition Agreement. On August 20, 2009, after contacting Wastequip, Samson forwarded to Plastic Recovery an e-mail from Wastequip which stated that Wastequip would not release Samson from the Non-Competition Agreement. Plastic Recovery then told Samson that it would only continue its relationship with him if he provided a legal opinion stating that the Non-Competition Agreement was unenforceable. Samson never provided a legal opinion to Plastic Recovery even though he, on August 26, 2009, represented that he had obtained such an opinion.

IV. The Arbitration Proceeding

On September 24, 2009, Samson resigned and demanded $120,000 payment from Plastic Recovery. Because Plastic Recovery refused to pay the money to Samson, on December 3, 2009, Samson initiated arbitration proceedings with the American Arbitration Association ("AAA") pursuant to the arbitration clause in his Employment Agreement. Among other claims, Samson asserted that Plastic Recovery breached the Employment Agreement. As part of its defense, Plastic Recovery argued that Samson also breached the Employment Agreement. On February 11, 2011, the arbitrator rendered an award in favor of Samson (the "Arbitration Award").

V. Plaintiffs' Complaint and Samson's Motion to Dismiss

On December 7, 2010, the day before the arbitration hearing, Plaintiffs filed their complaint in the Circuit Court of Cook County, Illinois. Plaintiffs argue that the Employment Agreement, along with its arbitration clause and any resulting arbitration award, are unenforceable because the Employment Agreement is void on grounds of fraudulent misrepresentation, insufficient consideration, and public policy. Plaintiffs also claim that the arbitration award is unenforceable against Gavin because Gavin is not a party to the Employment Agreement. Finally, Plaintiffs claim that Samson tortiously interfered with its prospective economic advantage by telling Wastequip that Plastic Recovery intended to compete with it. Although Plaintiffs filed their complaint on December 7, 2010, Plaintiffs waited over three months, and after the arbitrator ...

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