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Instant Technology, LLC v. Elizabeth Defazio et al.

February 1, 2012

INSTANT TECHNOLOGY, LLC
v.
ELIZABETH DEFAZIO ET AL.



Name of Assigned Judge Sitting Judge if Other or Magistrate Judge James F. Holderman than Assigned Judge

CASE

TITLE

DOCKET ENTRY TEXT

Consistent with the discussions in open court, "Defendants' Motion for Leave to File Brief in Excess of 15 Pages" [13] is granted and plaintiff Instant Technology, LLC's "Motion for Temporary Restraining Order and Preliminary Injunction" [4] is taken under advisement. Instant Technology's "Motion for Expedited Discovery"

[6] is granted, and counsel are to confer and file a modified Form 52 setting the scope of expedited discovery and the dates by which it can be completed. An evidentiary hearing and briefing schedule, if necessary, will be set at the status report on 2/2/12 at 10:00 am. The parties are encouraged to discuss settlement.

O[ For further details see text below.] Docketing to mail notices.

STATEMENT

On January 23, 2012, Plaintiff Instant Technology, LLC, filed a verified complaint alleging that the defendants, former employees of Instant Technology, violated their employment agreements, Illinois law, and the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, by misappropriating confidential information and soliciting Instant Technology's clients in a new business venture. (Dkt. No. 1 ("Verified Compl.").) Pending before the court is Instant Technology's "Motion for Temporary Restraining Order and Preliminary Injunction" (Dkt. No. 4) and "Motion for Expedited Discovery" (Dkt. No. 6). The defendants have responded to the motion, contesting the factual allegations of the Verified Complaint and contending that Instant Technology is not entitled to a temporary restraining order or preliminary injunction. (Dkt. No. 12.) If the court fails to deny the motion for a preliminary injunction, the defendants ask for an evidentiary hearing and expedited discovery to prepare for the hearing. (Id. at 5.)

FACTUAL BACKGROUND

According to the Verified Complaint, Plaintiff Instant Technology, LLC, is a staffing company that provides intellectual technology ("IT") professionals to its clients by connecting them with job candidates. (Verified Compl. ¶ 3.) Instant Technology has ongoing relationships with both its clients and third-party suppliers who identify and sponsor IT professionals to work in the United States on H1B visas. (Id. ¶ 16.) Specific Instant Technology employees manage and service client accounts, and those employees often form close relationships with clients and third-party suppliers. (Id. ¶ 17.) Instant Technology keeps a detailed list of its clients, job candidates, and third-party suppliers, which includes their names, addresses, resumes, and "other information unique to the client, candidate, and third party supplier." (Id. ¶ 22.) According to the Verified Complaint, "Instant Technology's Confidential Information cannot be independently developed by its competitors without great effort and expense." (Id. ¶ 24.)

Instant Technology protects this confidential information by restricting access to a limited number of employees using a password, preventing non-employees from accessing the information, forbidding employees from copying the information, and requiring employees to return the information when they leave the company. (Id. ¶ 25.) In addition, Instant Technology requires its employees to sign employment agreements that bar employees from misappropriating the information. (Id. Exs. A-E ¶ 7.)

In early January, 2012, five employees who had access to Instant Technologies's confidential information either resigned or were terminated. (Id. ¶¶ 47-49.) Those employees include defendant Elizabeth DeFazio, who was Instant Technology's Executive Vice President for Sales and Operations, defendants Laura Rehn and Megan Marker, both Senior Account Executives, and defendants Bethany Meek and Erin Bauer, who both worked as recruiters. (Id. ¶¶ 26, 32-35.) The Verified Complaint alleges that those five employees started a new business venture to compete with Instant Technology. (Id. ¶ 50.) It also alleges that the new business venture is funded and led by defendant Joel Katz, the former CEO of Addison Search Ventures, LLC, another company that competes with Instant Technology to provide professional IT staff to companies. (Id. ¶¶ 46, 51.)

Each of the five employees had signed an employment agreement with Instant Technology. (See id. Exs. A-E.) Each of the employment agreements, in addition to the limitation on misappropriating confidential information, contains the following non-solicitation clause:

Employee expressly agrees that, as a result of the Proprietary Property Employee will receive, come in contact with, create, or have access to during the term of Employee's employment with Instant . . . Employee shall not directly or indirectly, for a period of two years (2) [three (3) years in the case of DeFazio] after termination of Employee's employment with Instant, perform IT Staffing Services for any of Instant's Clients who have been serviced by Instant within three (3) years prior to the termination of Employee's employment with Instant ("Instant's Serviced Clients") or accept IT Staffing Services business from, or assist any ...


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