United States District Court, N.D. Illinois, Eastern Division
[Copyrighted Material Omitted]
For Covenant Aviation Security, LLC, Plaintiff: Brian Robert Orr, Lowis & Gellen Llp, Chicago, IL; Robert Hill Smeltzer, Lowis & Gellen, Chicago, IL; James E. Mahoney, Griffith & Jacobson, Chicago, IL.
For Gerald L Berry, Defendant: Peter S. Roeser, LEAD ATTORNEY, Darrell J. Graham, Roeser Bucheit & Graham LLC, Chicago, IL.
MEMORANDUM OPINION AND ORDER
Joan H. Lefkow, U.S. District Judge.
Plaintiff Covenant Aviation Security, LLC (" Covenant" ) has brought suit against its former president, Gerald L. Berry, for breach of contract (Count I), misappropriation of trade secrets in violation of the Illinois Trade Secret Act, 765 Ill. Comp. Stat. 1065/1 et seq. (" the ITSA" ) (Count II), and breach of fiduciary duty (Count III). (Dkt. 1.) Berry moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. (Dkt. 10.) For the following reasons, Berry's motion to dismiss is denied.
Covenant, an Illinois limited liability company, provides airport security services such as passenger, baggage and cargo screening, perimeter and access control, and other related services. It derives most of its revenue by providing these services under the Screening Partnership Program (" the SPP" ), which allows local airports to use private companies rather than the United States Transportation Security Agency to perform passenger and baggage screening. Covenant is one of five companies that provide services under the SPP. The largest SPP participant, San Francisco International Airport, has used Covenant for the provision of security services since 2002. The San Francisco contract is worth approximately $95 million annually and requires a large and complex baggage screening operation. Covenant has developed expertise in such operations at great effort and expense.
Berry served as Covenant's president from October 2002 until July 1, 2012. When he began working at Covenant, he entered into an executive employment agreement and signed a copy of Covenant's confidentiality and restrictive covenants policy. He signed an additional restrictive covenants policy in November 2002. The employment agreement and the policies contained non-compete, non-disclosure, non-solicit, and confidentiality provisions. During his time as president, Berry had access to Covenant's confidential and proprietary information, including profit and loss information, internal costs and overhead, operational information, and specific bid and proposal information related to the SPP contracts.
In July 2012, Berry left his position as president and entered into a consulting agreement with Covenant. Under the arrangement, he was to work as an independent contractor for Covenant " to provide consulting services to promote SPP, encourage additional airports to opt out of TSA screening and to get the airports to choose [Covenant] as their contract for Airport Screening Services . . . ." (Dkt. 1 at 5.) When Covenant learned that Berry had formed a competing company known as Berry Transportation Security, LLC, Covenant terminated Berry as independent contractor on October 11, 2012.
After the consulting relationship with Covenant ended, Berry became affiliated with American Homeland Security (" AHS" ) and AHS subsequently began marketing itself as an expert in airport
security services. Covenant alleges on information and belief that Berry has provided Covenant's confidential and proprietary information to AHS and has offered to provide Covenant's confidential and proprietary information to other competitors to use in bidding for a new SPP contract with the San Francisco ...