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Scheffel Financial Services, Inc. v. Heil

Court of Appeals of Illinois, Fifth District

August 22, 2014

SCHEFFEL FINANCIAL SERVICES, INC., Plaintiff-Appellee,
v.
STEPHEN J. HEIL, Defendant-Appellant

Page 386

Appeal from the Circuit Court of Madison County. No. 13-L-1488. Honorable Barbara L. Crowder, Judge, presiding.

SYLLABUS

The trial court properly entered a preliminary injunction enforcing the nonsolicitation clause in the employment agreement between plaintiff financial services company and defendant, a financial consultant, notwithstanding defendant's contentions that plaintiff had no " legitimate business interest" in the individual investors or the " client information" defendant was seeking after he left his position with plaintiff and joined a similar financial services business because the investors were never plaintiff's clients and that the " Protocol for Broker Recruiting" entered into by registered broker/dealers allowed registered representatives, such as defendant, to move between firms that have adopted the protocol free from litigation to enforce restrictive covenants in employment agreements, since the trial court did not abuse its discretion in finding that plaintiff raised a fair question as to the existence of its claimed rights as to both of defendant's arguments and that the status quo should be maintained at the preliminary injunction stage until the case could be decided on the merits, especially when the preliminary injunction would not impose an undue hardship on defendant.

For Appellant: Craig L. Unrath, Heyl, Royster, Voelker & Allen, Peoria, IL; Douglas R. Heise, Heyl, Royster, Voelker & Allen, Edwardsville, IL; Joseph B. Alonso, Daniel H. Wirth, Gregory, Doyle, Calhoun & Rogers, LLC, Marietta, GA.

For Appellee: A. Courtney Cox, Thomas E. Berry, Sandberg, Phoenix & von Gontard, P.C., Carbondale, IL.

PRESIDING JUSTICE WELCH delivered the judgment of the court, with opinion. Justices Cates and Schwarm concurred in the judgment and opinion.

OPINION

Page 387

Thomas M. Welch, J.

[¶1] Stephen J. Heil (Heil) appeals from the entry against him, in favor of Scheffel Financial Services, Inc. (Scheffel), of a preliminary

Page 388

injunction enforcing a nonsolicitation clause contained in an employment agreement. The facts and the issues involved in this case are quite complex. We will simplify them as much as possible and set them forth only as necessary for an understanding of our disposition on appeal. The parties and the circuit court are already intimately familiar with those facts and issues.

[¶2] On August 30, 2013, Scheffel filed in the circuit court of Madison County a three-count complaint against Heil seeking damages for breach of an employment agreement, misappropriation of trade secrets, and tortious interference with contract and business relations. The complaint alleges that Scheffel is in the business of providing independent wealth management services, including investment management, portfolio analysis, financial planning, and other related financial services. Heil had been employed by Scheffel as a senior financial consultant. Prior to beginning employment with Scheffel, Heil had signed an employment agreement which included confidentiality, noncompetition, and nonsolicitation clauses.

[¶3] On August 30, 2013, Heil left his employment with Scheffel and began similar employment with Morgan Stanley, which Scheffel alleges is a direct market competitor to Scheffel. When he left Scheffel, Heil took with him a list of clients he had serviced at Scheffel and, upon starting employment with Morgan Stanley, Heil immediately solicited these Scheffel clients to follow him to Morgan Stanley. Scheffel alleges that Heil thereby breached his employment agreement with Scheffel, misappropriated Scheffel's trade secrets, and tortiously interfered with Scheffel's business relationships with its clients. The complaint seeks ...


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