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United Road Towing, Inc. v. Incidentclear, LLC

United States District Court, N.D. Illinois, Eastern Division

February 19, 2015

UNITED ROAD TOWING, INC., Plaintiff,
v.
INCIDENTCLEAR, LLC, GEORGE BERGERON, and RYAN DAVIDS, Defendants.

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge.

Now before the Court is Defendant IncidentClear LLC ("IncidentClear"), George Bergeron ("Bergeron"), and Ryan Davids ("Davids") (collectively the "Defendants") motion to dismiss brought pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). The Defendants also move to strike two paragraphs of Plaintiff United Road Towing Inc.'s ("United") complaint. For the following reasons, the Defendants' motion to dismiss is denied and their accompanying motion to strike is also denied.

BACKGROUND

For the purposes of the instant motion, the following well-pleaded allegations derived from United's complaint are accepted as true for the purposes of this motion. The Court draws all reasonable inferences in favor of United. Purdue Research Found v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782-83 (7th Cir. 2003).

United is a Delaware corporation with its principal place of business in Mokena, Illinois and is a citizen of Delaware and Illinois. United provides towing and highway assistance services to municipalities and other local governmental authorities throughout the United States. United deploys a fleet of vans and tow trucks along highway and road systems to look for and assist broken down and stranded motorists and provide them with towing, transport, recovery and other services.

In 2006, United purchased Export Enterprises of Massachusetts, Inc. ("Export") in a stock transaction (the "Acquisition") from Bergeron's wife. Bergeron was an employee of Export when United was purchased. At the time of the Acquisition, Export was in an existing contractual relationship with the Massachusetts Department of Transportation ("MassDOT") to perform towing and highway assistance services across six separate geographic regions within Massachusetts. As part of the Acquisition, United acquired, among other things, all of Export's goodwill, trade secrets, intellectual property, customer lists, supplier lists, inventory, and customer agreements. As part of the sale of Export, Bergeron became an employee and officer of United and executed a series of successive employment agreements in 2006, 2007 and most recently in 2010 (the "Bergeron 2010 Employment Agreement"). When Bergeron became Vice President of Towing Operations, he was responsible for overseeing the bidding for the MassDOT contract on behalf of United.

Davids began his employment with United in April 2006. Davids started as a financial analyst and then corporate controller, and on January 1, 2011, he became Vice President of Business Development. As a condition of his employment and promotion, Davids executed an Employment Agreement in 2011("Davids' 2011 Employment Agreement").

Both Bergeron's 2010 and Davids' 2011 Employment Agreements contain a finite term of employment contained in the "Employment Period" provision which provides:

(b) Employment Period. The period during which the Employee shall serve as an employee of the Company (the "Employment Period") shall commence on the date hereof, and unless earlier terminated pursuant to this Agreement, shall expire on the twelve (12) month anniversary of the date hereof (unless extended by mutual agreement of the parties hereto).

Bergeron's and Davids' Employment Agreements contain a series of Restrictive Covenants that broadly prohibit a variety of conduct related to the disclosure of confidential information or engaging in business associations which are detrimental to United. The Restrictive Covenants, contained in the Employment Agreement, were in force "during the tenure of Employee's employment with [] [United] and for a period of two (2) years following termination...." Section 3 of both Bergeron's and David's Employment Agreements state:

Restrictive Covenants. In consideration of the foregoing, Employee agrees that Employee shall not, directly or indirectly:
(a) during the tenure of employee's employment with the Company and for a period of two (2) years following termination thereof, alone or as a partner, joint venture, officer, director, employee, manager, executive, advisor, consultant, agent, sales representative, independent contractor, owner, lender, financier, or security holder of any company or business, in any activity in direct or indirect competition with the Business...;
(b) during the tenure of Employee's employment with the Company and for a period of two (2) years following termination thereof, directly or indirectly, (i) induce any person which is a customer of the Company, its subsidiaries, successors or assigns (collectively, the "United Companies") to patronize any business directly or indirectly in competition with the Business conducted by the United Companies; (ii) canvass, solicit or accept from any person which is a customer of the United Companies, any such competitive business; or (iii) request or advise any person which has a business relationship with the United Companies to withdraw, curtail or cancel any such person's business with such entity;
(c) during the tenure of Employee's employment with the Company and for a period of two (2) years following termination thereof, directly or indirectly, (i) induce any person which is a customer of the Company, its subsidiaries, successors or assigns (collectively, the "United Companies") to patronize any business directly or indirectly in competition with the Business conducted by the United Companies; (ii) canvass, solicit or accept from any person which is a customer of the United Companies, any such competitive business; or (iii) request or advise any ...

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