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Avison Young-Chicago, LLC v. Puritz

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

November 29, 2017

AVISON YOUNG-CHICAGO, LLC, Plaintiff,
v.
KEITH PURITZ, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Ruben Castillo, Chief Judge

         Avison Young-Chicago, LLC ("Plaintiff), a real estate brokerage firm, brings this action against its former brokers Keith Puritz, Brett Kroner, and Eric Fischer ("Defendants"), alleging violations of the federal Defend Trade Secrets Act, 18 U.S.C, § 1836, and the Illinois Trade Secrets Act, 765 Ill. COMP. Stat. 1065/1-9, as well as claims of unjust enrichment and breach of contract. (R. 13, Am. Compl. ¶¶ 1-5, 8, 52-88.) Presently before the Court is Defendants' motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). (R. 50, Mot.) The Court denies Defendants' motion for the reasons stated below.

         RELEVANT FACTS

         Between March 27, 2015, and April 14, 2015, Defendants entered into separate, almost identical, [1] brokerage agreements with Plaintiff (collectively, the "Agreements") under which they agreed to perform real estate brokerage services. (R. 13, Am. Compl. ¶¶ 27, 34; see also R. 13-1, Puritz Agreement; R. 13-2, Kroner Agreement; R. 13-3, Fischer Agreement.) Each Agreement has the same confidentiality and "no raiding" provisions. (R. 13-1, Puritz Agreement at 7-9; R. 13-2, Kroner Agreement at 7-9; R. 13-3, Fischer Agreement at 6-8.)

         The confidentiality provision provides, in relevant part:

9. Confidentiality. In the course of Broker's engagement with [Plaintiff], Broker may obtain or create confidential information ("Confidential Information"), which means information or materials belonging, relating to, developed by or for, or purchased by or for [Plaintiff], [Plaintiffs parent], [any company affiliated to Plaintiffs parent], and/or their respective clients that is not publicly available, including without limitation, information or materials concerning: (i) real estate transaction, management, financing or consulting opportunities, or listings related to any types of properties or interests therein whether for sale, lease, encumbrance, or other conveyance; (ii) the names and all other information concerning existing or potential clients that are not generally known and are not readily ascertainable; (iii) marketing or sales; (iv) any and all records, mailing lists, correspondence, memoranda, files, presentation formats, manuals, forms, procedural information, and any other information; (v) employees, independent contractors, compensation arrangements, or the terms of employment or engagement of any employee or independent contractor; or (vi) financial condition or performance, strategy, operations, future or proposed products or services, ideas, techniques, know-how, trade secrets, or processes. Confidential Information also includes information that has [sic] obtained from a third party under an obligation of confidentiality. . .. Broker will not (i) disclose Confidential Information to any person or entity, or (ii) make any use whatsoever of Confidential Information.

(R. 13-1, Puritz Agreement at 7-8; R. 13-2, Kroner Agreement at 7-8; R. 13-3, Fischer Agreement at 6-7.) The no raiding provision provides, in relevant part:

14. No Raiding. During Broker's engagement with [Plaintiff] and for a period of twelve months following the expiration or termination of such engagement, Broker will not. . . solicit . ., any of the employees, independent contractors or salespeople of [Plaintiff], [Plaintiffs parent], or [any company affiliated to Plaintiffs parent] to leave [Plaintiff], [Plaintiffs parent], or [any company affiliated to Plaintiffs parent] and associate with a competing real estate services firm located in or serving the area served by Broker during Broker's engagement with [Plaintiff] or employ, engage, or retain (or arrange to have any other person solicit, employ, engage or retain) or otherwise participate in the employment, engagement, or retention of any employee, independent contractor or salesperson of [Plaintiff], [Plaintiffs parent], or [any company affiliated to Plaintiffs parent].

(R. 13-1, Puritz Agreement at 9; R. 13-2, Kroner Agreement at 9; R. 13-3, Fischer Agreement at 8.)

         Plaintiff alleges that it agreed to pay Defendants a transition bonus, a contingent bonus, and ongoing commissions in exchange for Defendants' agreement to the confidentiality and no raiding provisions. (R. 13, Am. Compl. ¶¶ 28-32, 34; see also R. 13-3, Fischer Agreement at 1-3, 6-8.) Plaintiff claims that it took additional measures to protect its confidential information by instructing Defendants to read and familiarize themselves with Plaintiffs policies and procedures, which state that any confidential information belongs exclusively to Plaintiff if it was created or developed on Plaintiffs time or using Plaintiffs resources and relates to Plaintiffs business. (Id. ¶¶ 36-37, 39, 41.)

         Plaintiff alleges that Puritz and Kroner's team brokered industrial real estate and lease transactions in the Midwest region, and, as part of a "select group of executives, " Plaintiff entrusted them with access to its trade secrets, confidential information, and long-term business relationships with clients. (Id. ¶¶ 10, 18.) Additionally, Plaintiff claims that Kroner and Puritz attended monthly meetings restricted to the company's top executives where participants discussed the company's most important strategic issues, including potential acquisitions, client development initiatives, recruitment efforts, and competition with Cushman & Wakefield, a competing real estate brokerage firm. (Id. ¶¶ 12, 20.)

         Plaintiff alleges that because Defendants Puritz and Kroner were principals of Plaintiff s firm, they had access to and knowledge of Plaintiff s strategic plans, including its plans related to client development, real estate deals, and recruitment. (Id. ¶ 24.) Moreover, Plaintiff claims that it introduced Defendants to a number of its existing and prospective clients and allowed Defendants to use its brand and goodwill. (Id. ¶¶ 25-26.) Plaintiff also gave Defendants access to its software platform, "Apto, " which stored all of Plaintiff s data regarding customer relationships, real estate properties, property listings, and pending and prospective real estate deals. (Id. ¶ 22.) Plaintiff alleges that Defendants were only given access to Apto based on their promises to abide by the Agreements. (Id. ¶ 23.)

         On September 2, 2016, Defendants resigned from Plaintiffs firm and accepted positions at Cushman & Wakefield. (Id. ¶¶ 11-12.) During the weeks preceding Defendants' resignation, they allegedly downloaded confidential and trade secret information from Plaintiff (Id. ¶ 13.) For example, Kroner allegedly copied most or all of the email from his company email account, including client emails and another email file containing detailed information about Plaintiffs clients. (Id. ¶¶ 45-47.) Additionally, Kroner and Fischer allegedly took paper files containing confidential and proprietary information about customers and their pending or contemplated real estate transactions. (Id. ¶¶ 48-50.) Plaintiff alleges that Defendants' actions have injured Plaintiff and will result in an irreparable loss of customers, revenue, and competitive standing. (Id. 16-17.)

         PROCEDURAL HISTORY

         On December 22, 2016, Plaintiffs filed a complaint in the Circuit Court of Cook County, Illinois, and Defendants later removed the action to this Court pursuant to 28 U.S.C. §§ 1331 and 1441(a). (See R. 1, Notice of Removal; R. 1-2, State Court Compl.) On February 6, 2017, the Court dismissed the complaint without ...


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