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Call One Inc. v. Anzine

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

June 7, 2018

CALL ONE, INC., Plaintiff,
v.
LORI BETH ANZINE, Defendant.

          MEMORANDUM OPINION AND ORDER

          MATTHEW F. KENNELLY, DISTRICT JUDGE

         Call One, Inc. has sued Lori Beth Anzine, a former employee, for alleged misappropriation of trade secrets in violation of the Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836 (count 1), and the Illinois Trade Secrets Act, 765 ILCS 1065/2 (count 2).[1] Anzine filed a counterclaim seeking a declaratory judgment that the non-solicitation covenant she signed during her tenure at Call One is unenforceable. Anzine has moved for summary judgment on count 1 of the amended complaint and on her counterclaim. She also has requested that the Court award attorney's fees and costs on the ground that Call One's DTSA misappropriation claim was made in bad faith. For the reasons stated below, the Court grants summary judgment in favor of Anzine on count 1 (the DTSA claim) but denies Anzine's request for attorney's fees and costs, and grants in part Anzine's motion for summary judgment on the counterclaim, finding the non-solicitation covenant unenforceable as written but modifying it to eliminate the problem.

         Background

         The following material facts are taken from the parties' statements of undisputed facts and the exhibits attached to or referenced by those statements.[2]

         A. The non-solicitation covenant

         Call One is a telecommunications service provider that has its principal place of business in Illinois. Anzine was employed by Call One as a sales representative from 2003 until the beginning of January 2018. In 2012, Call One required Anzine to sign a "Non-Competition Agreement" (the Agreement) as a condition of her continued employment. Pursuant to this agreement, for the duration of her employment with Call One, Anzine was prohibited from selling telecommunications services or products other than in her role as a Call One sales representative. See Compl. Ex. B ¶ 1.a. The Agreement also included the following post-separation non-solicitation covenant:

[D]uring the 12 month period after the date upon which the Employee ceases to be employed by Call One (the "Termination Date"), Employee shall not . . . solicit any entity for the purpose of selling any Telecommunication Services or Products, or sell any Telecommunications or Products to any entity which (i) is at the time of solicitation, or which was, at any time from the beginning of Employee's employment by Call One to the date of the solicitation, a customer of Call One, or (ii) was a Prospective Customer of Call One as of the Termination Date.

Id. ¶ 1.b. The Agreement defines a "Prospective Customer" as "a business which Call One has solicited or has made plans to solicit as of the Termination Date." Id. ¶ 1.c. The term "Telecommunications Services or Products" is defined in the Agreement as "all services and products which Call One sells at any time during Employee's employment, or which Call One has made plans to sell as of the Termination Date." Id. ¶ 1.d. The Agreement also includes a severability clause, which contemplates that any provision of the agreement that is found by a court to be unenforceable "may be reformed by a court without further action by the parties to the extent necessary to make such provision valid and enforceable." Id. ¶ 2.

         B. Call One's information and technology security policies

         As a condition of employment, Call One employees agree to comply with policies designed to protect the company's confidential information. Call One runs annual security training sessions and each year requires its employees to acknowledge their agreement to comply with the expectations and controls set forth in Call One's information security policies. The company's information security policies are set forth in a Policy & Procedures Manual that consists of twenty-five numbered Information Security Policies (ISPs), totaling over 100 pages. See Pl.'s Resp. to SUMF on Count 1, Ex. 1 (Surdenik Decl.), Ex. A (Policy Manual). ISP 3, entitled "Confidential Data Policy & Procedures, " states that employee users of confidential data may access confidential data only to perform their job functions. Policy Manual at 20. Further, employees "must protect any confidential information to which they have been granted access and not reveal, release, share, email unencrypted, exhibit, display, distribute or disclose the information unless necessary to do [their] job or the action is approved by [a] supervisor." Id. Under ISP 24, entitled "Email Security Policy & Procedures, " all e-mail "messages containing sensitive information must include the appropriate classification (Confidential) in the header" to "remind recipients that the information must not be disseminated further, or be used for unintended purposes, without the proper authorization." Id. at 121. Employees also are instructed not to use "personal electronic mail accounts . . . for any Call One business messages" because doing so "would circumvent logging, virus checking, content screening, and automated backup controls that Call One has established." Id. at 120.

         Confidential data is defined in several places within the Policy & Procedures Manual. In ISP 4, entitled "Data Classification Policy & Procedures, " confidential information is defined as "any information deemed proprietary and sensitive, " to include the following:

1. Customer Voicemails[;]
2. Customer Call Recordings (wherever applicable)[;]
3. Customer IP addresses & MAC addresses[;]
4. All unique User IDs and passwords that access the Call One infrastructures;
5. All Privileged User IDs and passwords that access the Call [One] infrastructures;
6. Employee or customer personal information including addresses, social-security numbers, dates of birth, etc[.];
7. All customer infrastructure and access schematics;
8. All Call One infrastructure and access schematics;
9. Customer payment information;
10. Customer tax ID;
11. Company financial data; and payroll information[.]

Id. at 26. ISP 23, entitled "Acceptable-Use Policy, " states that "Confidential Information may include . . . customer lists and information, " and it refers employees to ISP 3 for details. Id. at 116. ISP 3, in turn, provides the same non-exhaustive list of examples of confidential data found in ISP 4. See Id. at 22.

         ISP 3 also states that "[u]sers must be advised of any confidential data [to which] they have been granted access. Such data must be marked or otherwise designated 'confidential.'" Id. at 20. Specifically, "[c]onfidential data must be labeled either at the top or bottom of each page or through use of a watermark embedded into the background of each page." Id. Trade secrets likewise "must be identified as such prior to being disclosed" to any employees. Id. at 115.

         Call One's Employee Handbook also touches on information security issues. The handbook prohibits employees from acquiring, using, accessing, copying, removing, altering, or disclosing to any third parties "any confidential business information for any purpose other than to perform duties required in the fulfillment of job responsibilities or in accordance with expressly stated company[-]sponsored activities." Surdenik Decl., Ex. B (Employee Handbook) at 28. This prohibition includes (1) "Unauthorized disclosure of business secrets or other similar confidential information"; (2) "Misuse or unauthorized disclosure of confidential business information not otherwise available to persons or firms outside Call One"; (3) "Unauthorized disclosure of confidential financial data, or ...


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