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AptarGroup, Inc. v. Chamulak

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

June 10, 2019

AptarGroup, Inc., Plaintiff,
v.
Brenda Chamulak, Defendant.

          ORDER

          Philip G. Reinhard Judge.

         For the reasons stated below, defendant's motion for judgment on the pleadings [36] is denied. The parties should proceed with discovery before the magistrate judge and are urged to consider settlement.

         STATEMENT-OPINION

         Plaintiff, AptarGroup, Inc., brings this action against defendant, Brenda Chamulak, alleging breach of contract (Count I), misappropriation of a trade secret in violation of the Defend Trade Secrets Act (“DTSA”) 18 U.S.C. § 1831 et seq. (Count II) and misappropriation of a trade secret in violation of the Illinois Trade Secrets Act (“ITSA”), 765 ILCS 1065/1-9. Jurisdiction is proper pursuant to 28 U.S.C. §§ 1331 and 1367(a).[1] Defendant moves for judgment on the pleadings [36] (Fed. R. Civ. P. 12(c)) and plaintiff moves for entry of a preliminary injunction [10].

         The standard for ruling on a motion for judgment on the pleadings under Fed.R.Civ.P. 12(c) is the same as that for ruling on a Rule 12(b)(6) motion to dismiss. Hayes v. City of Chicago, 670 F.3d 810, 813 (7th Cir. 2012). All well-pleaded facts are taken as true and all reasonable inferences are drawn in the plaintiff's favor. Regains v. City of Chicago, 918 F.3d 529, 533 (7th Cir. 2019).

         The facts are taken from the allegations of plaintiff's complaint. Plaintiff is a developer and manufacturer of dispensing and sealing products used in the packaging of consumer goods.

         Among other products, plaintiff develops and manufactures dispensers and closures for use in the packaging of consumer goods. Defendant worked for plaintiff for 26 years. In June 2018, while serving as plaintiff's Vice President and General Manager, Personal Care and Home Care, North America, defendant voluntarily terminated her employment to take a position as the president and CEO of Jabil Packaging Solutions (“JPS”) a division of Nypro, Inc. (“Nypro”). JPS and Nypro sell, among other products, dispensers and closures for use in the packaging of consumer goods.

         On October 18, 1994, plaintiff and defendant executed an “Employee Confidentiality Agreement” (“Agreement”).[2] The Agreement provides in relevant part:

“5. Except as instructed or authorized in writing by the Company's Chief Executive Officer, I will never directly or indirectly use, disseminate, disclose, lecture upon or publish any Confidential Information of the Company or any of its customers or clients, whether during or after my employment with the Company.
9. During the term of my employment with the Company and for an additional period of one year following termination of such employment, I will not directly or indirectly, for myself or any Conflicting Organization, sell or offer for sale, or assist in any way in the sale of, Conflicting Products to any customer or client of the Company, upon which I have called or which account I have supervised while an employee of the Company.
10. During the term of my employment with the Company and for an additional period of one year following termination of such employment, I will not directly or indirectly, engage in any Conflicting Organization or accept employment with or render services to any Conflicting Organization or take any action inconsistent with the fiduciary relationship of an employee to his employer, except that, following such termination, I may accept employment with a Conflicting Organization, the businesses of which are diversified, and which with respect to one or more of its businesses considered separately is not a Conflicting Organization, provided that the Company, prior to my accepting such employment, shall receive written assurance satisfactory to the Company from such Conflicting Organization and from me that I will not render services directly or indirectly in connection with any Conflicting Product or be employed in a position where I could use or disclose Confidential Information of the Company or of any of its customers or clients in connection with my employment responsibilities to the benefit of a Conflicting Organization.”

         Paragraph 13 provides in relevant part:

“In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to time, duration, geographic scope, activity or subject, it shall be construed, by limiting and reducing it, so as to be enforceable to the full extent compatible with the applicable law as it shall then appear.”

         The Agreement contains the following relevant definitions:

“‘Confidential Information' of a person or organization means information disclosed to me or known by me as a consequence of or through my employment by the Company, including but not limited to information conceived, originated, discovered or developed by me, not generally known about the business operations, processes and products of such person or organization, including but not limited to information relating to research, Inventions, discoveries, technologies, improvements, plans, developments, techniques, formulae, processes, machines, methods of manufacture, compositions, drawings, models, layouts, projects, purchasing, accounting, financial affairs, engineering, apparatuses, assembly, quality control, laboratory analysis, testing, application, strategies, marketing, merchandising, selling, promotional materials, costs, prices, sales, customers, product development, trademarks and trade names, whether or not reduced to writing or graphic form. Confidential Information shall not include any information which already has been published in a form generally available to the public. Information shall not be deemed to have been published merely because individual portions of it have been separately published, but only if all the material features comprising such information have been published in combination.” “‘
Conflicting Product' means any product, technology or process of any person or organization other than the Company, in existence or under development, which is of the same type or intended for the same use as, or which competes or is potentially competitive with, a product, technology or process of the AptarGroup about which I have received Confidential Information.”
“‘Conflicting Organization' means any person or organization (including but not limited to any person or organization controlled by, controlling or under common control with such person or organization) who or which is engaged in, or is about to become engaged in, research or development, production, marketing or selling of a Conflicting Product.” Plaintiff alleges in Count I defendant breached the Agreement when she started working for JPS. JPS is alleged to be a Conflicting Organization within the terms of the Agreement because it makes and sells products that compete with products of plaintiff about which defendant received Confidential Information during her employment with plaintiff.

         In Count II, plaintiff alleges defendant misappropriated and will inevitably disclose plaintiff's trade secrets in violation of the DTSA. Plaintiff alleges its trade secrets include “the technology, materials, and manufacturing methods used by [plaintiff], including its proprietary LIM silicone molding process, as well as its proprietary cost and pricing models that identify [plaintiff's] cost structure and calculations.” It alleges the circumstances of defendant's employment with plaintiff “gave rise to fiduciary duties to maintain the secrecy of, and not to misappropriate and misuse, ” its trade secrets; that by “accepting employment as president and CEO of JPS, [defendant] will inevitably misappropriate and misuse [plaintiff's] proprietary and confidential information, including [plaintiff's] trade secrets; and “[u]nder these circumstances, [defendant's] misuse of [plaintiff's] trade secrets can be inferred under the ‘inevitable disclosure' doctrine.” The DTSA provides:

(a) Whoever, with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly-
(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;
(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;
(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or ...

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