TRO Denied Because Severance Agreement Waived Non-Compete, Employer Lacked Evidence, Delay
In Bridgeview Bank Group v. Meyer, 2016 IL App (1st) 160042 (February 17, 2016) the Illinois appellate court affirmed a Cook County judge’s decision to deny to a bank a temporary restraining order against a former senior vice president. The employee was terminated and received a severance agreement that waived his covenant not to compete/restrictive covenant. The severance agreement, however, kept in place his confidentiality obligations. Like many lawsuits against former employees with employment agreements, the lawsuit and request for a temporary restraining order alleged that the employee had contacted customers and taken information during his departure process.
The court focused upon the fact that obtaining a temporary restraining order is an extraordinary remedy and that the lawsuit was not specific. The court explained that “At the outset, we note that there are virtually no well-pled facts in Bridgeview’s complaint regarding information Meyer allegedly took with him or customers he solicited after he left. Rather, the complaint is replete with nonspecific and conclusory allegations.” The court also focused upon the delay in seeking a temporary restraining order: “If, as Bridgeview now contends, Meyer’s possession of the contact list, standing alone, is an obvious breach of his confidentiality agreement, we can conceive of no reason why Bridgeview would take such a leisurely approach to protecting that information.”
There are two important points from this appeal. First, courts are often reluctant to enter a temporary restraining order against an employee unless there is good reason to do so. My experience is that judges will want to see evidence of irreparable harm that has a specific factual basis. Second, the waiver of a non-compete in the severance/separation agreement was important. The court noted that the employee was free to compete. Finally, it is important not to delay in seeking injunctive relief. Why should the court treat a case as an emergency if the employer did not do so?
Finally, it is important to note that procedurally this case is not over. The employer still has the right to seek an evidentiary hearing and the result could change. There are still substantive claims for breach of contract, breach of fiduciary duty, tortious interference with business relationships and under the Illinois Trade Secrets Act.