In the age of electronic communication, a recent case in the eastern district of Wisconsin serves as a cautionary tale for employees who accept employment offers with a mouse click. They should be aware that they could be agreeing to noncompete covenants with that click.
In BMO Harris Bank NA v. Elizabeth Lailer and Robert W. Baird & Co. (2016 WL 6155997), BMO won a preliminary injunction against a former employee it claims was taking its clients and harming its reputation in violation of an electronic employment agreement.
Elizabeth L. worked in the Brookfield, Wisconsin, branch of BMO Bank, serving the bank’s high-net worth clientele. In December 2015, she was offered a new position as “private wealth advisor” and vice president at the bank. She claimed she accepted the transfer without seeing or being made aware of an offer letter or any terms therein. However, BMO produced evidence that Elizabeth had received an emailed offer and had followed steps on the company’s online portal to accept the position. The offer letter, which contained nonsolicitation, confidentiality and trade secret provisions, appeared in the “attachments” portion of the acceptance portal. It also required her to return all company property upon termination, including client information.
One month later, Elizabeth notified BMO that she was leaving to join competing investment advisor Robert W. Baird in a similar role in its Waukesha office. She notified her BMO clients that she was joining Baird and suggested that she could continue to represent them in her new position.
In its complaint against Elizabeth and Baird, BMO claimed that Elizabeth continued to solicit its clients after joining Baird, some of whom did transfer their business to Baird, and that she “continued to misuse proprietary information.” The company accused her of irreparably harming its reputation and client relationships. Elizabeth countered that because she never saw, much less agreed to, the terms in the offer letter, she was free to solicit BMO customers.
In granting injunctive relief to BMO, the district court agreed with BMO that strong electronic evidence existed that Elizabeth had received and consented to the nonsolicitation and confidentiality terms and that she breached them. “There is no evidence before the Court to suggest that the terms embodied in BMO’s Offer Letter were hidden in such a manner as to render the parties’ proposed agreement unenforceable,” the court wrote, concluding that Elizabeth’s click of “Yes, I accept” on the online portal amounted to an acceptance of the terms.
The court also found the terms themselves, at 12 months’ duration, reasonable in time and geographic location, and that BMO, as a private banking and investment advisor, had a protectable interest in its client relationships and reputation. Moreover, the wealth advisor position is a particularly crucial role in maintaining goodwill. The court concluded that the continued harm to BMO outweighed the harm to the defendants in enforcing the agreements.
“While it is true that the public is generally served by the mobility of workers, the enforcement of unambiguous contracts, negotiated at arm’s length, is equally a matter of public concern,” the court wrote.
Our Chicago non-compete agreement, employment law and business dispute attorneys have defended high level executives in covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago business. You can view that article by clicking here.
DiTommaso Lubin Austermuehle a firm of Chicago business dispute lawyers handles litigation over non-compete clauses for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Our Chicago business lawyers with offices near Naperville, Oak Brook and Chicago have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results.
DiTommaso Lubin Austermuehle a Chicago business litigation law firm represents both plaintiffs and defendants in such cases, and can also help stop litigation before it starts by reviewing contracts to look for covenants and clauses that could create problems later. Our firm has also handled many shareholder and LLC disputes between owners of closely held corporations, and LLCs.
Based in Oakbrook Terrace and downtown Chicago, our Lombard and Palatine non-compete clause and business dispute lawyers take cases from Oak Park and Hinsdale and many other cities throughout Illinois, as well as in Indiana, Wisconsin and the entire United States. To learn more or set up a free consultation, please contact one of our Chicago business dispute lawyers through the Internet or call toll-free at 1-877-990-4990 today.