Crown Packaging Int’l, Inc. v. Brown, 2014 IL App (1st) 140284-U
“Preliminary Injunction to Prevent Alleged Customer Soliciation”
The Illinois Appellate Court held in July, 2014, that the trial court below did not abuse its discretion when it granted a preliminary injunction against defendants who allegedly operated a secret competing business in violation of a restrictive covenant.
Crown Packaging supplies craft breweries with containers such as glass bottles, bottle caps, and related items. In December 1998, Crown Packaging entered into an employment agreement with Brown, which contained a non-compete clause.
In September 2010, Brown started an alleged ‘secret’ side business, Libation Container, Inc. Crown Packaging alleged that Libation competed with Crown Packaging and solicited its customers, and that Brown failed to seek Crown Packaging’s permission to sell craft brewing containers on his own through Libation Container Inc. while employed by Crown Packaging. Brown denies the claims.
The trial court held that Crown Packaging had established the four elements required for a preliminary injunction, ruling that: (1) Crown Packaging showed that it had a protectable interest in maintaining its business relationships with its customers; (2) it established that irreparable harm to its business would occur in the absence of an injunction; (3) it established that there was no adequate remedy at law, as money damages might not fully compensate Crown Packaging for the loss of current and future customers; and (4) it showed that it had a likelihood of succeeding on the merits.
The trial court entered a preliminary injunction in favor of Crown Packaging International, Inc., prohibiting Larry Brown, a former Crown Packaging employee, from soliciting, diverting, taking away or accepting orders from any customer Crown Packaging had performed services for through Brown. Brown then brought this appeal to challenge this injunction, claiming it was over broad and unsupported by the evidence.
The appellate court affirmed, holding that the trial court did not abuse its discretion in awarding an injunction to preserve the status quo established by the employment agreement. The appellate court stated:
We also reject Brown’s claim that the injunction improperly extends past the one-year period established by the employment agreement. Brown’s argument is a bit disingenuous, because it would allow an employee to solicit employees immediately upon termination and drag out litigation long enough for the no-contact period to expire, assiduously fighting injunctive relief in the meantime. We understand that only three days passed between Brown’s termination and the entry of the temporary restraining order. Given the nature of Brown’s actions, however, the trial court had the equitable powers to fashion a remedy appropriate to the situation, and it did not abuse its discretion by essentially establishing a new period of at least one year during which Brown could not solicit Crown Packaging clients.
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