In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 03-2631

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Plaintiff-Appellee,

v.

SEVERN TRENT SERVICES, INC.,

Defendant-Appellant.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 C 3337—Robert W. Gettleman, Judge.

____________

ARGUED JANUARY 12, 2004—DECIDED FEBRUARY 10, 2004

____________

Before POSNER, EASTERBROOK, and KANNE, Circuit Judges.

POSNER, Circuit Judge. Severn Trent Services appeals from

the grant to the EEOC of an injunction against Severn’s

“enforcing or threatening or attempting to enforce any provision of any contract . . . which prohibits or purports to

prohibit Kevin Murphy . . . from participating in the EEOC’s

investigation and processing of” a charge filed with the

Commission by a former employee of Severn named

Petolick, or from “providing any information, testimony,

and documents to EEOC in connection” with the investigation.
2 No. 03-2631

Murphy had sold his business, which was called HydraStop and employed Petolick, to Pitometer Associates, Inc. In

connection with the sale, he had signed a consulting agreement with Pitometer that contained a nondisparagement

clause forbidding him “directly or indirectly, in public or

private, [to] deprecate, impugn or otherwise make any

remarks that would tend to or could be reasonably construed to tend to defame” Pitometer or its affiliates, officers,

or employees.

Such private gag orders appear to be fairly common.

Wayne N. Outten, “Negotiations, ADR, and Severance/

Settlement Agreements: An Employee’s Lawyer’s

Perspective,” 604 PLI/Lit 235, 316-17 (1999); see, e.g.,

Patlovich v. Rudd, 949 F. Supp. 585, 594-95 (N.D. Ill. 1996)

(Illinois law); Eichelkraut v. Camp, 513 S.E.2d 267, 268 (Ga.

App. 1999). Naturally an employer doesn’t want to be badmouthed by a disgruntled employee who may be privy to

the employer’s dark secrets—especially in a case such as this

in which a person sells his firm and may intend to reenter

the business and seek a competitive advantage by disparaging the firm’s buyer. Cf. John L. Hines, Jr., Michael H.

Cramer & Peter T. Berk, “Anonymity, Immunity & Online

Defamation: Managing Corporate Exposures to Reputation

Injury,” 4 Sedona Conf. J. 97, 106 (2003); Laurence H. Reece

III, “Valuation and Settlement of Business Disputes,” in

Winning Through Settlement: Valuation and Settlement of

Business Disputes § 6.5 (Paul G. Garrity ed., Massachusetts

Continuing Legal Education, Inc. 2001). The

nondisparagement clause in the consulting agreement may

thus have been a substitute for a noncompete clause, which

would be unenforceable if its duration were “unreasonable,” as it might be under Illinois law (which governs

disputes arising under the agreement) if it exceeded two or

three years, and almost certainly if it exceeded five. Com-
No. 03-2631 3

pare Midwest Television, Inc. v. Oloffson, 699 N.E.2d 230, 235

(Ill. App. 1998), and Fister/Warren v. Basins, Inc., 578 N.E.2d

37, 41 (Ill. App. 1991), with Eichmann v. National Hospital &

Health Care Services, Inc., 719 N.E.2d 1141, 1148 (Ill. App.

1999), and Hamer Holding Group, Inc. v. Elmore, 613 N.E.2d

1190, 1197-1201 (Ill. App. 1993). Although the term of the

consulting agreement itself was only three years, the

nondisparagement clause is by its terms perpetual, which

appears to be common, see, e.g., Patlovich v. Rudd, supra, 949

F. Supp. at 594-95, and, so far as we are aware, unexceptionable. A related provision of the agreement forbids Murphy

to solicit or hire any employees of Pitometer or its affiliates

for two years after his consultantship terminates.

The defendant, however, is Severn, not Pitometer.

Pitometer is not a party to this lawsuit. When and how did

Severn come into the picture? We know that Murphy was

working for Severn by September of 2002 at the latest, for it

was then that the EEOC subpoenaed him to testify concerning Petolick’s charge, and the subpoena designates him

as an executive vice-president of Severn. Also according to

the charge, Hydra-Stop was already part of Severn in June

2000 even though the consulting agreement, which was

between Murphy and Pitometer, not Severn, recites that it

is effective from May 31, 2000. It seems that overnight

Pitometer turned into Severn. In fact we’ll see later in this

opinion that Murphy’s relationship with Severn dated from

Pitometer’s acquisition of Hydra-Stop and that Pitometer,

despite the “Inc.” after its name, may be a division of Severn

and, if not, is a subsidiary—and was in May and June of

2000.

The consulting agreement either expired or was terminated during this litigation. Murphy no longer works for

Severn or, so far as appears, has any other relationship with
4 No. 03-2631

the company. The vagueness of the record in these and

other respects is notable.

Murphy told the EEOC that he wouldn’t comply with

the subpoena because Severn had refused to assure him that

it would not sue him for breach of the nondisparagement

clause if he cooperated with the Commission. The

Commission could have sought and obtained judicial enforcement of the subpoena, since obviously Murphy could

not by signing a contract excuse or disable himself from

testifying. EEOC v. Astra USA, Inc., 94 F.3d 738, 743-45 (1st

Cir. 1996); Camp v. Eichelkraut, 539 S.E.2d 588, 597-98 (Ga.

App. 2000); cf. EEOC v. Indiana Bell Telephone Co., 256

F.3d 516, 521-24 (7th Cir. 2001) (en banc); Baker v. General

Motors Corp., 522 U.S. 222, 238-41 (1998); Hartlep v. Torres,

756 N.E.2d 371, 373 (Ill. App. 2001). But instead it wrote

Severn asking the company to give Murphy “an enforceable

waiver or amendment to the consulting agreement indicating that Severn Trent will not take action against him for

any statements he might make to the EEOC in connection

with its investigation” of Petolick’s charge. Severn replied

by expressing puzzlement that the Commission hadn’t

sought to enforce the subpoena and stating that “Severn

Trent has taken no action, nor does its agreement with Mr.

Murphy purport to restrain him from participating in any

EEOC proceeding. Accordingly, Severn Trent will not waive

a negotiated provision of an agreement, made in connection

with the sale of a business and totally unrelated to this or

any other EEOC proceeding or charge of discrimination.”

The Commission then filed this suit for injunctive relief

pursuant to 42 U.S.C. § 2000e-5(f)(2), which authorizes the

agency to seek such relief in aid of its investigations when

“prompt judicial action is necessary to carry out the purposes” of Title VII. Ahearn v. Jackson Hospital, 351 F.3d 226,
No. 03-2631 5

235 and n. 1 (6th Cir. 2003); EEOC v. Pacific Press Publishing

Ass’n, 535 F.2d 1182, 1184-85 (9th Cir. 1976). The district

judge did not issue a written opinion explaining the basis

for his decision to grant the injunction but in oral remarks

said that Severn Trent “has basically conceded that . . . it [is]

intend[ing] to use that provision of the contract [that is, the

nondisparagement clause] to prohibit Mr. Murphy from

going beyond the legitimate bounds of the investigation

itself.” This sounds like a point against the grant of

an injunction, since the EEOC has no right to question

Murphy about matters that are “beyond the legitimate

bounds of the investigation” of Petolick’s complaint. But no.

The judge said that “because the parties were for some

inexplicable reason unable to work this out themselves . . .

[a]nd I said I would issue the injunction, . . . I will.”

At a previous hearing the judge had expressed exasperation at Severn’s refusal to give Murphy a blanket assurance

that he wouldn’t be sued. The judge said that Murphy “is

willing to show up [to be questioned by the EEOC], he just

doesn’t want to be hammered by your client [i.e., Severn],

and I don’t blame him.” The assurance the government was

seeking, however, was that Severn “will not enforce the

non-disparagement provision based on any information he

provides to us” (emphasis added). That was too broad.

Later the demand was narrowed, but ambiguously, to

“communications with the EEOC in the context of our

investigation of the charge.” Severn’s lawyer then told the

judge that “perhaps the parties could work out what that

[’the context of our investigation’] means exactly.” The

hearing was adjourned to let the parties work it out. They

didn’t work it out (we don’t know what the stumbling block

was), so the judge issued the injunction.

That is all we can find in explanation of the judge’s action,

except for his repeating when he issued the injunction that
6 No. 03-2631

“the EEOC wants to talk to Mr. Murphy. Mr. Murphy feels

that he is being prohibited by this contract and is under the

threat of suit.”

The judge’s impatience is understandable, but he was too

abrupt. An injunction so poorly buttressed by explanation

flunks Fed. R. Civ. P. 65(d), which provides that “every

order granting an injunction and every restraining order

shall set forth the reasons for its issuance.” See also Fed. R.

Civ. P. 52(a); 7th Cir. R. 50; Advent Electronics, Inc. v.

Buckman, 112 F.3d 267, 272-74 (7th Cir. 1997); Weitzman

v. Stein, 897 F.2d 653, 658 (2d Cir. 1990). The explanation can

be oral rather than written, as in Six Clinics Holding Corp.

v. Cafcomp Systems, Inc., 119 F.3d 393, 400-01 (6th Cir.

1997), and the absence of explanation can be forgiven

when the justification for the injunction is clear from the

record. Books v. Chater, 91 F.3d 972, 978 (7th Cir. 1996); Hsu

By and Through Hsu v. Roslyn Union Free School Dist. No. 3, 85

F.3d 839, 848 n. 1 (2d Cir. 1996); Sunray DX Oil Co. v.

Helmerich & Payne, Inc., 398 F.2d 447, 450 (10th Cir. 1968); cf.

Ross Brothers Construction Co. v. International Steel Services,

Inc., 283 F.3d 867, 872 (7th Cir. 2002). But it is not clear in

this case.

If Severn merely wanted to prohibit Murphy from making

gratuitous disparagements of it—disparagements wholly

unrelated to the Petolick investigation—there would be no

cause for an injunction unless Murphy or the Commission

had evidence that Severn meant to sue him regardless of

what he said to the Commission, in order to deter signatories to the company’s nondisparagement clauses from

cooperating in government investigations of the company.

Such suits would be frivolous, since a nondisparagement

clause can no more trump a subpoena issued by a government agency than any private contract could. (The contract

explicitly, if unnecessarily, disclaims any intention that it be
No. 03-2631 7

enforced beyond the limits permitted by law.) Indeed, they

would be beyond frivolous; they would be obstructions of

justice. See Yockey v. Horn, 880 F.2d 945, 950-51, 953 (7th Cir.

1989). But we don’t even know whether Severn is a party to

any other contracts that contain a nondisparagement clause

and so may have a policy of using such clauses to intimidate

potential witnesses. And Severn claims to “have information from the witness that he plans to share things unrelated

to the underlying charge . . ., in breach of his agreement.”

The judge did not attempt to determine whether this is true.

Analysis is complicated, however, by a specious argument

by Severn that casts doubt on its good faith—namely that it

is not a party to the agreement containing the nondisparagement clause and has not been shown to be a thirdparty beneficiary either. Were this true, it would support an

inference that Severn’s refusal to offer a blanket waiver of

its rights under the agreement had indeed been intended to

intimidate Murphy, for the refusal would imply that Severn

was prepared to sue him to enforce rights that it knew it

didn’t have. The argument may reflect a tendency of

lawyers to multiply arguments without always considering

the effect on the coherence or persuasiveness of their overall

position. The effect in this case is to create an acute problem

of coherence because at the same time that Severn argues

that it is “not a party to the Consulting Agreement[,] . . . had

no control over the Non-Disparagement Provision when the

Consulting Agreement was signed and cannot waive the

provision now [and]. . . is [not] a successor in interest to

Pitometer,” it insists that “to the extent Mr. Murphy’s

communications with the EEOC are not privileged or

otherwise protected by federal or state law, the terms of the

Non-Disparagement Provision are enforceable. . . . For

example, Mr. Murphy does not have the right to intentionally and maliciously defame Severn Trent about matters
8 No. 03-2631

wholly unrelated to the Petolick Charge just because he is

appearing before the EEOC. The EEOC’s proposed injunction would prevent enforcement of the Non-Disparagement

Provision even under these circumstances” (emphasis in

original). Notice how the potentially defamed party is

identified as Severn, not Pitometer. Recall too how in its

letter to the EEOC Severn had referred to the consulting

agreement as “its” agreement and how it had also said in

the letter that it “will not waive” the nondisparagement

clause.

Severn’s argument that it is not bound by the contract

with Murphy leaves us breathless. The press release that

Severn issued announcing the purchase of Hydra-Stop is

captioned “Hydra-Stop Acquired by Severn Trent Services,

Inc.’s Pipeline Services Group” and states that “Severn Trent

Services, Inc. announced today that it has acquired HydraStop, a pipeline products and services company with special

expertise in water pipelines, serving industry and municipalities worldwide. Hydra-Stop will become a part of the

Pitometer Pipeline Services Group of Severn Trent Services,

Inc. Kevin Murphy, President of Hydra-Stop stated, ‘Severn

Trent Services, Inc. is an excellent fit for our products and

services because of its breadth of capabilities in both water

and wastewater.’ ” From these and other documents it

appears that Pitometer is actually a division of Severn rather

than a corporate subsidiary. It appears that Pitometer

Associates, Inc. was acquired by Severn in 1996 (long before

the acquisition of Hydra-Stop), but later became either

“Pitometer Pipeline Services Group” or just “Pipeline

Services group,” but in either case with no “Inc.” after its

name.

Pitometer is either Severn, or (as Severn unguardedly let

slip in its reply brief, as it had earlier done in its letter to the
No. 03-2631 9

district court) an affiliate of Severn. Either way, it is clear

that Murphy was working for Severn from the date of the

acquisition of his company and that Severn whether directly

or through orders to Pitometer would be entitled to enforce

the consulting agreement, including its nondisparagement

clause. Remarkably, both the EEOC and the district court

failed to determine the relation between Pitometer, the

nominal party to the contract, and Severn, the would-be

enforcer.

Severn’s equivocation concerning its contractual rights

against Murphy is something for the district judge to consider on remand in deciding whether to issue an injunction.

Had Severn unequivocally and irrevocably disclaimed all

rights under the contract, so that it would unquestionably

be estopped to ever try to sue Murphy for breach of the

contract, there would be an argument not only that the

injunction should not have been issued, Alaska Airlines, Inc.

v. City of Long Beach, 951 F.2d 977, 986 (9th Cir. 1991), but

also and more fundamentally that there is no actual controversy before us. Severn could not be adversely affected

by the injunction if it had precluded itself from ever suing

to enforce the nondisparagement clause. It would be as if

Severn’s president had been enjoined from putting on a pair

of wings and flying to Alpha Centauri. And while it is true

that deliberately violating an injunction is punishable as

criminal as well as civil contempt, trying to intimidate a

witness is also criminal conduct; it is, as we pointed out,

obstruction of justice.

We are mindful that unless an injunction is insufficiently

precise to be enforced by contempt sanctions or is otherwise

void, Marseilles Hydro Power, LLC v. Marseilles Land & Water

Co., 299 F.3d 643, 646-47 (7th Cir. 2002); Board of Education v.

Illinois State Bd. of Education, 79 F.3d 654, 657 (7th Cir. 1996);

Gates v. Shinn, 98 F.3d 463, 468 (9th Cir. 1996), the person
10 No. 03-2631

enjoined can challenge it even if the fence that it erects

around him does not actually restrain him because he has in

any event no intention of straying outside the boundary

marked by the fence. If someone obtained an injunction

against a federal judge’s joining the Nazi Party, and the

judge challenged it, it would not be a defense that the judge

had no present or potential interest in joining. That would

be different, however, from a case in which a person was

enjoined from doing something he couldn’t possibly do. But

that is not this case. Severn has not disclaimed its right to

enforce the nondisparagement clause, let alone done so

unequivocally and irrevocably, and so the injunction really

is fencing Severn in.

This is true even though the EEOC could have

subpoenaed Murphy to testify, and still can, with arguably

the same effect on Severn as the injunction. If it makes no

practical difference at all either to Severn or the judiciary

which path of judicial relief is taken—enforcing the subpoena or enjoining Severn from interfering with Murphy’s

testifying—then, it may be asked, why remand the case

for the entry of a further order, whether granting or denying

an injunction, that would be likely to be appealed?

That sounds like yo-yo jurisprudence. If the subpoena is

enforced, Severn will be disabled from taking any step

to retaliate against Murphy, as by trying to enforce the

nondisparagement clause, so Severn seems not to be

aggrieved by the injunction, and only an adversely affected

or aggrieved party can get appellate relief. There are,

however, differences between the two paths that may explain why Severn has appealed rather than just shrugging

its shoulders in the belief that subpoena and injunction are

equivalent. A subpoena would be directed at Murphy,

not Severn, and Murphy might have and assert defenses

against complying with the subpoena that would not
No. 03-2631 11

inculpate Severn. This possibility indicates that Severn may

have something to gain from getting the injunction lifted. In

addition, the injunction is, as we are about to see, both

vague, and so may encourage Murphy to testify beyond the

legitimate scope of the Commission’s inquiry, and without

limitation of time.

There are too many uncertainties to permit us to terminate

the case. It must be returned to the district judge for further

consideration of whether to enjoin Severn. Should the judge

decide to reinstate the injunction, he should give it a more

precise statement of scope than “in connection” with the

Commission’s investigation of Petolick’s charge— such as

“reasonably calculated to lead to evidence pertinent to” the

investigation. “In connection with” might suggest that

Murphy could say anything that came into his mind,

provided only that he said it while testifying in

the Commission’s investigation of Petolick’s charge. In

addition, the injunction has to have a deadline, because 42

U.S.C. § 2000e-5(f)(2) authorizes only “temporary or preliminary relief pending final disposition of such [EEOC]

charge.” See EEOC v. CNA Ins. Cos., 96 F.3d 1039, 1042-

43 (7th Cir. 1996). The injunction must by its terms end

when Petolick’s charge is finally disposed of.

Of course an injunction so limited may not provide

adequate relief, because Murphy may be afraid of being

sued after as well as before Petolick’s charge is resolved.

This conjecture could be tested, and further disputes over

the scope and limits of the injunction perhaps bypassed, by

the Commission’s moving for judicial enforcement of the

subpoena—a course we urge. But should that route not be

taken, or fail, we add that the possibility that Murphy may

balk even if a proper section 2000e-5(f)(2) preliminary

injunction is entered is not an insuperable objection to placing a time limit on that injunction (anyway that limitation
12 No. 03-2631

is dictated by the statute). The EEOC can obtain a permanent injunction (42 U.S.C. § 2000e-5(g)(1)) against Severn

if Severn interferes with or retaliates against a participant

(namely Murphy) in its investigation of Petolick’s charge.

For that would be a separate, permanently enjoinable

violation of Title VII. 42 U.S.C. § 2000e-3(a); Robinson v. Shell

Oil Co., 519 U.S. 337 (1997); Twisdale v. Snow, 325 F.3d 950,

952-53 (7th Cir. 2003); Deravin v. Kerik, 335 F.3d 195, 204-

05 (2d Cir. 2003). True, the participation clause of Title VII

is applicable to an employer only when the participant

against whom he is retaliating is an employee or, we now

know from the Robinson decision, a former employee. But

remember that Murphy was not only a consultant to Severn

but also an executive vice-president of the company. That

would almost certainly have made him an employee of

Severn, employee status for purposes of Title VII and cognate laws protecting employees being determined by the

principles of agency law rather than by labels. Clackamas

Gastroenterology Associates, P.C. v. Wells, 123 S. Ct. 1673

(2003); EEOC v. Sidley Austin Brown & Wood, 315 F.3d 696,

705 (7th Cir. 2002); Hojnacki v. Klein-Acosta, 285 F.3d 544,

549-52 (7th Cir. 2002); Vakharia v. Swedish Covenant Hospital,

190 F.3d 799, 805-06 (7th Cir. 1999); Christopher v. Stouder

Memorial Hospital, 936 F.2d 870, 874-77 (6th Cir. 1991).

So Murphy must now be a former employee of Severn’s—

as in any event the company has conceded by stating in

its reply brief that the EEOC can obtain a permanent

injunction against its retaliating against Murphy if the

Commission can prove that Severn has violated or is violating the participation clause.

The injunction is vacated and the case is remanded for

further proceedings consistent with this opinion.

VACATED AND REMANDED.
No. 03-2631 13

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-02-C-0072—2-10-04