Order Form (01/2005)

United States District Court, Northern District of Illinois

Name of Assigned Judge

or Magistrate Judge

James F. Holderman Sitting Judge if Other

than Assigned Judge

CASE NUMBER 12 C 491 DATE 2/1/2012

CASE

TITLE

Instant Technology, LLC vs. Elizabeth DeFazio et al.

DOCKET ENTRY TEXT

Consistent with the discussions in open court, “Defendants’ Motion for Leave to File Brief in Excess of 15

Pages” [13] is granted and plaintiff Instant Technology, LLC’s “Motion for Temporary Restraining Order and

Preliminary Injunction” [4] is taken under advisement. Instant Technology’s “Motion for Expedited Discovery”

[6] is granted, and counsel are to confer and file a modified Form 52 setting the scope of expedited discovery and

the dates by which it can be completed. An evidentiary hearing and briefing schedule, if necessary, will be set

at the status report on 2/2/12 at 10:00 am. The parties are encouraged to discuss settlement.

O[ For further details see text below.] Docketing to mail notices.

STATEMENT

On January 23, 2012, Plaintiff Instant Technology, LLC, filed a verified complaint alleging that the

defendants, former employees of Instant Technology, violated their employment agreements, Illinois law, and

the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, by misappropriating confidential information and

soliciting Instant Technology’s clients in a new business venture. (Dkt. No. 1 (“Verified Compl.”).) Pending

before the court is Instant Technology’s “Motion for Temporary Restraining Order and Preliminary Injunction”

(Dkt. No. 4) and “Motion for Expedited Discovery” (Dkt. No. 6). The defendants have responded to the motion,

contesting the factual allegations of the Verified Complaint and contending that Instant Technology is not entitled

to a temporary restraining order or preliminary injunction. (Dkt. No. 12.) If the court fails to deny the motion

for a preliminary injunction, the defendants ask for an evidentiary hearing and expedited discovery to prepare

for the hearing. (Id. at 5.) 

FACTUAL BACKGROUND

According to the Verified Complaint, Plaintiff Instant Technology, LLC, is a staffing company that

provides intellectual technology (“IT”) professionals to its clients by connecting them with job candidates. 

(Verified Compl. ¶ 3.) Instant Technology has ongoing relationships with both its clients and third-party

suppliers who identify and sponsor IT professionals to work in the United States on H1B visas. (Id. ¶ 16.) 

Specific Instant Technology employees manage and service client accounts, and those employees often form

close relationships with clients and third-party suppliers. (Id. ¶ 17.) Instant Technology keeps a detailed list of

its clients, job candidates, and third-party suppliers, which includes their names, addresses, resumes, and “other

information unique to the client, candidate, and third party supplier.” (Id. ¶ 22.) According to the Verified

Complaint, “Instant Technology’s Confidential Information cannot be independently developed by its

competitors without great effort and expense.” (Id. ¶ 24.) 

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STATEMENT

 Instant Technology protects this confidential information by restricting access to a limited number of

employees using a password, preventing non-employees from accessing the information, forbidding employees

from copying the information, and requiring employees to return the information when they leave the company. 

(Id. ¶ 25.) In addition, Instant Technology requires its employees to sign employment agreements that bar

employees from misappropriating the information. (Id. Exs. A-E ¶ 7.) 

In early January, 2012, five employees who had access to Instant Technologies’s confidential information

either resigned or were terminated. (Id. ¶¶ 47-49.) Those employees include defendant Elizabeth DeFazio, who

was Instant Technology’s Executive Vice President for Sales and Operations, defendants Laura Rehn and Megan

Marker, both Senior Account Executives, and defendants Bethany Meek and Erin Bauer, who both worked as

recruiters. (Id. ¶¶ 26, 32-35.) The Verified Complaint alleges that those five employees started a new business

venture to compete with Instant Technology. (Id. ¶ 50.) It also alleges that the new business venture is funded

and led by defendant Joel Katz, the former CEO of Addison Search Ventures, LLC, another company that

competes with Instant Technology to provide professional IT staff to companies. (Id. ¶¶ 46, 51.) 

Each of the five employees had signed an employment agreement with Instant Technology. (See id. Exs.

A-E.) Each of the employment agreements, in addition to the limitation on misappropriating confidential

information, contains the following non-solicitation clause:

Employee expressly agrees that, as a result of the Proprietary Property Employee will receive,

come in contact with, create, or have access to during the term of Employee’s employment with

Instant . . . Employee shall not directly or indirectly, for a period of two years (2) [three (3) years

in the case of DeFazio] after termination of Employee’s employment with Instant, perform IT

Staffing Services for any of Instant’s Clients who have been serviced by Instant within three (3)

years prior to the termination of Employee’s employment with Instant (“Instant’s Serviced

Clients”) or accept IT Staffing Services business from, or assist any person, firm, partnership,

corporation or other entity to perform IT Staffing Services for or accept IT Staffing Services from,

any of Instant’s Services Clients.

(Id. Exs. A-E ¶ 8.)

The Verified Complaint alleges that prior to leaving, the five employees stole Instant Technology’s

confidential information, took steps to steal clients, and actively encouraged other employees to leave with them. 

(Id. ¶ 52.) Specifically, the Verified Complaint alleges that on December 9, 2011, DeFazio took Meek out for

drinks to encourage her to defect, and charged the drinks to Instant Technology as a business expense. (Id. ¶ 54.) 

Additionally, the five employees held off on closing deals with new clients in the second half of 2011, instead

performing the necessary work to allow them to steal those clients for their new business shortly after leaving. 

(Id. ¶ 55.) The employees also attempted to hire an administrative assistant for the new business while still

working at Instant Technology (Id. ¶¶ 57-58), and cancelled a number of appointments with clients before

leaving Instant Technology, thus allowing them to reschedule on behalf of their new business (Id. ¶ 60). 

After the five employees left, Instant Technology performed a forensic analysis of the employees’

computers. (Id. ¶ 61.) The analysis discovered that in early January, DeFazio downloaded her entire email box

onto a flash drive, Meek downloaded all of the candidate data from her computer, and all five employees sent

dozens of emails with confidential information to their home email accounts and deleted thousands of Instant

Technology emails. (Id. ¶¶ 62-66.) Instant Technology also contacted one of its clients, and discovered that the

five employees had solicited that client to use the employees’ new business. (Id. ¶ 67.) 

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STATEMENT

The defendants’ response includes affidavits from each of the defendants disputing the factual allegations

against them. For example, the affidavits deny that the defendants stole any information from Instant

Technology, inappropriately destroyed any information, or contacted any of Instant Technology’s clients,

candidates or third-party suppliers. (Dkt No. 12, Ex. A ¶¶ 24-25; Ex. B ¶¶ 15, 17; Ex. C. ¶¶ 20, 22; Ex. D ¶¶ 15,

18; Ex. E ¶¶ 16-17.) All five of Instant Technology’s employees stated that they had discussions with Katz about

new employment with him (Dkt. No. 12, Ex. A ¶ 21; Ex. B ¶ 12; Ex. C ¶ 18; Ex. D ¶ 16; Ex. E ¶ 18), but they

all deny conspiring to start a new company and they all state that they are not “actively working” in the staffing

industry at this time (Dkt No. 12, Ex. A ¶¶ 24-25; Ex. B ¶¶ 15, 17; Ex. C. ¶¶ 20, 22; Ex. D ¶¶ 15, 18; Ex. E ¶¶ 16-

17). 

The defendants also contest that the confidential information Instant Technology seeks to protect is in

fact confidential. (Dkt. No. 12, at 12.) They state that the identity of clients and third-party suppliers is well

known in the staffing industry and that all of the information Instant Technology seeks to protect is available to

any person in the staffing industry. (Id.) Specifically, they state that a client’s needs are typically published to

many staffing firms at the same time (Id.), that Instant Technology’s job candidates typically use multiple staffing

firms at one time (Id. at 14), and the identity of third-party suppliers is known throughout the industry (Id.). 

Consequently, Instant Technology does not have an exclusive relationship with its clients, job candidates, or

third-party suppliers. (Id.)

DISCUSSION

As a preliminary matter, Instant Technology labeled its motion as one “For Temporary Restraining Order

and Preliminary Injunction.” The rules for granting a temporary restraining order, however, apply only when

the nonmoving party has not received notice of the motion. See Fed. R. Civ. P. 65(b)(1). Here, the defendants

have received notice of the motion and responded, so the court will treat the motion as one for a preliminary

injunction. See 11A Charles Alan Wright et al., Federal Practice & Procedure § 2951 (2d ed. rev. 2011) (“When

the opposing party actually receives notice of the application for a restraining order, the procedure that is

followed does not differ functionally from that on an application for a preliminary injunction and the proceeding

is not subject to any special requirements.”).

A district court may grant a preliminary injunction after giving notice to the non-moving party. See Fed.

R. Civ. P. 65(a). When considering a motion for preliminary injunction, a court “must determine whether the

moving party has demonstrated 1) some likelihood of prevailing on the merits, and 2) an inadequate remedy at

law and irreparable harm if the injunction does not issue.” Meridian Mut. Ins. Co. v. Meridian Ins. Group, Inc.,

128 F.3d 1111, 1114 (7th Cir. 1997). If the court determines that those two elements are present, “the court must

next consider 3) the irreparable harm the nonmovant will suffer if the injunction is granted balanced against the

irreparable harm to the movant if relief is denied, and 4) the effect granting or denying the injunction will have

on nonparties.” Id. 

When considering a motion for preliminary injunction, “the court may consider affidavits and verified

pleadings as evidence.” Hunter v. Atchison, T. & S. F. Ry. Co., 188 F.2d 294, 298 (7th Cir. 1951). When the

facts that the parties put forward conflict, however, “the district judge normally should conduct an evidentiary

hearing to permit the parties to address credibility issues.” People of State of Ill. ex rel. Hartigan v. Peters, 871

F.2d 1336, 1342 (7th Cir. 1989). The court holds that an evidentiary hearing is appropriate here, where the

parties present two starkly different versions of the facts.

Of course, an evidentiary hearing is necessary only if Instant Technology is entitled to a preliminary

injunction as a matter of law, a proposition the defendants dispute. Specifically, they contend that the restrictive

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STATEMENT

covenants in the employment agreements are not enforceable because they are too general. See Lawrence and

Allen, Inc. v. Cambridge Human Res. Grp., Inc., 685 N.E.2d 434, 441 (Ill. App. 1997) (refusing to enforce a nonsolicitation clause that was too general because it lacked a geographical or time limitation, and because it forbid

soliciting “any client,” regardless of whether the employee had formed a relationship with the client). 

Even assuming the covenants are too general, however, the defendants fail to address the provision of the

employment agreements providing that 

[i]f any portion or portions of the covenants contained in Sections 7 or 8 hereof shall be, for any

reason, held invalid or unenforceable or deemed to be too excessive and therefore, unenforceable,

such portion or portions of the covenant shall be reinterpreted by the court who shall have made

such determination to requalify the limitations provided therein so as to make the covenant

enforceable.

(Dkt. No. 1, Exs. A-E ¶ 9(f).) Even if the covenants are too general, therefore, they may be enforceable to some

extent. The court declines to address this legal challenge to Instant Technology’s motion for a preliminary

injunction without further briefing from the parties and a more developed factual record following an evidentiary

hearing. The defendants’ other legal challenges (that Instant Technology’s confidential information are not trade

secrets and that Instant Technology cannot enforce the employment agreements because it breached them and

because it has unclean hands) are bound up with the facts and cannot be adjudicated until after the evidentiary

hearing. 

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