861 (U1. 1987). As a general rule, however, Illinois law allows competition between a departing
employee and a former employer in the absence of a contractual promise to refrain from such
competition. Composite Marine Propellers, Inc. vy. Van der Woude, 962 F.2d 1263, 1265 (7th
Cir. 1992) (quoting Radiac Abrasives, Inc. v. Diamond Technology, Inc., 532 N.E.2d 428, 433
(Ill. App. Ct. 1988)). In this case, the Agreement does not contain a non-compete clause nor any
other provision governing Dillon’s post-employment responsibilities. As a result, the Agrcement
does not prevent Dillon from competing against Nicor as a former employee. While the
Agrecment does provide for commissions to be paid to Dillon even afler Nicor no longer
employs him for service provided while an employee, that provision is not sufficient to preclude
Dillon from competing with Nicor after leaving the company.

If the parties intended to limit Dillon’s activities for a period of time following his
employment, they could have easily included such a provision in the Agreement. The fact that
such a provision does not appear convincingly suggests it was not part of the contract. Klemp v.
Hergott Group, Inc., 641 N.E.2d 957, 960 (TIL App. Ct. 1994). Lending additional support to
this conclusion is the fact that Dillon and Nicor signed a separate Confidentiality Agreement
governing his post employment activities for onc year after his employment with Nicor is over.
However, the Confidentiality Agreement is not currently at issue in the motion to dismiss.
Accordingly, | dismiss the portions of Counts [I and III concerning the Compensation Agreement
becausc its terms are limited to Dillon’s employment at Nicor and thus have no relevance to his

post-employment activities.


765 ILCS 1065/2(d). Here, Nicor identifies its customer list, profit and pricing model, and
gencral information concerning its client Plastipack as information that Dillon may have illegally
obtained. These items constitute trade secrets. See, e.g, Applied Industrial Materials Corp. v.
Brantjes, 891 F. Supp. 432, 438 (N_D. IIL. 1994) (noting that formula used to determine a price
can be considered a trade secret); Gillis Associated Industries, Inc. v. Cari-All, Inc., 564 N.E.2d
881, 885 (TIL App. Ct. 1990) (noting that customer lists, if customers are not readily
ascertainable, qualify as trade secrets). Accordingly, I will not dismiss Count V. Nicor has pled

specific facts, which if proven true, could provide relief under ITSA.

For the reasons above, Dillon’s Motion to Dismiss is GRANTED as to the portions of

Counts {I and ILL regarding the Compensation Agreement and Count IV but DENIED as to Count

Vv.

ENTER:
James B. Zag e

United States Fict Judge

DATE: 23 © 04



contacted at least one other Nicor customer, Oakland Community College, following his Nicor

employment.

Standard of Review

‘The purpose of a motion to dismiss is to test the sufficiency of the complaint, not to
decide the merits. Triad Assocs., Inc. v. Chicago Hous. Authority, 892 F.2d 583, 586 (7th Cir.
1989). A plaintiff fails to state a claim upon which relief may be granted only if it appears
beyond doubt that the plaintiff can prove no set of facts in support of his claim which would
entitle the plaintiff to relief. Leahy v. Board of Trustees of Community College Dist. No. 508,
912 F.2d 917, 921 (7th Cir, 1990). In reviewing a motion to dismiss, I must acccpt as true all of
Nicor’s well-pleaded factual allegations, and the inferences that can reasonably be drawn from
them. The relevant portions of its complaint should be dismissed if it has failed to allege any set
of facts upon which relief may be granted, Yeksigian v. Nappi, 900 F.2d 101, 102 (7th Cir. 1990),
but T need not accept as true legal allegations that the facts do not support, Evans v. City of

Chicago, No. 01 C 6194, 2001 WL 1654769 (N.D. Ml. Dec. 20, 2001).

Counts TLand ITI: Breach of the Compensation Agreement

When he joined Nicor as an at-will employee, Dillon executed a Compensation
Agreement with the company, which outlines the terms and conditions of his compensation and
benefits structure, sets forth his duties and responsibilities, and replaces all earlier employment
agreements. A fair and reasonable construction of the Agreement is that it governs Dillon’s

behavior while he was a Nicor employee. United Airlines v. City of Chicago, 507 N.E.2d 858,


Count 1V: Breach of Fiduciary Duty

In Count IV, Nicor argues that by establishing corporations with similar names to its
EMC Unit while still employed at Nicor and by hiring away Nicor cmployees, Dillon has
breached fiduciary duties to Nicor. Dillon responds that these claims are preempted by the
Illinois Trade Secrets Act’s (“ITSA”), 765 ILCS 1065/8, and, alternatively, that Nicor cannot
make out claims for breach of fiduciary duty. Even if these claims are not preempted by ITSA,
Dilfon is correct that Nicor cannot establish a breach of any fiduciary duty, To set out a claim for
breach of fiduciary duty, a plaintiff must allege facts establishing: (1) the existence of a fiduciary
duty on the defendant's part; (2) the defendant's breach of the duty, and (3) damages proximately
resulting from the breach. Romanek y. Connelly, 753 N.E.2d. 1062, 1072 (It. App. Ct. 2001).

Regarding the claim that Dillon breached a fiduciary duty by forming competing
companies prior to leaving Nicor, this claim fails because Nicor cannot establish the existence of
a fiduciary duty precluding him from doing so. In general, employees may plan, form, and outfit
a competing corporation while still working for the employer but may not commence actual
competition. Voss Engineering, Inc. y. Voss Industries, Inc., 481 N.E.2d 63, 67 (Ll App. Ct.
1985). Here, Nicor does not allege that Dillon began competing against Nicor while he was still
its employee; it merely states that Dillon incorporated three companies. While he ultimately did
compete against Nicor, this occurred following his resignation. Therefore, Dillon did not breach,
a fiduciary duty owed to Nicor by simply incorporating three companies while still an employee.

Regarding the claim that Dillon breached a fiduciary duty by hiring five former Nicor
employees, Nicor again cannot establish the existence of a fiduciary duty precluding Dillon from

doing so. Asa general rule, only a corporate officer can be held liable for the conduct about


Minute Crder Form (06/9)

United States District Court, Northern District of Illinois

Samet Asal Je Tames B. Zagel Sig Jee ne

CASE NUMBER 03 C 1169 DATE 7/23/2003
CASE NICOR ENERGY vs. GARY W. DILLON
TITLE

{In the following box (a) indicate the party filing the motion, e.g, plaintilY, defendant, 3rd party plaintiff, and (b’ state briefly the mature
af the motion heing presented. |

MOTION:

DOCKET ENTRY:

(1) a} Filed motion of [ use listing in “Motion” box above.]
(2) QO Brief in support of motion due
Bg) Oo Answer brief to motion due___._ Reply to answer brief due
(4) Oo Ruling/Hearingon_sset for at
(5) Oo Status hearing[held/continued to] fset for/re-set for] on ___ set for at
(6) ao Pretrial conference[held/continued to] [set for/re-set for] on sett for at
(7) o Trial[set for/re-set for] on | |. at
@ OO [Bench/Jury trial] [Hearing] held/continued to at
(9) oO ‘This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) ClLocal Rule 41.1 CFRCP41(a\(1) OO EFRCP41(a)(2)
ao) if [Other docket entry] Motion to dismiss is granted/denied in part. Enter Memorandum
Opinion and Order.
qi [For further detail see order attached to the original minute order.]
vA No notices required, advised in open court. Document

Number
No notices required iver wf aot

Notices mailed by judge's statt:

Notified counsel by telephone. JUL 8 o 2003

Inne ducked

Docketing to mail natives fi
Mail 40 450 form, cketing deputy initials

Copy tw judge/magistrate judge.

sian ni

courtronm
ow deputy's
initiuls

Date/time received in
central Clerk's Office

sfopaty aati



which Nicor complains. See Smith-Shrader Co. v. Smith, 483 N.E.2d 283, 288 (Ill. App. Ct.
1985); Hagshenas v. Gaylord, 557 N.E, 2d 316, 324 (Ill. App. Ct. 1990). However, Nicor does
not allege that Dillon was an officer. The pleadings simply state that Dillon’s title was “Vice
President, Power Development of the EMC unit of Nicor Energy.” A title alone is not enough to
make Dillon an officer; in order to be considered an officer, Dillon must have performed
“significant managerial and supervisory responsibilities for the operation of the . . . office,”
which Nicor has not alleged, Aon Risk Services, Inc. of Minois v. Shetzer, No. 01 C 7813, 2002
WL 1989466 (N.D. IL. Aug. 27, 2002) (quoting Zveren Securities, Ine. v. A.G. Edwards and

Sons, Inc,, 719 N.E .2d 312, 318 (ll. App. Ct. 1999)), Accordingly, I dismiss Count IV.

Count V: Illinois Trade Secrets Act
Nicor alleged that Dillon has violated ITSA by illegally obtaining Nicor trade secrets, but
Dillon responds that the pieces of information it obtained regarding Nicor do not constitute trade
secrets under ITSA. In pleading a trade secrets violation, a plaintiff is not required to disclose
the trade secrcts in detail. AutoMed Technologies, Inc. v. Eller, 160 F. Supp, 2d 915, 920-21
(N.D, Ill, 2001). Therefore, only in the most extreme cases will courts dismiss a trade secret
claim for lack of specificity, 7d. at 921, n.3, ITSA defines a trade secret as follows:
“Trade secret” means information, including but not limited to, technical or non-
technical data, a formula, pattern, compilation, program, device, method, technique,
drawing, process, financial data, or list of actual or potential customers or suppliers, that:
(1) is sufficiently secret to derive economic value, actual or potential, from not
being generally known to other persons who can obtain economic value from its
disclosure or use; and

(2) is the subject of efforts that are reasonable under the circumstances to maintain
its secrecy or confidentiality.



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

NICOR ENERGY,

Plaintiff, a
No. 03 C 1169 wn
v. Judge James B. Zagel"
ge
GARY W. DILLON,

Defendant.

MEMORANDUM OPINION AND ORDER

Nicor Energy has brought a six-count complaint against Defendant Gary W. Dillon for
trademark infringement (Count 1); unfair competition (Count TI); breach of contract (Count TIT);
breach of fiduciary duty (Count IV); violation of the Illinois Trade Secrets Act (Count V); and,
unfair competition (Count V1). Dillon now moves to dismiss: (1) portions of Counts IT and TIT
conceming the Compensation Agreement formerly between him and Nicor on the ground that the
Agreement does not govern his post-employment activities; (2) Count TV on the ground that his
conduct did not breach any fiduciary duty owed to Nicor or, alternatively, that any such claim for
misappropriation of trade secrets is preempted by the Illinois Trade Secrets Act (“ITSA”); and
(3) Count V on the ground that pieces of information about Nicor obtained by Dillon are not

trade secrets under TTSA.

Factual Background
In 1986, Dillon founded a company known as Energy Management Company (EMC), an

Oklahoma corporation providing electricity and natural gas to customers in Michigan. In March



of 2001, Nicor acquircd EMC, continued its operation, and employed Dillon as a Vice President
in its Power Development Division of the new EMC Unit. As part of his employment, Dillon
executed a Compensation Agreement, stating that he is responsible for “developing and growing
a profitable and robust consumer and commercial sales and marketing platform in Michigan for
‘Customer Choice’ Natural Gas, Electric and Engineering Services.” The Agreement specifically
replaces all of the terms of his prior employment contract and provides for commission payments
to him from contracts he brings into the company. The Agrecment contains no Janguage
governing post-employment obligations, such as a non-compete clause, and only requires Dillon
to comport with Nicor policy and act with integrity while performing his job.

Nicor has alleged a litany of competitive conduct by Dillon and/or his associates shortly
before and subsequent to his resignation from Nicor, all of which form the factual basis for this
lawsuit. For example, while still employed by Nicor during July and August of 2002, Dillon
formed three Michigan corporations: Dillon Energy Consultants, Inc., EMC Gas & Electric
Company, and EMC Gas Transmission Company. In September of 2002, Dillon resigned from
Nicor and subsequently began to compete against Nicor in Michigan using these corporations. In
December of 2002, one of Dillon’s associates contacted Shell Energy — an existing Nicor client —
regarding the formation of a supplier relationship. During this same time period, Dillon sought a
license from the Michigan Public Service Commission and listed five Nicor employees - John
Fringer, Jan Rosso, Helen Hawiley, Angela Desjarlais, and Denise McClosky — as employees of
his corporation. All of these employees subsequently resigned from Nicor. Prior to resigning,

John Fringer sent Dillon an c-mail detailing Nicor’s Michigan profit and pricing models and

information relating to Nicor’s service to a customer named Plastipack. Finally, Dillon also