Opinion ID: 409686
Heading Depth: 2
Heading Rank: 2

Heading: Defendants' State-Law Counterclaims

Text: 83 Judge Will did not allow the issues raised in the defendants' counterclaims to go to the jury. Defendants argue that they presented enough evidence to avoid a directed verdict on several of the counterclaim issues and that a new trial is required. They apparently do not still maintain that Independence hurt Copperweld's debenture offering. 84 It is by no means clear exactly what issues defendants' appealed counterclaims included. The defendants say that the counterclaims rested on two theories: unfair competition and tortious inducement of employee (Br. 60). They disclaim any reliance on trade secrets (Br. 61), but argue that improper means used to gain information is a separate basis of liability, regardless of whether the information constitutes a technical trade secret in the narrow sense of the word, Crocan Corp. v. Sheller-Globe Corp., 385 F.Supp. 251, 254-255 (N.D.Ill.1974). The information must, they admit, be more than purely public information (Br. 62), but internal business information, such as the financial, planning, design, and technical data involved here, cannot be taken by an employee without his (employer's) knowledge or consent and used in a competitive venture (id.). 85 The thrust of defendants' claims seems to be that Grohne competed unfairly with Lear Siegler and (after the sale of Regal) with Copperweld by not telling them of his plans to form Independence (Br. 62-63) and that his hiring of key Regal employees was tortious either because it hurt Regal to lose them or because through them Grohne gained access to internal business information (Br. 63-64). 86 The first obstacle to defendants' theory is that it was established, and the defendants do not contest, that Grohne was not bound by the terms of the Lear Siegler-Copperweld contract not to form his own business. There is nothing sinister in his decision to do so, or in his not telling them of his plans at an early stage. The district court's exclusion of the testimony of Robert Campion, Lear Siegler's president, was obviously proper insofar as that testimony related to Grohne's surreptitious conduct (and) his deception or to Campion's conclusion that Grohne's activity demonstrated a conflict of interest (Def. Br. 64-65). 87 But the defendants also argue that Campion would have testified, if permitted, that Grohne took documents Campion considered confidential before he left Regal. Here it is hard to see that Mr. Campion's opinion had any relevance; one would expect Copperweld or Regal as counterplaintiffs to have to demonstrate continued confidentiality and harm to themselves, rather than rely on the statements of Regal's former owner's president. More important, there is no hint of the improper means that would extend trade secret protection to this category of information under Crocan Corp., supra,-unless it is Grohne's secrecy, in which case the agreement achieves perfect circularity. 30 88 Under the tortious inducement or employee piracy (Reply Br. 24) theory, the focus wavers: sometimes defendants seem to be complaining about confidential information the employees brought with them to Independence (e.g., Br. 63) and sometimes they concentrate on the value the employees had to Regal (e.g., Br. 63, 67). Under its first aspect, the theory suffers from all the defects of the similar argument about Grohne and the Regal Division of Lear Siegler-only more so. For here it is uncontroverted that Regal as Copperweld's subsidiary made no effort to restrict access to the sort of information allegedly taken-i.e., shop drawings and blueprints of machinery. (Reply Br. 23; DX 300 et seq.). 31 89 Under its second aspect, the theory does not state a claim unless the following elements are made out: 90 (1) existence of a valid business relationship or expectancy; 91 (2) knowledge of the relationship or expectancy on part of the interferer; 92 (3) an intentional and malicious interference inducing or causing a breach or termination of the relationship or expectancy; 93 (4) resultant damage to the party whose relationship or expectancy has been disrupted. 94 Ancraft Products Co. v. Universal Oil Products Co., 84 Ill.App.3d 836, 844, 40 Ill.Dec. 70, 76, 405 N.E.2d 1162, 1168 (1st Dist. 1980). In the absence of an employment contract (as here) malice becomes a key element. Without malice, principles of free competition prevent liability to a subsequent employer. Id. at 844, 40 Ill.Dec. 70, 405 N.E.2d 1162. Yet malice is exactly what defendants here could not show, except by asserting that it was inferable from the acquisition of Regal's technical drawings. As was the case with the unfair competition claim, defendants' arguments on this point are circular. They would not have been rendered more convincing if Judge Will had admitted the proffered testimony of two additional witnesses-one an employee who assumed she was being solicited but could not point to anything specific in her conversation with Grohne, the other a man who worked for Regal as an independent sales agent. Copperweld and Regal are basically arguing (t)hat nobody in his business may offer better terms to an employe, himself free to leave. That, in the words of Learned Hand, is so extraordinary a doctrine that we do not feel called upon to consider it at large. Triangle Film Corp. v. Artcraft Pictures Corp., 250 F. 981, 983 (2d Cir. 1918), quoted in TAD, Inc. v. Siebert, 63 Ill.App.3d 1001, 1007, 20 Ill.Dec. 754, 758, 380 N.E.2d 963, 967 (1st Dist. 1978). See also Perlman, Interference with Contract and Other Economic Expectancies, 49 U.Chi.L.Rev. 61, 111-115 (1982). Judge Will did not err in taking defendants' counterclaim issues away from the jury.