IBP Confidential Business Documents Litigation, In re, 83-2093

• Decision Date: 13 February 1985
• Docket Number: No. 83-2093,83-2093
• Citation: 754 F.2d 787
• Parties: In re: IBP CONFIDENTIAL BUSINESS DOCUMENTS LITIGATION. IBP, INC., formerly Iowa Beef Processors, Inc., Appellant, v. Hughes BAGLEY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 787

754 F.2d 787

In re: IBP CONFIDENTIAL BUSINESS DOCUMENTS LITIGATION IBP, INC., formerly Iowa Beef Processors, Inc., Appellant, v. Hughes BAGLEY, Appellee.

No. 83-2093.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 14, 1984.

Decided Feb. 13, 1985.

Don H. Reuben, Chicago, Ill., for appellant.

William J. Rawlings and Michael P. Jacobs, Sioux City, Iowa, for appellee.

Before BRIGHT, ARNOLD, and FAGG, Circuit Judges.

PER CURIAM.

IBP, Inc. appeals from a final judgment ¹ denying its request for an injunction compelling Hughes Bagley, a former employee, to return certain documents that allegedly belong to IBP and to honor his contractual and fiduciary obligations to IBP. We remand for additional findings and the entry of an appropriate judgment on those findings.

IBP employed Bagley from mid-1971 to mid-1975, first as a consultant and then as the vice president of retail sales development. In July of 1975, Bagley left IBP's employ, taking with him files that he generated while he worked there. The files (hereafter referred to as the Bagley Documents) included materials that he accumulated before, as well as during, his tenure at IBP. Among the documents in the files were IBP's weekly profit and loss statements, monthly reports on production and sales, the president's staff meeting reports, confidential legal memoranda, data concerning customers and their purchasing behavior, and memoranda outlining IBP's goals, marketing strategies, and pricing formulas.

IBP and Bagley, both with the benefit of counsel, subsequently negotiated and executed a settlement agreement, releasing each other from potential liability arising out of their employment relationship and the termination thereof. In that agreement, Bagley agreed not to assist any third party in bringing a lawsuit against IBP. ²

Despite this provision, Bagley, in late 1976 and early 1977, met with several lawyers who were interested in the potential antitrust ramifications of IBP's activities. In the course of these meetings, Bagley disclosed information about IBP's activities and permitted the attorneys to examine, and in some cases to copy, some of the Bagley Documents.

IBP learned of Bagley's activities in the spring of 1977 and, on June 7, 1977, filed suit in federal district court seeking injunctive relief and damages. IBP alleged that Bagley had breached his fiduciary duty to IBP and violated the express terms of his termination agreement. ³ In June of 1982, IBP dismissed its claim for damages, but continued to seek an injunction compelling Bagley to return the Bagley Documents and to refrain from assisting third parties in litigation against IBP. The district court refused to grant the injunction, concluding that IBP failed to prove irreparable harm and that paragraph 3.2 was void as against public policy.

Bagley left IBP in July of 1975. Since that time, a number of people have perused the Bagley Documents. Representatives of the Packers and Stockyards Administration subpoenaed and examined the documents in the fall of 1975. In late 1976 and early 1977, the lawyers who met with Bagley looked at certain of the documents. When IBP instituted this suit, the boxes containing the documents were made available to all parties for inspection and copying during the first phase of discovery. The Subcommittee on Small Business Administration and Small Business Investment Company Authority and...