Lawrence and Allen, Inc. v. Cambridge Human Resource Group, Inc.

• Decision Date: 26 September 1997
• Docket Number: No. 2-96-1337,2-96-1337
• Citation: 226 Ill.Dec. 331,292 Ill.App.3d 131,685 N.E.2d 434
• Parties: , 226 Ill.Dec. 331 LAWRENCE AND ALLEN, INC., Plaintiff-Appellant, v. CAMBRIDGE HUMAN RESOURCE GROUP, INC., Defendant-Appellee (John J. Sheets, Defendant).
• Court: United States Appellate Court of Illinois

Page 434

685 N.E.2d 434

292 Ill.App.3d 131, 226 Ill.Dec. 331

LAWRENCE AND ALLEN, INC., Plaintiff-Appellant, v. CAMBRIDGE HUMAN RESOURCE GROUP, INC., Defendant-Appellee (John J. Sheets, Defendant).

No. 2-96-1337.

Appellate Court of Illinois Second District.

Sept. 26, 1997.

Gabriella R. Comstock, Jeffry J. Knuckles, Knuckles & Jagel, Naperville, for Lawrence & Allen, Inc.

Stephen M. Cooper, Law Offices of Cooper & Storm, Geneva, for John J. Sheets.

Richard L. Mandel, Uve R. Jerzy, Mandel, Lipton & Stevenson, Ltd., Chicago, for Cambridge Human Resource Group, Inc.

Justice COLWELL delivered the opinion of the court:

Plaintiff, Lawrence & Allen, Inc., appeals from an order of the circuit court of Du Page County granting summary judgment in favor of defendant, Cambridge Human Resource Group, Inc., on plaintiff's claim for tortious interference with contract. Defendant, plaintiff's competitor in the corporate employee outplacement industry, hired defendant John J. Sheets (Sheets), plaintiff's former at-will employee, despite Sheets' postemployment restrictive covenant with plaintiff. Sheets is not a party to this appeal. We affirm.

Plaintiff contends on appeal that the trial court improperly granted summary judgment because questions of material fact exist. Defendant argues on appeal, as it did in the trial court, that plaintiff is unable to establish each of the elements of its claim.

The elements of tortious interference with contract are (1) the existence of a valid and enforceable contract between the plaintiff and another; (2) the defendant's awareness of this contractual relation; (3) the defendant's intentional and unjustified inducement of a breach of the contract; (4) a subsequent breach by the other, caused by the defendant's wrongful conduct; and (5) damages. HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill.2d 145, 154-55, 137 Ill.Dec. 19, 545 N.E.2d 672 (1989). We resolve this matter based on the lack of a valid and enforceable contract.

The record on appeal reveals the following undisputed material facts. Plaintiff and defendant were competitors in the highly competitive corporate employee outplacement industry. In the corporate employee outplacement industry, businesses, usually large corporations, retain outplacement firms on a project basis to assist displaced, or soon to be displaced, employees find new employment.

Generally, a business solicits proposals from multiple outplacement firms for the contract on a project, and the outplacement firms submit bids. This general procedure, however, may vary according to individual preferences. For instance, Raymond Vogt, a former director of human resources at Food Machinery Group, Inc., of FMC (FMC), allowed displaced employees to choose from two or three recommended outplacement firms.

The decision of which outplacement firm to hire depends on a variety of factors: the nature and size of the project, the location of the project, the types of employees involved, and the expertise or experience of the outplacement firm. For example, FMC used defendant's services for individual outplacement but not for group outplacement. Similarly, Nichols-Homeshield used a national outplacement firm rather than a local outplacement firm when it needed outplacement services for several employees in different parts of the country. In addition, since most outplacement firms are competitive in price, price is typically a secondary factor.

Regardless of prior success in obtaining a contract for a project, outplacement firms are not assured of any future success with a business. In fact, a business may retain different outplacement firms simultaneously on separate concurrent projects and even on the same project when different types of employees, such as senior executives, middle management, and hourly employees, are involved. While adding that some businesses desire to retain the same outplacement firm on separate concurrent projects for reasons of continuity, Lawrence Stuenkel, plaintiff's senior partner and president, admitted a business may retain different outplacement firms on separate projects and on the same project.

Consequently, a business typically uses the services of several outplacement firms. For instance, FMC used eight or nine different outplacement firms between 1988 and 1995. PCA used nine different firms, some national and some local, during 1990 alone. Deloitte & Touche used four or five different outplacement firms in 1990 and 1991. Ameritech used six to eight different outplacement firms during any given year.

In addition, outplacement firms and businesses in need of outplacement services are well known to each other in the industry. As a result, competing outplacement firms frequently solicit the same businesses, and businesses freely contact competing outplacement firms. Moreover, the names of human resource directors are common knowledge among outplacement firms and are easily ascertainable from standard business directories and from professional organization directories.

Sheets' at-will employment with plaintiff began on January 4, 1988. On June 27, 1989, Sheets signed a postemployment restrictive covenant under the threat of termination and without any change to his job title, responsibilities, or salary. The restrictive covenant contained a covenant not to compete that precluded Sheets from "directly or indirectly compet[ing] with plaintiff within the territorial United States" for two years after his voluntary termination of employment with plaintiff. In addition, the restrictive covenant contained a covenant not to solicit that precluded Sheets from "directly or indirectly perform[ing] similar services for or solicit[ing] any client of [plaintiff]" for the same two-year time period. There was no written employment contract other than the restrictive covenant. Sheets' employment with plaintiff ended on November 12, 1991, and he subsequently began working for defendant.

On May 15, 1992, plaintiff filed a complaint seeking injunctive relief against Sheets and damages for tortious interference with contract against defendant. Plaintiff's amended complaint was identical , except plaintiff substituted a claim for breach of contract against Sheets for its claim for injunctive relief.

Sheets and plaintiff thereafter sought summary judgment. Sheets argued the restrictive covenant was unenforceable. Plaintiff's motion was based on Sheets' alleged failure to answer the amended complaint. The trial court denied both motions.

Defendant subsequently brought its first motion for summary judgment. Relying on Creative Entertainment, Inc. v. Lorenz, 265 Ill.App.3d 343, 202 Ill.Dec. 571, 638 N.E.2d 217 (1994), defendant argued that the restrictive covenant was unenforceable because it was not ancillary to an employment contract and was not supported by consideration. The trial court denied the motion.

During the course of discovery, plaintiff identified nine businesses as the only businesses at issue between the parties: FMC, PCA, ACCO, Deloitte & Touche, Comdisco, Nichols-Homeshield, Ameritech, Rush-Presbyterian-St. Lukes Hospital, and Northern Telecom, Inc. Each of the nine businesses had been a client of both plaintiff and defendant at some time between 1984 and 1993.

After the close of discovery, the trial court granted defendant leave to file another motion for summary judgment. The trial court granted that motion, and plaintiff timely appealed.

A motion for summary judgment should only be granted when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Purtill v. Hess, 111 Ill.2d 229, 240, 95 Ill.Dec. 305, 489 N.E.2d 867 (1986). To determine whether a genuine issue of material fact exists, a reviewing court should consider the pleadings, depositions, admissions, exhibits, and affidavits on file and construe them strictly against the movant and liberally in favor of the opponent of the motion. Purtill, 111 Ill.2d at 240, 95 Ill.Dec. 305, 489 N.E.2d 867.

While a plaintiff need not prove its case in opposition to a motion for summary judgment, it is required to present some factual basis that would arguably entitle it to judgment in its favor. Flint v. Court Appointed Special Advocates of Du Page County, Inc., 285 Ill.App.3d 152, 162, 221 Ill.Dec. 38, 674 N.E.2d 831 (1996). Thus, if a plaintiff fails to establish an element of its cause of action, summary judgment in favor of the defendant is proper. Flint, 285 Ill.App.3d at 162, 221 Ill.Dec. 38, 674 N.E.2d 831.

An order granting summary judgment will be reversed if a genuine issue of material fact existed or if the judgment was incorrect as a matter of law. Flint, 285 Ill.App.3d at 162, 221 Ill.Dec. 38, 674 N.E.2d 831. The disposition of a summary judgment motion is not discretionary and the standard of review is de novo. Flint, 285 Ill.App.3d at 162, 221 Ill.Dec. 38, 674 N.E.2d 831. This court may affirm summary judgment on any basis found in the record. Monticello Insurance Co. v. Wil-Freds Construction, Inc., 277 Ill.App.3d 697, 701, 214 Ill.Dec. 597, 661 N.E.2d 451 (1996).

Before reaching the merits of this appeal, we address two preliminary arguments--defendant's argument regarding the scope of our review and plaintiff's argument regarding the effect of a denial of summary judgment on a later motion for summary judgment. We reject both arguments.

Defendant asserts correctly that "upon appellate review of a summary judgment ruling the appellant may only refer to the record as it existed at the time the trial court ruled, outline the arguments made at that time, and explain why the trial court erred in granting summary judgment." Rayner Covering Systems, Inc. v. Danvers Farmers Elevator Co., 226 Ill.App.3d 507, 509-10, 168 Ill.Dec. 634, 589 N.E.2d 1034 (1992). Defendant then argues that plaintiff improperly raises an argument on appeal regarding confidential information that was not presented...