applying a similarly worded state law
How later courts described this case
- applying a similarly worded state law
- lost profits don’t need to be proven with precision
- similarity should be judged in light of marketplace realities
- losses are irreparable where they are “very difficult” to calculate
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MEDCOR, INC.,
Plaintiff,
No. 21 CV 2164
v.
Judge Manish S. Shah
CHRISTOPHER GARCIA, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff Medcor, Inc. alleges that by starting a rival company, using
confidential information, and soliciting clients and employees, defendants
Christopher Garcia, Amanda Brown, Ravi Patel, and MedWay Health, Inc. breached
contracts and violated state and federal trade secret laws. Medcor moves for a
temporary restraining order and preliminary injunction enjoining further
competition and use of confidential information. For the reasons that follow,
plaintiff’s motion is granted in part, denied in part.
I. Standard of Review
The standards for issuing a temporary restraining order and a preliminary
injunction are identical. Mays v. Dart, 453 F.Supp.3d 1074, 1087 (N.D. Ill. 2020)
(citations omitted). A preliminary injunction is “an extraordinary remedy never
awarded as of right.” See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008).
A plaintiff seeking a TRO or preliminary injunction “must establish that he is likely
to succeed on the merits, that he is likely to suffer irreparable harm in the absence of
preliminary relief, that the balance of equities tips in his favor, and that an injunction
is in the public interest.” Protect Our Parks, Inc. v. Buttigieg, 10 F.4th 758, 763 (7th
Cir. 2021) (quoting Winter, 555 U.S. at 7). Although Medcor doesn’t need to show that
it will definitely win the case, Medcor must show that it has “some likelihood” of
succeeding on the merits. Mays v. Dart, 974 F.3d 810, 822 (7th Cir. 2020) (quoting
Speech First, Inc. v. Killeen, 968 F.3d 628, 637 (7th Cir. 2020)).
II. Facts
Medcor provided onsite health services to clients throughout North America.
[66] at 23–24.1 During the COVID-19 pandemic, Medcor developed a screening
system and testing protocol based on Centers for Disease Control and Prevention
guidance, and provided clients with related health security screening, testing, and
worksite exposure management. Id. at 27–28, 30–36. Garcia and Brown were
employees at Medcor, [81] ¶¶ 19, 20, and directed the operation of its COVID-19
1 Bracketed numbers refer to entries on the district court docket. Referenced page numbers
are taken from the CM/ECF header placed at the top of filings. The facts are taken from the
preliminary injunction hearing, [66], the amended complaint (to the extent the allegations
are not disputed), [81], and from exhibits filed with the parties’ briefs. Any document
previously filed under seal and referenced in this opinion should be unsealed; by February
16, 2022 the parties shall file a joint statement identifying the docket entries for unsealing
or stating a basis for continued secrecy, with a proposed deadline for filing public versions of
documents redacting only trade-secret information. See Baxter Int’l, Inc. v. Abbott Labs., 297
F.3d 544, 546 (7th Cir. 2002) (citations omitted) (“In civil litigation only trade secrets,
information covered by a recognized privilege (such as the attorney-client privilege), and
information required by statute to be maintained in confidence (such as the name of a minor
victim of sexual assault), is entitled to be kept secret on appeal.”). Commercially sensitive
information can be kept secret at the discovery stage, but general interests in commercial
advantage and privacy aren’t sufficient reasons to keep information relevant to judicial
decision-making secret. See id. at 545.
screening and testing services. [13-1] ¶¶ 13, 18–19. Patel, a doctor, provided on-site
physician services to Medcor clients. [81] ¶ 21; [13-1] ¶ 20.
Medcor hired Garcia to be its operations manager in fall 2019. See [69-12]. His
contract included restrictions on the use of Medcor’s trade secrets and proprietary
information, id. at 10–16, along with non-solicitation and non-compete clauses. Id. at
16–18. Around the same time, Medcor hired Brown as a medical administrator. See
[69-6]. Later, Brown was promoted to operations director. See [69-10]. Like Garcia’s
contract, both of Brown’s written employment agreements with Medcor included a
prohibition on the use of the company’s trade secrets and proprietary information,
[69-6] at 5–6; [69-10] at 4–8, and non-solicitation and non-compete clauses. [69-6] at
6; [69-10] at 8–9. Patel entered into two agreements with Onsite Physician Services
of Illinois, SC, and promised to provide medical services to Medcor clients. See [69-
13]; [69-14]. The first of Patel’s agreements, see [69-14], was superseded by the
second. See [69-13] at 6. Patel’s second contract with Onsite included a non-disclosure
agreement. See [69-13] at 10–12.
Medcor fired Garcia in December 2020. [81] ¶ 4; see [69-11]. A day later, Garcia
used his cell phone to take photographs of documents displayed on his Medcor laptop.
See [74-3] at 89–121. The documents were Medcor contracts and proposals, and
included client contact information, screening and testing protocols, business plans,
and pricing information. See [69-16]; [69-17]; [69-18]; [69-19]; [69-20]; [69-21]; [69-22];
[69-23]; [69-24]; [69-25]; [74-3] at 89–121. Garcia said he took the photographs so that
he could use the formatting and structure of Medcor’s documents as templates for a
company that he was starting. See [74-3] at 116–17, 120–21. Garcia registered a
website for that company, MedWay, three days after he was fired, and incorporated
the business a month later. See [13-1] ¶ 33.
Three months after he was fired, Garcia was featured on a webinar where he
suggested that MedWay had been in operation since the beginning of the pandemic
and took credit for work completed by Medcor, attributing his personal experiences
working for Medcor and its clients to MedWay. See [70-5]; [74-3] at 224–231. Around
the same time, Garcia communicated with a Medcor employee about staffing needs
at MedWay events and getting her out of an employment contract with Medcor. See
[74-3] at 180–200.
After Garcia founded MedWay, Medcor lost the business of two existing clients:
CBS Sports and Shed Media. Shed Media became MedWay’s largest client, see [74-3]
at 140–41, while CBS Sports entered into negotiations with MedWay but ultimately
chose a different vendor for its COVID screening and testing services. See [74-4] at
88–90; [46-2]. The parties dispute whether Medcor lost these accounts because of
defendants’ actions or because CBS and Shed were dissatisfied with plaintiff’s
services and pricing. See [74-1] at 8–12; [69-1] at 4–6.
Messages between Garcia and Brown2 show that Garcia and MedWay wanted
the CBS account, Garcia fed Brown negative information to relay to CBS, Brown
2 In his deposition, Garcia said that he last communicated with Brown in January or
February 2021, see [74-3] at 30–31, and couldn’t remember communicating with her over
Facebook Messenger or about MedWay. See id. at 24–28. Brown said that she last talked
with Garcia at the end of his employment (in December 2020), [74-6] at 42, and had never
communicated with Garcia over Facebook Messenger. Id. at 44. Brown also said that she
instructed a CBS executive not to sign additional contracts with Medcor in
anticipation of a deal with MedWay, and Brown, hoping to join MedWay,
contemplated disrupting the relationship between Medcor and CBS. See [70-41] at
57–76. Patel paid for a golf outing with a CBS executive and Garcia, and the three
men also went to dinner together. See [74-3] at 34–35. But emails between Medcor
and CBS executives show that CBS had some problems with Medcor’s services, see
[74-5], and that the company continued to negotiate with Medcor on future contracts
even after Brown was fired in April 2021. See [74-8]; [74-9]; [74-10]. Although the
evidence is mixed, I find that defendants exploited an opening between CBS and
Medcor and caused Medcor to lose the CBS account.
A Shed executive asked Brown to send Garcia’s phone number to her in
January 2021, and Brown sent the executive Garcia’s contact information. See [46-1]
¶¶ 17–18; [70-7]. Brown forwarded email exchanges about the Shed–Medcor proposal
process to Patel. See [69-7]; [69-15]. Garcia credited Brown with delivering Shed to
MedWay, see [70-41] at 83, and Patel congratulated Garcia for winning the Shed
account. See [70-31] at 120. But a Shed executive said Medcor lost the account
because of higher pricing, and that Garcia hadn’t contacted her after his firing. See
wasn’t aware of MedWay until learning about it during an interview with a Medcor employee.
Id. at 29. But Facebook Messenger communications recovered from Brown’s cellphone show
that Brown and Garcia were frequently communicating on the platform in March 2021 and
spoke often about MedWay. See [70-41] at 55 (Garcia used an account under another name).
These inconsistencies and Brown’s related attempt to destroy evidence, see [70-47]; [74-6] at
91–94, render Garcia and Brown unreliable and incredible. I give no weight to their testimony
unless undisputed or corroborated by contemporaneous reliable documents.
[46-1] ¶¶ 13–23.3 In an email to Brown from January 2021, the Shed executive
attached a competing firm’s pricing, and Brown told Medcor executives that pricing
was an issue for Shed. See [74-13]. After turning down Medcor’s proposal, see [74-15],
Shed hired a third party (not MedWay) to provide COVID screening and testing
services. See id.; [46-1] ¶ 13. Shed’s executive later contracted with MedWay because
of her past relationship with Garcia and because MedWay’s pricing fell within Shed’s
budget. See [46-1] ¶¶ 14–23. As with CBS, the evidence about Shed is mixed but I
conclude that Medcor lost the Shed account because of pricing, not defendants’
conduct.
The parties also dispute whether defendants diverted the business of a
potential Medcor client, Carr-Hughes Productions. See [74-1] at 12–13; [69-1] at 6–7.
Brown received an inquiry from Carr-Hughes on February 16, 2021, and forwarded
that email exchange to Patel. See [69-8].4 Emails between Brown and others at
Medcor a month later show that Brown did not follow up on the Carr-Hughes business
on behalf of Medcor. See [69-28]. A day after she was asked about the status of the
Carr-Hughes inquiry by Medcor executives, see id., Brown messaged Garcia to
inquire whether he was doing business with Carr-Hughes. See [70-41] at 2–3. But
3 Medcor argues that the Shed executive’s affidavit isn’t credible because Garcia edited it, see
[70-19], but the fact that Garcia edited the statement before the executive signed it doesn’t
mean that the statement is false. That the executive misremembered which month she asked
Brown for Garcia’s contact, see [46-1] ¶¶ 15–18, doesn’t destroy the statement’s credibility,
either. But I give less weight to the affidavit than if it were an independent statement free
from biased influence.
4 Brown also forwarded another email from what appears to be a Medcor client to Patel. See
[69-9].
Brown said that Medcor had decided not to pursue clients like Carr-Hughes. [46-3]
at 3–4. And a Medcor executive said that the company had generally decided not to
pursue clients like Carr-Hughes because of concerns about costs, and that such clients
were low priority for the company. See [74-4] at 187–188. Medcor didn’t secure the
Carr-Hughes business because it was a low priority for the company.
Medcor filed this lawsuit in April 2021. [1]. Medcor moved for a preliminary
injunction and temporary restraining order, [12], and the parties conducted limited,
expedited discovery. See [33]. Plaintiff seeks injunctive relief on the basis of (1) breach
of contract; (2) tortious interference of contract; (3) violations of the Defend Trade
Secrets Act and the Illinois Uniform Trade Secrets Act; (4) state and federal claims
for unfair competition and trademark infringement; and (5) breach of the duty of
loyalty. See [12]; [81].5
A member of the senior management team and shareholder at Medcor testified
at the preliminary injunction hearing. See [66] at 21. In general, the Medcor executive
testified about defendants’ employment with the company, their contracts with
Medcor, and the confidential nature of the documents that Garcia photographed. See
[66]. The presentation of evidence was not completed in the time allotted, and by
agreement, instead of reconvening the hearing, the parties took depositions and
further briefed the motion. See [65]; [74-3]; [74-6]; [74-7].
5 Medcor filed an amended complaint, [81], which added defendant Katherine Thomas to the
case and includes additional claims for (1) intentional interference with prospective economic
advantage; (2) fraud in the inducement; (3) negligent inducement; (4) violation of the Illinois
Uniform Deceptive Trade Practices Act; and (5) civil conspiracy. Because defendants have
not yet answered the amended complaint and the evidentiary record for the motion has
already been established, I ignore additional facts alleged in the amended complaint.
III. Analysis
A. Likelihood of Success on the Merits
Choice of Law
Garcia argues that Medcor’s breach of contract and trade secret claims against
him are governed by California law, citing his contract’s choice-of-law provision. See
[74-1] at 13–15. The contract says that “[e]xcept in California and any other State
where prohibited by law, this Agreement shall be governed by the laws of Illinois
regarding contracts made and entered into in Illinois and without regards to conflict
of laws principles.” [69-12] at 23. Medcor doesn’t dispute that Garcia lived and worked
in California during his employment with Medcor. See [69-1]; see also [81] ¶ 19.
A federal court exercising supplemental jurisdiction over state-law claims
applies the choice-of-law rules of the forum state. See McCoy v. Iberdrola Renewables,
Inc., 760 F.3d 674, 684 (7th Cir. 2014) (citing Felder v. Casey, 487 U.S. 131, 151
(1988); Houben v. Telular Corp., 309 F.3d 1028, 1032 (7th Cir. 2002)). Under Illinois
choice-of-law rules, Illinois law applies “unless an actual conflict with another state’s
law is shown, or the parties agree that forum law does not apply.” Sosa v. Onfido,
Inc., 8 F.4th 631, 637 (7th Cir. 2021) (quoting Gunn v. Cont’l Cas. Co., 968 F.3d 802,
808 (7th Cir. 2020)).
Garcia argues that California law is in actual conflict with Illinois law because
California doesn’t enforce restrictive covenants like those in his contract and doesn’t
recognize the doctrine of inevitable disclosure. See [74-1] at 15, 23 (citing Cal. Bus. &
Prof. Code. § 16600; Globespan, Inc. v. O’Neil, 151 F.Supp.2d 1299, 1235 (C.D. Cal.
2001)). Assuming that Garcia is right that an outcome-determinative conflict exists
between Illinois and California law, the analysis turns to the contract’s choice-of-law
provision, and to the Second Restatement of Conflict of Laws. See Townsend v. Sears,
Roebuck and Co., 227 Ill.2d 147, 163 (2007).
The parties selected Illinois law to govern the agreement “[e]xcept in
California.” [69-12] at 23. Garcia wants to read that exception to mean “except as
applied to a California resident,” or “except as applied to claims arising out of work
performed in California.” See [74-1] at 13–15; [46] at 7–8. But I take the clause to
mean that Illinois law applies except when claims are brought in California, and so
the parties chose Illinois law to govern the claims in this case, brought in an Illinois
federal court.6
Given that the parties chose Illinois law to govern their agreement, under
§ 187 of the Restatement, Illinois law applies to Medcor’s breach of contract claim
unless either (1) Illinois has “no substantial relationship to the parties or the
transaction” or (2) applying Illinois law would be “contrary to a fundamental policy”
of California and California has a materially greater interest than Illinois in the case
and California law would have been selected “in the absence of an effective choice of
6 Even if the exception in Garcia’s contract’s choice-of-law clause meant that the contract’s
choice of Illinois law didn’t apply to certain claims against him, that doesn’t mean that the
parties chose California law to govern the agreement. See Restatement (Second) of Conflict
of Laws § 188 (Am. L. Inst. 1971). “Except in California” does not mean California law applies.
At most, it means that a dispute defaults to the choice-of-law rules applied by the court
hearing a claim. As discussed below, even in the absence of an effective choice of law by the
parties, the claims in this case are likely governed by Illinois law.
law by the parties.” Restatement (Second) of Conflict of Laws § 187 (Am. L. Inst.
1971).
Illinois has a substantial relationship to the parties and the transaction
because Medcor is an Illinois corporation. See [81] ¶ 18. And even if application of
Illinois law to a California employee would be contrary to a fundamental policy of
California (see Cal. Lab. Code § 925), Garcia hasn’t shown why California has a
materially greater interest in this case than Illinois does. See Restatement (Second)
of Conflict of Laws § 188 (Am. L. Inst. 1971); see also Dancor Constr., Inc. v. FXR
Constr., Inc., 407 Ill.Dec. 997, 1016 (2d Dist. 2016) (citing Maher & Associates, 267
Ill.App.3d 69, 77 (2d Dist. 1994)) (“Illinois follows the modern approach to choice-of-
law questions, placing the greatest importance on the public policy of the state in
which the case is brought.”).
Illinois law probably applies to Medcor’s contract claim against Garcia.
Whether Illinois or California law applies to Medcor’s state-law trade secrets claim is
a thornier question. See JST Corp v. Foxconn Interconnect Tech. Ltd., 965 F.3d 571,
577 n.1 (7th Cir. 2020) (citation omitted); Vendavo, Inc. v. Long, 397 F.Supp.3d 1115,
1127 (N.D. Ill. 2019) (discussing the application of a narrow contractual choice-of-law
clause to related tort claims). It isn’t necessary to decide that issue now, however,
because Medcor brought a federal claim under the Defend Trade Secrets Act, see [81],
and so the application of the inevitable disclosure doctrine to plaintiff’s state-law
trade secrets claim isn’t outcome determinative at this stage in the case. See PepsiCo,
Inc. v. Redmond, 54 F.3d 1262, 1268 (7th Cir. 1995); Packaging Corp. of America, Inc.
v. Croner, 419 F.Supp.3d 1059, 1069 n.7 (N.D. Ill. 2020) (concluding that the Seventh
Circuit is likely to recognize the inevitable disclosure doctrine under DTSA and
gathering cases).
Breach of Contract
Medcor brings breach of contract claims against Garcia, Brown, and Patel. See
[81] at 39–42. To prove a breach of contract claim in Illinois, Medcor must show “(1)
offer and acceptance, (2) consideration, (3) definite and certain terms, (4) performance
by the plaintiff of all required conditions, (5) breach, and (6) damages.” MC Baldwin
Fin. Co. v. DiMaggio, Rosario & Veraja, LLC, 364 Ill.App.3d 6, 30 (1st Dist. 2006)
(citations omitted); see Hess v. Bresney, 784 F.3d 1154, 1158–59 (7th Cir. 2015)
(citation omitted).
Medcor alleges that defendants breached restrictive covenants in their
contracts. See [13] at 5–8; [69-1] at 13. A restrictive covenant is only valid if
reasonable, meaning that the covenant: (1) is no greater than is required for the
protection of a legitimate business interest of the employer; (2) does not impose undue
hardship on the employee; and (3) is not injurious to the public. Reliable Fire Equip.
Co. v. Arredondo, 358 Ill.Dec. 322, 326–27 (2011) (citations omitted). The extent of
the employer’s legitimate business interest may be limited by type of activity,
geographical area, and time. Id. at 325–26 (citing Restatement (Second) of Contracts
§ 188 (Am. L. Inst. 1981)). Whether a legitimate business interest exists depends on
the totality of the circumstances. Id. at 332; see Instant Tech. LLC v. DeFazio, 793
F.3d 748, 750 (7th Cir. 2015). Undue hardship is about whether a restriction
unreasonably limits an employee’s ability to work, see Mohanty v. St. John Heart
Clinic, S.C., 225 Ill.2d 52, 76–77 (2006), and covenants injure the public when they
violate public policy. See id. at 64–69.
Garcia’s and Brown’s contracts prohibited them from using or disclosing
Medcor’s trade secrets and proprietary information, competing with Medcor,
soliciting Medcor employees, and soliciting current or prospective Medcor clients. See
[69-12] at 10–18; [69-6] at 5–7; [69-10] at 4-9. Medcor has made a threshold showing
as to the enforceability of these restrictions. See [13] at 6–8. Garcia’s only argument
that the restrictions in his contract aren’t enforceable is based on California law, see
[74-1] at 15–16; [46] at 6–9, but, as discussed above, Illinois law likely applies to
Medcor’s contract claim against Garcia. For the purposes of the preliminary
injunction, Garcia has forfeited other arguments about the enforceability of the
restrictive covenants in his contract. See Cassell v. Snyders, 990 F.3d 539, 551 (7th
Cir. 2021) (indicating that arguments that aren’t raised are forfeited for the purposes
of a motion for preliminary injunction).
Brown is not represented by counsel, but Garcia and MedWay argue that the
restrictive covenants in her contract fail for lack of consideration. See [74-1] at 25.
Illinois courts carefully scrutinize the consideration supporting postemployment
restrictive covenants, and continued employment for less than three months wouldn’t
on its own be sufficient to support such restrictions. See Fifield v. Premier Dealer
Servs., Inc., 373 Ill.Dec. 379, 383 (1st Dist. 2013); Diederich Ins. Agency, LLC v.
Smith, 351 Ill.Dec. 792, 795–96 (5th Dist. 2011). But because Brown allegedly
breached her contract with Medcor while employed with the company, see [69-1], the
issue here is the enforceability of these restrictions during Brown’s employment.
Even if the consideration analysis mirrors that for post-employment restrictions,
Brown appears to have been promoted when she signed her second Medcor contract,
see [69-10], and based on the totality of circumstances there is some likelihood that
the post-employment restrictions included in Brown’s agreement were supported by
adequate consideration. See Allied Waste Servs. of N. America, LLC v. Tibble, 177
F.Supp.3d 1103, 1107–09 (N.D. Ill. 2016) (predicting that the Illinois Supreme Court
would not embrace a bright-line rule requiring two years of continued employment to
enforce a postemployment restrictive covenant, but would instead consider the
totality of the circumstances); Guaranteed Rate, Inc. v. Wilson, Case No. 20-cv-1663,
2020 WL 4736395, at *3 (N.D. Ill. Aug. 14, 2020). For the purposes of this motion,
Brown has forfeited other arguments as to the enforceability of the restrictive
covenants in her contract. See Cassell, 990 F.3d at 551.
Garcia agreed not to compete with Medcor in the six months after the end of
his employment with the company. See [69-12] at 17–18. But he incorporated
MedWay a month after he was fired, and MedWay provided COVID-19 services
similar to those offered by Medcor to a national market. See [13-1] ¶ 33; [66] at 23–
25; [81] ¶ 2; [74-3] at 131–32. Garcia also agreed not to use Medcor’s proprietary
information for the benefit of a competitor and to return all Medcor contracts and
proposals following his employment. See [69-12] at 14. Yet Garcia photographed and
retained Medcor confidential documents in order to help set up a competing company.
See [74-3] at 89–121. Finally, Garcia promised not to solicit Medcor clients or
prospective clients, see [69-12] at 16–17, but he negotiated for COVID work with
executives at two Medcor clients, CBS Sports and Shed Media. See [46-2]; [46-1]. That
these clients may have initially contacted Garcia doesn’t mean Garcia didn’t solicit
their business. See Gateway Sys., Inc. v. Chesapeake Sys. Solutions, Inc., No. 10 C
2276, 2010 WL 3714588, at *3 (N.D. Ill. Sept. 14, 2010) (citations omitted) (finding
that solicitation under Illinois law includes “any direct contact that the recipient
would understand as a solicitation for business”). Medcor has shown some likelihood
that Garcia breached the non-compete, non-disclosure, and non-solicitation clauses
in his contract.7
Brown agreed not to disclose Medcor’s trade secrets or proprietary information
except as authorized by the company, not to solicit Medcor clients for anyone except
Medcor, and not to compete with plaintiff. See [69-10] at 6–9. Medcor claims that
Brown breached her contract when she sent emails concerning proposals for new
business to Patel. See [69-1] at 6–7; [13] at 2–3. But the fact that Brown was sending
Patel (then serving Medcor clients) emails about Medcor proposals doesn’t show that
Brown was soliciting those clients or competing with Medcor. However, the
information in the emails Brown sent to Patel seems likely to be covered by the
contract’s definition of proprietary information, see [69-8]; [69-10]; [69-7]; [69-15], and
7 Medcor also argues that Garcia breached his contract by soliciting Medcor employees. See
[69-1] at 5. Garcia was prohibited from using the company’s proprietary information or trade
secrets to solicit Medcor’s employees, and plaintiff hasn’t shown that Garcia used such
information to solicit defendant Thomas or other Medcor employees. See id.; [74-3] at 180–
200. Medcor isn’t likely to succeed on this theory for its breach of contract claim.
Medcor has shown some likelihood that Brown interfered with the Medcor–CBS
relationship and tried to divert Shed Media to support Garcia and MedWay. See [70-
41] at 58–76. Medcor has shown some likelihood that Brown breached her contract’s
non-disclosure and non-compete clauses.
Medcor argues that Patel breached restrictive covenants in his contracts, see
[69-1] at 13; [13] at 5–8, but hasn’t adequately shown that Medcor was the beneficiary
of Patel’s agreements with Onsite Physician Services. See Sosa v. Onfido, Inc., 8 F.4th
631, 639 (7th Cir. 2021) (quoting Marque Medicos Farnsworth, LLC v. Liberty Mut.
Ins. Co., 427 Ill.Dec. 218 (1st Dist. 2018)) (“Illinois courts ... recognize a ‘strong
presumption against conferring contractual benefits on noncontracting third
parties.’”); see [69-13] at 9 (Patel’s contract expressly bars third-party beneficiaries).
Medcor also hasn’t explained how Patel allegedly breached his contract with the
company, see [13] at 6, or why his initial agreement with Onsite continued to govern
his conduct even after it was superseded by his second. See [69-14]; [69-13]. Plaintiff’s
general allegations are insufficient to show that Patel breached any contract. See [69-
1] at 13; [13] at 5–8.
Medcor has shown some likelihood of success on the merits of its contract
claims against Garcia and Brown, but has not made a sufficient showing against
Patel.
Trade Secrets
Medcor brings state and federal claims for trade secret misappropriation
against Garcia, MedWay, Brown, and Patel. See [81] at 47–52; [1] at 43–49.8 Under
the Defend Trade Secrets Act, 18 U.S.C. § 1836(b), information is a trade secret if (1)
the owner has taken reasonable measures to keep the information secret, and (2) the
information “derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable through proper means by,
another person who can obtain economic value from the disclosure or use of the
information.” 18 U.S.C. § 1839(3); see Life Spine, Inc. v. Aegis Spine, Inc., 8 F.4th 531,
540 (7th Cir. 2021). Whether information is a trade secret is a question of fact to be
decided based on all of the surrounding circumstances. Life Spine, 8 F.4th at 540
(quoting Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714, 723 (7th Cir.
2003)). Misappropriation happens when a person acquires a trade secret by improper
means or discloses or uses a trade secret without consent. 18 U.S.C. § 1839(5).
Improper means include “theft, bribery, misrepresentation, breach or inducement of
a breach of a duty to maintain secrecy, or espionage through electronic or other
means.” 18 U.S.C. § 1839(6).
After he was fired, Garcia took photographs of Medcor contracts and proposals.
See [69-16]; [69-17]; [69-18]; [69-19]; [69-20]; [69-21]; [69-22]; [69-23]; [69-24]; [69-25];
8 Because the analysis under Illinois law is largely identical to that under DTSA, see Vendavo,
Inc. v. Long, 397 F.Supp.3d 1115, 1128–29 n.5 (N.D. Ill. 2019); Molon Motor & Coil Corp. v.
Nidec Motor Corp., No. 16 C 03545, 2017 WL 1954531, at *2 (N.D. Ill. May 11, 2017), I address
only Medcor’s federal claims.
[74-3] at 89–121. By identifying these particular documents and distinguishing the
trade secrets allegedly included in those documents from other information found
there, see [69-1] at 3, 11–13, Medcor has described the trade secrets Garcia allegedly
took with the required specificity. See Life Spine, 8 F.4th at 540 (quoting Composite
Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1266 (7th Cir. 1992))
(“Trade secret law focuses on the ‘concrete secrets’ that the plaintiff seeks to protect,
rather than ‘broad areas of technology.’”); Vendavo, Inc. v. Long, 397 F.Supp.3d 1115,
1130 (N.D. Ill. 2019) (collecting cases).9
Medcor alleges that Garcia took (1) client information, including contact
information; (2) pricing information; (3) business strategies; and (4) marketing
strategies. [69-1] at 11. Garcia doesn’t dispute that Medcor took reasonable steps to
protect this information, see [74-1], and plaintiff has offered evidence that the
documents Garcia photographed could only be found behind password and database
protection, and viewed only by certain employees who were required to acknowledge
the confidentiality of the information. See [69-29]; [69-30]; [69-31]; [66] at 53–56.
Plaintiff likely took reasonable steps under the circumstances to protect the
information. See 18 U.S.C. § 1839(3)(A).
9 Garcia’s citations to California decisions, see [74-1] at 18–19, aren’t helpful because Medcor
has also brought a claim under DTSA. See [81]. IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d
581 (7th Cir. 2002) involved Wisconsin law, which isn’t at issue here. In contrast to the facts
of B13, Inc. v. Hamor, No. 08 CV 2384, 2011 WL 1231156 (N.D. Ill. Mar. 30, 2011) and
Lynchval Sys., Inc. v. Chicago Consult. Actuaries, Inc., No. 95 C 1490, 1998 WL 151814, *5
(N.D. Ill. Mar. 27, 1998), Medcor hasn’t merely pointed toward general categories of
information but has also identified types of protected information located in specific
documents and presented evidence about the secrecy of those documents. See [69-1].
The contracts and proposals that Garcia photographed included contact
information for key decisionmakers working for Medcor clients. See, e.g., [69-17]; [69-
18]; [69-22]. A Medcor executive testified that the company invested substantial
resources in developing and maintaining relationships with its customers, and that
the identities of key decisionmakers at Medcor clients had value because of the time
it would take for another party to identify them. See [66] at 55.10 Garcia argues that,
given the power of search engines, it’s easy to find the key decisionmakers for Medcor
clients. See [74-1] at 22. But Medcor kept the identity of its client contacts secret
using confidentiality agreements, and the fact that Garcia (having worked in the
industry) could locate key industry decisionmakers with ease doesn’t mean that the
information was readily ascertainable. Plaintiff has shown some likelihood that its
client contact information was a trade secret.11
Some of the documents that Garcia photographed included prices and fees for
Medcor services. See, e.g., [69-16] at 2; [69-19] at 7; [69-22] at 6; [69-24] at 6. Medcor’s
executive testified that the company’s pricing methodologies varied depending on
service needs and client levels, and were communicated to customers through
10 The cases relied on by defendants agree that customer information developed with
significant investments of time and resources is a trade secret. See Cutera, Inc. v. Lutronic
Aesthetics, Inc., 444 F.Supp.3d 1198, 1206 (N.D. Ill. 2020) (applying California law); RKI, Inc.
v. Grimes, 177 F.Supp.2d 859, 873 (N.D. Ill. 2001) (applying Illinois law); Chicagoland
Aviation, LLC v. Todd, No. 12cv1139, 2012 WL 5948960, at *5 (N.D. Ill. June 8, 2012)
(applying Illinois law).
11 Medcor’s categorical allegation that Garcia misappropriated other “client information,” [69-
1] at 11, doesn’t name any concrete secrets. See Composite Marine Propellers, Inc. v. Van Der
Woude, 962 F.2d 1263, 1266 (7th Cir. 1992) (citation omitted). Plaintiff hasn’t shown a
likelihood that such information was a trade secret.
confidential proposals and contracts. See [66] at 53–55.12 The record shows that a
customer for COVID testing and screening services sought multiple bids for such
services and shared pricing from competitors in an attempt to negotiate lower costs.
See [74-13]. But that other providers allowed their pricing information to be shared
doesn’t indicate anything about whether Medcor kept its pricing information secret
and derived value from that secrecy. See Rockwell Graphic Sys., Inc. v. DEV Indus.,
Inc., 925 F.2d 174, 176–77 (7th Cir. 1991)) (a limited disclosure doesn’t void trade
secret protection). While a close call, Medcor has shown some likelihood that Medcor’s
pricing information was a trade secret because it conveyed that information to
customers only in confidential documents and there was potential value (in the shape
of a market advantage) in keeping Medcor’s prices and methodologies secret. See 18
U.S.C. § 1839(3).
The contracts and proposals that Garcia photographed also contained Medcor
business plans, including COVID screening procedures and workflows. See, e.g., [69-
19] at 3–4 (describing Medcor’s COVID-19 screening procedure); [69-24] at 8–12
(describing Medcor’s testing workflow); [69-25] at 3–6 (describing the roles of Medcor
employees in an agreement for medical services). Garcia argues that the COVID
12 That Medcor took steps to ensure the secrecy of its pricing distinguishes this case from
those cited by defendants. See Trailer Leasing Co. v. Assoc. Com. Corp., No. 96 C 2305, 1996
WL 450801, at *1 (N.D. Ill. Aug. 8, 1996) (pricing wasn’t a trade secret where it was “unlikely
that [price] information is ever secret”); Carbonic Fire Extinguishers, Inc. v. Heath, 190
Ill.App.3d 948, 953–54 (2d Dist. 1989) (pricing wasn’t protectable where customers could
share price information with a competitor); Applied Indus. Materials Corp. v. Brantjes, 891
F.Supp. 432, 438 (N.D. Ill. 1994) (same). SBS Worldwide, Inc. v. Potts doesn’t disagree with
the proposition that prices disclosed only through confidential documents are protectable.
No. 13 C 6557, 2014 WL 499001, at *4 (N.D. Ill. Feb. 7, 2014).
protocols and related business plans weren’t secret because Medcor was merely
copying from publicly available public health guidance. See [74-1] at 22. But trade
secrets don’t have to be original works. They can exist “in a combination of
characteristics and components, each of which, by itself, is in the public domain,” but
the “unique combination” of which “affords a competitive advantage and is a
protectable secret.” 3M v. Pribyl, 259 F.3d 587, 595–96 (7th Cir. 2001) (citing Syntex
Opthalmics Inc. v. Tsuetaki, 701 F.2d 677, 683 (7th Cir. 1983)).13 Garcia is right that
one of Medcor’s questionnaires is similar to a CDC document. Compare [74-17]
(Medcor’s trusted entry questionnaire), with [74-18] (CDC’s facilities COVID-19
screening). But Medcor has offered evidence that other screening procedures,
workflows, and business plans included in the documents Garcia copied weren’t
widely known and has shown some likelihood that this information had value as a
trade secret. See [66] at 36–39, 88–91.14
Garcia claims that he didn’t misappropriate Medcor’s secrets because he never
used the information to solicit customers. See [74-1] at 23. But solicitation isn’t the
only way to misappropriate: a person also misappropriates when they acquire secrets
13 Defendants also argue that the information Garcia knew about Medcor’s business plans,
screening protocols, and workflows was merely general knowledge or industry expertise. See
[74-1] (citing RKI, Inc. v. Grimes, 177 F.Supp.2d 859, 873 (N.D. Ill. 2001)). But Medcor has
shown that the information was kept secret and disclosed only to employees and customers,
and wasn’t known to the general public.
14 Medcor alleges that Garcia took its marketing strategies, see [69-1] at 11, but it’s not clear
from the documents Garcia photographed that they included such information and Medcor
hasn’t identified concrete secrets related to its marketing materials. See Composite Marine
Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1266 (7th Cir. 1992). Medcor hasn’t shown
a likelihood of success that its marketing strategies were trade secrets.
by breaching a duty of secrecy. See 18 U.S.C. § 1839(6). In this case, Garcia’s contract
barred him from using the company’s protected information after his termination, see
[69-12] at 14, yet Garcia took photographs of Medcor contracts and proposals after he
was fired in order to set up a competing company. See [74-3] at 116–17. Under DTSA,
Medcor has shown some likelihood of actual misappropriation against Garcia and
MedWay. See 18 U.S.C. § 1839(5).
The Defend Trade Secrets Act authorizes courts to enjoin threatened
misappropriation, which applies when a plaintiff shows the inevitability of trade
secret disclosure. See 18 U.S.C. § 1836(b)(3); see PepsiCo, Inc. v. Redmond, 54 F.3d
1262, 1267–68 (7th Cir. 1995) (applying a similarly worded state law); Packaging
Corp. of America, Inc. v. Croner, 419 F.Supp.3d 1059, 1069 n.7 (N.D. Ill. 2020). To
determine whether disclosure is inevitable, I consider (1) the level of competition
between the former and new employer; (2) the similarity between the employee’s
former and new positions; and (3) the actions that the new employer has taken to
prevent the use or disclosure of the former employer’s trade secrets. See Inventus
Power, Inc. v. Shenzhen Ace Battery Co., Case No. 20-cv-3375, 2020 WL 3960451, at
*11 (N.D. Ill. July 13, 2020) (citation omitted). Medcor must show intent or a high
probability that Garcia will use trade secrets. See PepsiCo, 54 F.3d at 1269–70; Saban
v. Caremark Rx, L.L.C., 780 F.Supp.2d 700, 734 (N.D. Ill. 2011).
MedWay and Medcor offer COVID testing and screening services in a national
marketplace, and have directly competed over several clients. See [66] at 23–24; [81]
¶ 2; [74-3] at 131–32. As Operations Manager, Garcia directed COVID testing and
screening services for Medcor, see [69-12]; [13-1] ¶ 18, and as the only employee of
MedWay, see [74-3] at 227, occupies a similar position where Medcor’s trade secrets
could be used to provide client services or secure new clients. There’s no suggestion
that Garcia or MedWay have taken any steps to prevent the use or disclosure of
Medcor’s information. See [74-1] at 18–24. Beyond the similarity of Garcia’s positions
at Medcor and MedWay, there is also evidence that Garcia intended to use Medcor’s
information to set up his new business. See [74-3] at 116–17. Medcor has shown some
likelihood that Garcia will inevitably disclose its trade secrets, and is likely to succeed
on its DTSA claim against him and MedWay.
Medcor hasn’t pointed to any particular information that Patel or Brown
misappropriated, see [13] at 10–12; [69-1] at 11–13, and its general allegations about
the kinds of information that defendants took don’t adequately show
misappropriation by these defendants. See Life Spine, 8 F.4th at 540. Perhaps Medcor
is arguing that Brown misappropriated trade secrets by sending emails to Patel, and
that Patel violated trade secret law by receiving that information and forwarding it
to others. See [69-7]; [69-8]; [69-15]. But Medcor doesn’t spell out these allegations,
see [69-1], and it’s not clear that the emails sent by Brown included trade secret
information, that she wasn’t authorized to send that information to Patel, or that
Patel disclosed the information to anyone else. Medcor isn’t likely to succeed on its
trade secret claims against Brown and Patel.
Tortious Interference with Contract
To prove a claim of tortious interference, Medcor must show “(1) a valid
contract, (2) defendant’s knowledge of the contract, (3) defendant’s intentional and
unjustified inducement of a breach of the contract, (4) a subsequent breach of contract
caused by defendant’s wrongful conduct, and (5) damages.” Webb v. Frawley, 906 F.3d
569, 577 (7th Cir. 2018) (citing Healy v. Metro. Pier & Exposition Auth., 804 F.3d 836,
842 (7th Cir. 2015)).
Medcor argues that Garcia knew of restrictive covenants in Brown’s
employment agreement and encouraged her to breach her contract by using protected
information to solicit Medcor clients and divert business away from Medcor. See [13]
at 8–9.15 As discussed, Medcor has shown some likelihood that the restrictive
covenants in Brown’s contract were enforceable and that Brown breached her
agreement’s non-disclosure and non-compete clauses. Brown appears to have been
promoted into Garcia’s old job, see [69-10], and a message from Brown to Garcia
indicates that Garcia at one time had a copy of Brown’s contract. See [70-41] at 66.16
Garcia asked Brown to tell a CBS executive about problems with Medcor’s services
in an attempt to end the CBS–Medcor relationship, and Brown did as Garcia
requested. See id. at 58–59. Medcor has shown some likelihood of success on its
tortious interference claim against Garcia.
15 Medcor also argues that Garcia tortiously induced Patel to breach his agreements, see [13]
at 9, but that allegation fails because Medcor hasn’t shown that Patel breached any contract
or that a valid contract existed between Medcor and Patel. See Webb v. Frawley, 906 F.3d
569, 577 (7th Cir. 2018).
16 That Brown and Garcia were actively discussing Brown joining MedWay, see [70-41], also
supports the proposition that Garcia knew the details of Brown’s contract.
Unfair Competition and Trademark Infringement
Medcor brings claims for federal and state-law unfair competition and
trademark infringement against MedWay and Garcia. [81] at 53–60. To prevail on
these claims, Medcor must show that its mark is protectable and that defendants’ use
of “MedWay” was likely to lead to confusion among consumers. See AutoZone, Inc. v.
Strick, 543 F.3d 923, 929 (7th Cir. 2008) (citing CAE, Inc. v. Clean Air Eng’g, Inc.,
267 F.3d 660, 673–74 (7th Cir. 2001)). Medcor has registered two trademarks, see [13]
at 13, and defendants don’t dispute that the Medcor marks are protectable. See [46]
at 14. The issue here is the likelihood of confusion in the market.
Whether a mark is likely to confuse turns on a seven-factor test: (1) the
similarity between the marks in appearance and suggestion; (2) the similarity of the
products; (3) the area and manner of concurrent use; (4) the degree and care likely to
be exercised by consumers; (5) the strength of the plaintiff’s mark; (6) any actual
confusion; and (7) the intent of the defendant to “palm off” his product as that of
another. AutoZone, 543 F.3d at 929 (citing Packman v. Chicago Tribune Co., 267 F.3d
628, 642 (7th Cir. 2001)). No factor is dispositive, but the similarity of the marks,
defendant’s intent, and actual confusion are “particularly important.” Id.
That Medcor and MedWay both begin with “Med” isn’t enough to show
similarity. See Estate of P.D. Beckwith, Inc. v. Comm’r of Patents, 252 U.S. 538, 545–
46 (1920) (similarity should be evaluated based on the whole of the marks); Sullivan
v. CBS Corp., 385 F.3d 772, 777 (7th Cir. 2004) (similarity should be judged in light
of marketplace realities). While MedWay and Medcor share a prefix, “med” is a
common term in the health care industry, and the words themselves are not so similar
as to lead to consumer confusion.
Garcia’s webinar appearance where he claimed credit for Medcor’s experience
and achievements is evidence that Garcia intended to palm off his new business as
Medcor. See [70-5]; [74-3] at 224–231. Medcor and MedWay provide similar COVID
testing and screening services in a national marketplace. See [66] at 23–24; [81] ¶ 2;
[74-3] at 131–32. But Medcor hasn’t offered any evidence about the strength of its
marks. See [13] at 13. That a lab believed Garcia still worked for Medcor after he had
been terminated doesn’t indicate actual confusion in the market, either. See [13-1] at
17.17 And given the severity of risks associated with COVID-19, it seems likely that
consumers are careful in choosing a vendor, and would be unlikely to confuse the two
businesses. See CAE, Inc., 267 F.3d at 683 (consumers are likely to exercise care when
selecting expensive services that aren’t widely accessible). Medcor has some evidence
to support Garcia’s intent to confuse consumers, but plaintiff hasn’t shown that it is
likely to succeed on its unfair competition and trademark claims.
Duty of Loyalty
Agents owe duties of loyalty to their principals not to exploit their positions
within a corporation for personal gain or hinder the corporation’s ability to conduct
business. See Foodcomm Intern. v. Barry, 328 F.3d 300, 303 (7th Cir. 2003) (citing
17 At least two consumers of COVID testing and screening services knew the difference
between MedWay and Medcor, but given that these consumers were familiar with Garcia
before the formation of MedWay, this evidence of an absence of actual confusion in the market
isn’t persuasive. See [46-1] ¶ 24; [46-2] ¶ 18.
E.J. McKernan Co. v. Gregory, 252 Ill.App.3d 514 (2d Dist. 1993); Veco Corp. v.
Babcock, 243 Ill.App.3d 153 (1st Dist. 1993)).
Medcor argues that Garcia breached his duty of loyalty because he didn’t tell
Medcor that he was forming a rival company after he was terminated but before
signing an exit agreement. See [13-1] at 9–10. Medcor also alleges that Garcia used
protected information to develop MedWay and solicited Medcor employees to join
MedWay. Id. While it is likely that Garcia used Medcor’s information to develop
MedWay, Medcor hasn’t shown that Garcia’s duty of loyalty survived his termination,
or, alternatively, that Garcia’s allegedly breaching conduct occurred before he was
fired. See Prudential Ins. Co. of America v. Sempetrean, 171 Ill.App.3d 810, 816 (1st
Dist. 1988) (“As a general rule, the principles of good faith, loyalty and personal
interest of an agent are not applicable following termination of an agency
relationship.”).
Brown was still employed by Medcor when she hindered Medcor’s ability to do
business with CBS by instructing CBS not to sign contracts with Medcor, see [70-41]
at 58–76, and evidence also suggests that she tried to divert Medcor business to
Garcia and MedWay. See id. at 58–76, 83; [69-7]; [69-15]. Brown likely owed a duty
of loyalty to Medcor, see Foodcomm Int’l, 328 F.3d at 304 (citations omitted), and
plaintiff is likely to succeed on its duty of loyalty claim against her.18
18 Medcor didn’t bring a duty of loyalty claim against Patel in either its original, see [1] at 57–
58, or amended complaint, see [81] at 60–61, but did mention such a claim in its initial brief
supporting the motion for a preliminary injunction. See [13] at 9–10. Because the claim isn’t
pending and Medcor hasn’t shown why Patel owed a duty of loyalty to Medcor given his
B. Irreparable Harm
Medcor must show that it will suffer irreparable injury without a preliminary
injunction. See Life Spine, Inc. v. Aegis Spine, Inc., 8 F.4th 531, 545 (7th Cir. 2021)
(quoting Foodcomm Intern. v. Barry, 328 F.3d 300, 304 (7th Cir. 2003)). Harm is
irreparable if legal remedies are “seriously deficient as compared to the harm
suffered.” Id. Medcor alleges that its harms include (1) loss of opportunities to provide
services to customers; (2) damage to relationships with existing and potential
customers; (3) loss of revenue; (4) loss of Medcor’s competitive edge in marketing; and
(5) price erosion and loss of market share. See [69-1] at 10.
Medcor’s alleged losses associated with price erosion and loss of market share
aren’t irreparable because those losses are usually calculable, see Life Spine, 8 F.4th
at 546, and Medcor hasn’t shown why they aren’t in this case. Medcor wants to rely
on a presumption of irreparable harm associated with trade secrets violations, see
[69-1] at 10, but such harm is no longer presumed. See Ebay Inc. v. MercExchange,
L.L.C., 547 U.S. 388, 393 (2006); Flava Works, Inc. v. Gunter, 689 F.3d 754, 755 (7th
Cir. 2012).
Loss of customer relationships, loss of revenue, and harm to customer goodwill
can all be irreparable injuries. See Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d
808, 813 (7th Cir. 2002) (consumer goodwill); Duct-O-Wire Co. v. U.S. Crane, Inc., 31
F.3d 506, 509–10 (7th Cir. 1994) (sales and opportunities to maintain and develop
contractual relationship with Onsite, see [69-13], no injunction against Patel is appropriate
on a duty of loyalty theory.
customer relationships); Stuller, Inc. v. Steak N Shake Enters., Inc., 695 F.3d 676,
680 (7th Cir. 2012). Whether lost customers and contracts can be cured by legal
remedies depends on whether those losses can be identified. See Life Spine, 8 F.4th
at 546.
Medcor lost the CBS Sports account but didn’t lose Carr-Hughes or Shed as a
result of defendants’ conduct. While the evidence of customer loss is mixed, Medcor
isn’t required to make a “concrete demonstration” of its customer and contract losses,
and “it is precisely the difficulty of pinning down what business has been or will be
lost that makes an injury ‘irreparable.’” Hess Newmark Owens Wolf, Inc. v. Owens,
415 F.3d 630, 632 (7th Cir. 2005) (citing Hilton v. Braunskill, 481 U.S. 770, 776
(1987)).19 Because Medcor has shown some likelihood that its customer losses may be
difficult to identify, its associated revenue losses are at least partly irreparable. See
Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 386 (7th Cir. 1984) (losses are
irreparable where they are “very difficult” to calculate). More importantly, there is a
risk that Garcia could use Medcor’s trade secrets to cause further losses to plaintiff.
Medcor has shown irreparable injury through lost customers, potential customers,
and revenue.
Medcor has also shown that defendants damaged its reputation and customer
goodwill. Messages between Garcia and Brown indicate that they were interfering
19 Medcor has shown some likelihood that its customer losses were caused by defendants’
conduct. See Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F.Supp.3d 888, 903 (N.D. Ill. 2019);
Mullis v. Arco Petroleum Corp., 502 F.2d 290, 293 (7th Cir. 1974). Chicagoland Aviation, LLC
v. Todd is distinguishable because the plaintiff in that case admitted that his customer losses
could be quantified. No. 12cv1139, 2012 WL 5948960, at *6 (N.D. Ill. June 8, 2012).
with the Medcor-CBS relationship, and it seems likely that their actions caused harm
to Medcor’s reputation with key executives at CBS. See [70-41]. Garcia
misappropriated Medcor’s trade secrets to help build his business, and could further
damage Medcor’s relationships with current and prospective customers through the
use of that confidential information. Medcor’s reputational harms are irreparable
because they are difficult to measure in monetary terms, see Stuller, Inc., 695 F.3d at
680, and plaintiff’s harms associated with the use of its trade secrets can’t easily be
remedied by damages because they are difficult to prove and quantify. See Turnell v.
CentiMark Corp., 796 F.3d 656, 666 (7th Cir. 2015).
C. Balance of Equities and Public Interest
The injunction Medcor wants would restrain defendants from violating their
agreements with Medcor; prevent them from conducting business with clients whom
they solicited or communicated with in breach of their agreements; prevent them
from using Medcor’s proprietary information; require defendants to return Medcor’s
protected information; require them to stop using the MedWay mark; and require
them to preserve all documents relevant to the case. See [12].
Medcor has made a strong showing on the merits for its breach of contract
claim against Garcia, and has met its burden as to the tortious interference and trade
secret claims against him and the contract and duty of loyalty claims against
Brown.20 Plaintiff’s showing of irreparable harm is less persuasive. There’s evidence
20 Medcor hasn’t shown that it is likely to succeed on any of its claims against Patel, and isn’t
entitled to an injunction against him. There’s no evidence to suggest that Brown is causing
continued harm to Medcor, and so there is no reason to alter the status quo by issuing an
that defendants didn’t cause any non-quantifiable loss of business to the company
(since CBS Sports is an identifiable loss), and it seems likely that most of Medcor’s
alleged losses can be remedied through damages. See e360 Insight, Inc. v. Spamhaus
Project, 658 F.3d 637, 648 n.8 (7th Cir. 2011) (lost profits don’t need to be proven with
precision). Given a limited customer pool for COVID testing and screening services
and the fact that Medcor could estimate customer needs and price tolerances, revenue
and customer losses aren’t as irreparable in this case as in others, and caution is
warranted based on the sliding scale of harms. But plaintiff has shown some
irreparable harm: Medcor may have lost customers and associated revenue that can’t
be identified, and without an injunction there is a likelihood that it will suffer
additional losses of customers and damage to its reputation through Garcia’s and
MedWay’s use of its trade secrets.
Garcia argues that granting the injunction will necessarily force MedWay to
permanently fold and result in personal financial losses, see [74-1] at 26, but an
injunction centered on Medcor’s trade secrets won’t necessarily do that. Any harm to
Garcia caused by requiring him to honor his obligations to avoid using Medcor’s
information will be minimal, and would derive entirely from his breach of contract
and misappropriation of trade secrets. The harm to Garcia and MedWay is self-
inflicted, and the public interest favors the enforcement of contracts and the
injunction against her, either. Because Medcor isn’t likely to succeed on its unfair competition
and trademark infringement claims, requiring defendants to cease using the MedWay mark
isn’t appropriate.
protection of trade secrets. The balance favors an injunction against MedWay and
Garcia.
Enjoining Garcia and MedWay from conducting business with Medcor clients
obtained in violation of Garcia’s contract alters the status quo, is not necessary to
remedy the immediate threat of harm posed by Garcia’s and MedWay’s potential use
of trade secrets, and would go beyond the parties’ restrictive covenant.21 Garcia
agreed not to compete with Medcor for six months after the end of his employment at
Medcor, the contract does not provide for the extension of that non-compete period in
the event of a breach; the parties bargained for Garcia’s noncompetition from
December to May 2021. See [69-12] at 17–18; Citadel Inv. Grp., LLC v. Teza Techs.
LLC, 398 Ill.App.3d 724, 736 (3d Dist. 2010) (citing Stenstrom Petroleum Serv. Grp.,
Inc. v. Mesch, 375 Ill.App.3d 1077 (2d Dist. 2007)). Medcor is free to compete for Shed
Media, and so plaintiff’s harm without an order disrupting defendants’ ongoing
business with Shed is minimal. Requiring MedWay to stop doing business with Shed
would likely cause substantial harm to MedWay and Garcia. See [74-3] at 140–41
(Shed Media is MedWay’s largest client). The potential harm to Shed—which would
be forced to seek COVID testing and screening services elsewhere at a moment when
they are particularly important—also weighs against this form of relief.22
21 An injunction forcing Garcia and MedWay to stop working with its existing clients would
be a mandatory injunction—one requiring an affirmative act—and such injunctions are
cautiously viewed and sparingly issued. See Mays v. Dart, 974 F.3d 810, 818 (7th Cir. 2020)
(citations omitted).
22 Requiring MedWay and Garcia to preserve documents relevant to the case duplicates
existing discovery obligations, see Fed. R. Civ. P. 26, and given Rule 37, the extraordinary
remedy of a preliminary injunction is not necessary to ensure compliance.
Rule 65(c) requires the movant give security in an amount that the court
considers proper to pay the costs and damages sustained by any party found to have
been wrongfully enjoined. If wrongfully enjoined, Garcia and MedWay will have
incurred costs in identifying and returning Medcor’s trade secrets, and may lose out
on some customers for events in the coming months. Security is appropriate, and
Medcor shall post $5,000 with the Clerk of Court to secure this injunction.??
IV. Conclusion
Plaintiffs motion for a temporary restraining order and preliminary
injunction, [12], is granted in part, denied in part.
ENTER: haA CS
Manish 8. Shah
United States District Judge
Date: January 13, 2022
23 The cost of a wrongful injunction here is minimal because the injunction merely orders
Garcia and MedWay to not use or possess information they are not entitled to have. There
may be some cost incurred in complying and that value is sufficient to secure the injunction.
32