Wednesday, February 24, 2010

Mintel Case Addresses Breadth of Non-Compete, Equitable Extension Remedy (Mintel Int'l v. Neergheen)

The litigation saga involving Mintel International and Meesham Neergheen has finally concluded. The case reads as a primer for modern-day unfair competition litigation and in the process of demonstrating how difficult it can be to obtain meaningful recovery under both the Trade Secrets Act and the Computer Fraud and Abuse Act, the judgment entered by Judge Dow highlighted a couple of important issues under non-compete law.

First, the issue of reasonableness. By now, most people are aware that non-competes are judged under an overarching rule of reason. Geography is less important now than it used to be, particularly for services businesses like Mintel. But the type of activity that is off-limits under a contract generally yields some interesting rulings.

In Neergheen, the court refused to prohibit the defendant from working for a competitor during the non-compete period and instead limited his activities more narrowly to what Neergheen and his new employer agreed upon when he was hired: he was barred from working with customers he formerly had contact with at Mintel and could not work in the consumer product goods or retail sectors at his new company. Mintel had the rather obvious problem to overcome that it could not prove it lost clients as a result of Neergheen's post-employment activity.

The court also extended the non-compete obligation under the equitable tolling (or equitable extension) doctrine. This issue has not been developed particularly well by Illinois courts, though a 2007 decision from the Second Appellate District would seem to suggest that the remedy is only available if provided for by contract. Judge Dow did not cite this case in approving an extender remedy for Mintel.


Court: United States District Court for the Northern District of Illinois
Opinion Date: 1/12/10
Cite: Mintel Int'l Group, Ltd. v. Neergheen, 2010 U.S. Dist. LEXIS 2323 (N.D. Ill. Jan. 12, 2010)
Favors: Employer
Law: Illinois

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