Saturday, November 10, 2012

Supreme Court of Illinois Recognizes Intrusion Upon Seclusion Tort in Non-Compete Investigation

Non-lawyers would be surprised at the type of feelings and emotions that run through competition cases. One only need to read Steve Jobs' biography to get a sense of how raw his feelings were on the upcoming smart phone patent wars he did not get a chance to see.

Non-compete cases are much the same way. Employers feel ex-employees are disloyal. Ex-employees feel entitled to do what they want. Suspicion and speculation abound. And, as a lawyer, I have always been amazed at how personal the lawyers take most cases.

Frequently (though not often), employers overstep their bounds in investigating a non-compete breach. It is hardly uncommon for companies to hire investigators to look into what an ex-employee is doing out in the field for her new company. But sometimes those investigations can go off-course. Real life, after all, is not an episode of The Good Wife.

The Supreme Court of Illinois in Lawlor v. North American Corp. recently recognized the tort of intrusion upon seclusion in the context of a non-compete investigation gone south. The tort is a branch of the invasion of privacy claim and is fairly flexible in what types of facts can give rise to the claim. It essentially provides for tort liability when one party intentionally interferes with another's private affairs, such as by examining bank account information or opening personal mail.

The Court had never recognized the cause of action until Lawlor. The case arose when North American's outside counsel retained a private investigation firm to investigate whether Kathleen Lawlor was improperly competing following her departure from North American. The firm obtained Lawlor's phone records to examine whether she was talking to competitors. Lawlor sued for the tort of intrusion upon seclusion. North American defended the case on the grounds that there was no principal-agent relationship between it and the investigation firm. Unfortunately for North American, the Court determined sufficient grounds existed for the jury to find that North American was intimately tied into what the private eye firm was doing.

The case is emblematic of the type of emotions that can run high in non-compete cases. Precisely because facts concerning competition are intended to be hidden, a company often resorts to creative means to find out what is happening in the field. Though not all pretexting may be illegal or tortious, a company must determine which tactics are vigilant and which are overzealous. And it is the job of outside counsel to ensure that the company is taking reasonable, yet appropriate and measured, steps to triage what happened.

A copy of Lawlor is contained below.


Court: Supreme Court of Illinois
Opinion Date: 10/18/12
Cite: Lawlor v. North American Corp. of Illinois, 2012 IL 112530
Favors: Employee
Law: Illinois

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