Employees Holding Key Positions Formed a Competing Business and Solicit Employer's Customers 18 Months Before Resigning
Was it Right for the Employees Holding key Positions Within a Company to Form a Competing Business and Solicit the Company's Customers 18 Months Before Resigning ?
In McRand, Inc. v. Beelen, 138 Ill. App. 3d 1045, 1050-51, 486 N.E.2d 1306, 93 Ill. Dec. 471 (1985), the court found this first factor favored the employer because the defendant employees held key positions within the company and had intimate knowledge of the customers' needs, buying habits, future plans, and previously rejected or accepted proposals.
That knowledge allowed them to offer a full range of services to their customers. McRand, 138 Ill. App. 3d at 1052-53.
The court said, "Employee's extensive and specific knowledge of customers is unnecessary in a business where the customers are transitory." McRand, 138 Ill. App. 3d at 1053.
In McRand, relied on heavily by Penguin Foods, a protectible business interest was found.
But McRand had only five major accounts.
The business involved maintaining long-standing customers in designing and coordinating management incentive award programs for major corporations or businesses.
The defendant employees had formed a competing business and solicited McRand customers 18 months before resigning.
Personal contact with customers was the controlling fact in McRand:
"The extent of McRand's knowledge of its clients is closely related to the factor of personal customer contact by its employees." McRand, 138 Ill. App. 3d at 1052.