PepsiCo, Inc. v. Redmond

In PepsiCo, Inc. v. Redmond (7th Cir. 1995) 54 F.3d 1262, PepsiCo sought to enjoin its former employee, William Redmond, from working for a competitor, the Quaker Oats Company. PepsiCo and Quaker Oats were fierce competitors, particularly in "sports drinks" and "new age drinks." (PepsiCo, supra, 54 F.3d at pp. 1263-1264.) Redmond's high position at PepsiCo gave him access to its trade secrets regarding these products, including strategic plans, product innovations, "pricing architecture," selling and delivery innovations, and marketing " 'attack plans.' " (Id. at pp. 1264-1265.) To protect these trade secrets, PepsiCo had Redmond sign a confidentiality agreement. Quaker Oats courted Redmond, and he ultimately accepted a high-level position in that company. (Id. at p. 1264.) When Redmond resigned from PepsiCo, it immediately sought and obtained an injunction preventing him from assuming his duties at Quaker Oats. (Id. at p. 1265.) PepsiCo did not contend Quaker Oats actually stole trade secrets, but asserted Redmond "cannot help but rely on PepsiCo's trade secrets as he helps plot Quaker Oats' new course." (PepsiCo, supra, 54 F.3d at p. 1270.) The Seventh Circuit Court of Appeals agreed and applied the Illinois Trade Secrets Act to affirm an injunction preventing Redmond from working for Quaker Oats. (Id. at pp. 1270-1271.) The Seventh Circuit first concluded that Illinois law permits a court to enjoin employment based upon inevitable disclosure of trade secrets. (Id. at p. 1269.) The Seventh Circuit then agreed with the district court finding that "unless Redmond possessed an uncanny ability to compartmentalize information, he would necessarily be making decisions about Quaker Oats' products by relying on his knowledge of PepsiCo's trade secrets." (Ibid.) Such inevitability of disclosure, coupled with Redmond's and Quaker Oats' "lack of candor on their part and proof of their willingness to misuse PepsiCo's trade secrets," led the Seventh Circuit to affirm the injunction barring Redmond from working for Quaker Oats. (Id. at pp. 1270-1271.)