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Foodcomm International v. Barry

United States Court of Appeals for the Seventh Circuit
328 F.3d 300 (2003)


Patrick Barry and Christopher Leacy (defendants) were senior sales representatives for Foodcomm International (plaintiff), an importer of Australian beef. Although not Foodcomm executives, Barry and Leacy were two of Foodcomm’s highest paid employees, exclusively overseeing Foodcomm’s dealings with Empire Beef. In 2001, Empire and Foodcomm began talks to redistribute market risk between the two companies. After negotiations broke down, Leacy told Foodcomm he would smooth things over with Empire. At that point, Leacy learned that the relationship between Foodcomm and Empire could not be rehabilitated and that Empire would cease conducting business with Foodcomm. Leacy did not inform Foodcomm of this development. During this time, Barry and Leacy secretly prepared a business plan, using Foodcomm computers, for a new company, Outback Imports, which Barry and Leacy would operate to import Australian beef for Empire. Barry and Leacy did not tell Foodcomm about the proposed plans to work with Empire, and Leacy led Foodcomm to believe he was still trying to smooth things over with Empire on Foodcomm’s behalf. In 2002, Outback began operations. Foodcomm subsequently brought suit seeking a preliminary injunction enjoining Barry and Leacy from continued employment and operations with Empire and Outback. The district court found that Barry and Leacy had breached their fiduciary duties to Foodcomm, and granted the injunction. Barry and Leacy appealed.

Rule of Law


Holding and Reasoning (Williams, J.)

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