Outsource International, Inc. v. Barton

George Barton (defendant) worked as a labor-staffing consultant for L.M. Investors, Inc. (L.M.). Upon beginning employment, Barton executed an employment agreement that contained a noncompete provision. The provision stated that when Barton’s employment ended, he agreed that for one year, he would not (1) solicit customers; (2) disclose customer information or business practices; or (3) own, operate, or be employed by a similar business within 25 miles. L.M. was acquired by Outsource International, Inc. (Outsource) (plaintiff), a company that similarly provided temporary-staffing services and relied on its detailed employee records and extensive customer relations to give it an industry advantage. Barton became the staffing consultant for four Outsource offices in Illinois. However, Barton resigned shortly after the acquisition and immediately opened his own staffing company, Barton’s Staffing Solutions, Inc. (BSSI) (defendant). BSSI was located only 12 miles from one of Outsource’s offices, and Barton hired other former Outsource employees. Within weeks, 12 customers who worked with Barton at Outsource moved over to BSSI. Outsource sued Barton and BSSI for breach of the noncompete provision in Barton’s employment agreement. The district court granted a preliminary injunction against Barton and BSSI. Barton and BSSI appealed, arguing that the noncompete provision was unenforceable and the preliminary injunction was therefore improper.