Springfield Rare Coin Galleries, Inc. v. Mileham

Springfield Rare Coin Galleries, Inc. (SRCG) (plaintiff) was in the business of dealing rare coins and precious metals. In 1987, SRCG’s president, James Hausman, hired Steve Mileham (defendant). Mileham had previously worked for his father’s coin business, which was one of SRCG’s competitors. In the industry, SRCG’s customers commonly also did business with SRCG’s competitors. Concerned that Mileham would learn confidential information and return to work for his father’s business, Hausman required Mileham to sign a restrictive covenant prohibiting Mileham from competing with SRCG in Sangamon County for two years after termination of employment. As part of his training, Mileham attended a seminar about counterfeit coins and learned general techniques of the trade from Hausman. Hausman also provided Mileham with handwritten notes indicating the financial reliability of certain SRCG customers, which Mileham did not use. Mileham worked as a middleman, purchasing goods from smaller dealers at low prices and selling the goods to larger dealers at higher prices. Hausman introduced Mileham to some dealers, but Mileham found other dealers through local telephone directories and through word of mouth. In January 1989, Mileham’s employment was terminated. Mileham continued to work as a middleman in Sangamon County. SRCG sued Mileham for breaching the restrictive covenant. The trial court found that the restrictive covenant was not enforceable because Mileham had not obtained confidential information and because SRCG did not have a near-permanent relationship with its customers. Both SRCG and Mileham appealed.