You are on page 1of 10

E-FILED

Transaction ID: 3-17-0803
File Date: 5/8/2018 11:35 AM
Barbara Trumbo, Clerk of the Court
APPELLATE COURT 3RD DISTRICT

No. 3-17-0803

IN THE APPELLATE COURT OF ILLINOIS
THIRD JUDICIAL DISTRICT

Pam's Academy of Dance/Forte Arts Appeal from the Circuit Court of the
Center, Thirteenth Judicial Circuit, Grundy
County, Illinois
Plaintiff-Appellee,
Case No. 16-LM-155
v.

Circuit Judge: Sheldon Sobel

Callie Marik, Appeal from Order dated June 28, 2017
Certified Questions granted November
Defendant-Appellant. 8, 2017

Reply Brief of Defendant-Appellant

Kenneth J. Vanko
Emily L. Langhenry
Clingen Callow & McLean, LLC
2300 Cabot Drive, Suite 500
Lisle, Illinois 60532
(630) 871-2600
vanko@ccmlawyer.com
langhenry@ccmlawyer.com

Counsel for Defendant-Appellant

ORAL ARGUMENT REQUESTED
ARGUMENT

This appeal is about three words: the phrase “not less than.” And in particular, this

appeal concerns the meaning of that phrase when figuring out how long a post-

employment restrictive covenant lasts.

Pam’s Academy of Dance/Forte Arts Center (“Pam’s Academy”) interprets the

phrase “not less than” in a way that flouts accepted contract construction rules. What’s

more, Pam’s Academy relies on inapplicable or poorly reasoned out-of-state case law to

defend the uncertain temporal limits pervading the Non-Disclosure Agreement and

Restrictive Covenant (“Agreement”) that its former employee, Callie Marik, signed.

Uncertainty over the breadth of employment restrictive covenants invokes a number

of crucial interpretive principles. Courts abhor restraints of trade and carefully

scrutinize non-compete arrangements. Prairie Eye Center, Ltd. v. Butler, 305 Ill. App. 3d

442, 445 (4th Dist. 1999). Employees like Marik do not negotiate agreements like this

and have little (or no) chance to fix drafting problems. Jefco Laboratories, Inc. v. Carroo,

136 Ill. App. 3d 793, 800 (1st Dist. 1985). And employers cannot benefit from ambiguities

they themselves create. Marwaha v. Woodridge Clinic, S.C., 339 Ill. App. 3d 291, 293 (2d

Dist. 2003). Nothing about these principles is remotely controversial. Pam’s Academy

does not question them. Nor, for that matter, does it address them.

Yet Pam’s Academy wants leniency. That is, it seeks to have courts look past core

principles and interpret the Agreement so as to absolve a fundamental drafting

problem. The parties at least now agree on one rule: employment-based restrictive

covenants lacking a time limit are not enforceable. (Appellee’s Brief, at p. 8). That boils

1
down the Court’s analysis to a simple legal question: is a restrictive covenant that lasts

for “not less than” a certain number of years temporally limited at all?

Like the circuit court, Pam’s Academy says that “not less than” five or three years

just means five or three years. To do so, it first ascribes three potentially different

meanings to the phrase “not less than,” an exercise that itself defeats the argument that

the phrase is “clearly” unambiguous. (Appellee’s Brief, at p. 1). Pam’s Academy then

settles on one of these meanings―that the phrase “establishes a termination point in the

event that a prior term sets a starting point”―to construe the Agreement’s time limit.

(Appellee’s Brief, at pp. 3, 4).

The problem with this approach is simple: the interpretation is irreconcilable with

Illinois law covering non-compete contracts. By analyzing the Agreement the way it

does, Pam’s Academy has tried to fit this case into the analysis from Robinwood, Inc. v.

Baker, 425 S.E.2d 353 (Ga. Ct. App. 1992). Pam’s Academy has located a smattering of

non-compete cases from other states that addressed the “not less than” language found

in the Agreement here. (Appellee’s Brief, at pp. 5-7). But Baker is the only one to engage

in some analysis to support its holding. There, the court applied the meaning described

in the preceding paragraph and held that a non-compete term of “not less than two

years” meant two years. Id. at 356. Citing no cases, the Georgia Court of Appeals called

this construction a “common vernacular method.” Id.

To be sure, it was not “common.” That conclusion is reinforced by Baker’s lack of

citation to even one similar case. In fact, nowhere does the majority opinion apply any

basic interpretive rule to justify its holding. And it certainly did not invoke the

2
cautionary rules that Illinois courts use when evaluating restraints on trade. For its part

in assessing the “not less than two years” language, the dissent in Baker opposed the

majority’s interpretation of “not less than,” stating that the court “resort[ed] to a less

than commonly accepted ‘vernacular’ phrase interpretation.” Id. at 357.

Baker also has serious limitations because the defendant there admitted in her answer

that “not less than two years” meant two years. Id. at 355-56. Why she did this isn’t

clear, but she did. And that point was a featured part of the majority’s analysis. Id. at

355. Marik has made no such judicial admission. One vote on the Georgia Court of

Appeals should not provide this Court with any comfort that the majority’s analysis, or

the circuit court’s ruling below, aligns with Illinois law.

Pam’s Academy tries to prop up its position by looking beyond Baker to other out-

of-state decisions. It first returns to Georgia and examines Bennett v. Georgia Indus.

Catering Co., 149 S.E.2d 81 (Ga. 1966). That case (which, for reasons unknown, Baker

never cited) also involved an employee’s restrictive covenant that lasted for “not less

than one year.” Id. at 83. The Supreme Court of Georgia offered no case authority

showing why its conclusion―that “not less than” one year meant one year―was

consistent with contract interpretation rules that guide this Court’s analysis.

After its discussion of the two Georgia cases, Pam’s Academy examines the Texas

Court of Appeals’ decision in H.H. Chandler v. Mastercraft Dental Corp. of Texas Inc., 739

S.W.2d 460 (Tex. Ct. App. 1987). That case involved a covenant ancillary to a sale of

business, which lasted for “not less than five (5) years.” Id. at 462. But in Illinois, sale-of-

business covenants are encouraged, not disfavored. Courts, in fact, ascribe great

3
importance to this distinction. Decker, Berta and Co., Ltd. v. Berta, 225 Ill. App. 3d 24, 28-

32 (4th Dist. 1992).

Negotiated agreements not to compete, which parties sign in connection with the

sale of a business, protect the sanctity of acquired goodwill. By contrast, employees

bound to non-competes lack bargaining power, necessitating a strong showing of what

it is the employer is trying to protect from unfair competition. Id. at 28. H.H. Chandler

reflects courts’ uniform endorsement of sale-of-business non-competes and their

hesitation at undermining a negotiated business transaction, even if that transaction has

some unusual contractual language. The decision has no persuasive force when

evaluating an adhesive, disfavored contract like the Agreement Marik signed with

Pam’s Academy.

Lastly, Pam’s Academy looks to Florida case law, Vela v. Kendall, 905 So.2d 1033 (Fla.

Dist. Ct. App. 2005), where the appellate court partially affirmed an injunction based on

a non-compete clause that lasted for “no less than two years from the date of

termination.” Id. at 1034. Nowhere did the court evaluate the meaning of this phrase or

its reasonableness under Florida law. And even more importantly, Florida’s non-

compete statute breaks sharply from Illinois common law, which undermines Vela as

even an authoritative case. That is, the relevant Florida statute instructs that a “court

shall not employ any rule of contract construction that requires the court to construe a

restrictive covenant narrowly, against the restraint, or against the drafter of the

contract.” FLA. STAT. § 542.335(h) (2017). Illinois law is the exact opposite. (Appellant’s

Brief, at pp. 9-10).

4
Outside the realm of non-compete agreements, Pam’s Academy visits the decision in

Latham v. Village of Wilmette, 168 Ill. 153 (1897). That case involved the interpretation of a

municipal ordinance that repeatedly used the term “not less than” when describing

certain measurements of street improvements. But Latham goes only so far as its facts

and does little to support Pam’s Academy’s contractual interpretation here.

The Court in Latham described unrebutted evidence showing the actual custom-and-

usage meaning that civil engineers applied to the specific measurements reflected in the

challenged municipal ordinance. Id. at 158. By contrast, Pam’s Academy may not offer

any expert legal opinion on the meaning of the term “not less than” in restrictive

covenants like the Agreement. See Todd W. Musburger, Ltd. v. Meier, 394 Ill. App. 3d 781,

800 (1st Dist. 2009) (stating that “expert testimony as to legal conclusions that will

determine the outcome of the case is inadmissible”) (quoting Good Shepherd Manor

Foundation, Inc. v. City of Momence, 323 F.3d 557, 564 (7th Cir. 2003)).

After canvassing these decisions, Pam’s Academy’s brief then goes beyond the

certified questions. That is, in Part II, Pam’s Academy claims the Agreement’s restrictive

covenants are enforceable in the abstract, suggesting that it can dispense with

supporting evidence altogether. (Appellee’s Brief, at p. 8). The scope of a reviewing

court’s examination in an interlocutory appeal submitted under Supreme Court Rule 308

is “strictly limited to the question certified by the trial court.” Lanning v. Morris Mobile

Meals, Inc., 308 Ill. App. 3d 490, 493-94 (3d Dist. 1999). The circuit court here did not

certify for review the question of whether three- or five-year restrictive covenants are

reasonable under the allegations. (A2-3; R. C155-56).

5
Indeed, even if the Court considered Pam’s Academy’s argument, it actually inverts

the reasonableness test from Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871.

That is to say, can an employer claim that restrictive covenants of a particular duration

are categorically enforceable? Stated differently (and answering this rhetorical),

employers cannot point to the most restrictive covenant upheld somewhere and then

argue that a covenant of similar duration elsewhere is valid without introducing

evidence of reasonableness. The Court’s task at this point, though, is limited to

answering the certified questions presented to it.

The Court should answer both certified questions in the negative and remand to the

circuit court with instructions to dismiss this action with prejudice.

Respectfully submitted,

CALLIE MARIK

By: /s/ Kenneth J. Vanko
Kenneth J. Vanko
Kenneth J. Vanko
Emily L. Langhenry
Clingen Callow & McLean, LLC
2300 Cabot Drive, Suite 500
Lisle, Illinois 60532
(630) 871-2600
vanko@ccmlawyer.com
langhenry@ccmlawyer.com
Counsel for Defendant-Appellant

6
CERTIFICATE OF COMPLIANCE
I certify that this reply brief conforms to the requirements of Supreme Court Rules

341(a) and (b). The length of this reply brief, excluding the pages containing the Rule

341(d) cover, the Rule 341(h)(1) statement of points and authorities, the Rule 341(c)

certificate of compliance, the certificate of service, and those matters to be appended to

the brief under Rule 342(a), is 6 pages.

Respectfully submitted,

CALLIE MARIK

By: /s/ Kenneth J. Vanko
Kenneth J. Vanko

Kenneth J. Vanko
Emily L. Langhenry
Clingen Callow & McLean, LLC
2300 Cabot Drive, Suite 500
Lisle, Illinois 60532
(630) 871-2600
vanko@ccmlawyer.com
langhenry@ccmlawyer.com
Counsel for Defendant-Appellant

7
E-FILED
Transaction ID: 3-17-0803
File Date: 5/8/2018 11:35 AM
Barbara Trumbo, Clerk of the Court
APPELLATE COURT 3RD DISTRICT
No. 3-17-0803

IN THE APPELLATE COURT OF ILLINOIS
THIRD JUDICIAL DISTRICT

)
PAM’S ACADEMY OF DANCE/FORTE ARTS ) Appeal from the Circuit Court of the
CENTER, ) Thirteenth Judicial Circuit, Grundy
) County, Illinois
Plaintiff-Appellee, )
) Case No. 16-LM-155
v. )
) Circuit Judge: Sheldon Sobel
)
CALLIE MARIK, ) Appeal from Order dated June 28, 2017
) Certified Question granted November
Defendant-Appellant. ) 8, 2017
)

NOTICE OF FILING

To: Zachary B. Pollack
Sabuco, Beck, Hansen, Massino & Pollack P.C.
405 North Liberty Street
Morris, Illinois 60450
zac@sabucobeck.com

Please take notice that on May 8, 2018 we electronically filed with the Clerk of
the Appellate Court of Illinois, Third Judicial District the following:

1. Reply Brief of Defendant-Appellant

True and correct copies of which are attached hereto and served upon you.

CALLIE MARIK

By: /s/ Kenneth J. Vanko
Counsel for Defendant-Appellant
Kenneth J. Vanko
Emily L. Langhenry
Clingen Callow & McLean, LLC
2300 Cabot Drive, Suite 500
Lisle, Illinois 60532
(630) 871-2600
vanko@ccmlawyer.com
langhenry@ccmlawyer.com

{00408253.DOCX /v. 1 }
CERTIFICATE OF SERVICE
The undersigned hereby states that she served the referenced documents to the
parties listed in the attached service list via e-mail and regular mail by depositing the
same in the mail chute located in Lisle, IL on or before 5:00 p.m. this 8th day of May, 2018.

By: /s/ Nikki Matthiscyk

{00408253.DOCX /v. 1 }