Restraining Order Zekelman v Julian Bowron & Vector Minima

1. In the Circuit Court of Cook County, Illinois
County Department, Chancery Division
ORDER
This matter coming to be heard on Plaintiffs’ Motion for Temporary Restraining Order,
due notice having been given, and the Court being fully advised in the premises, IT IS HEREBY
ORDERED:
1. On October 29, 2020, this Court received Plaintiffs’ Motion for Temporary Restraining
Order and Preliminary Injunction. The Court agreed to hear this case on an expedited
basis, and an expedited hearing date was set for Monday, November 16, 2020 at 10:30
a.m. via zoom on the TRO.
2. In this case, Plaintiffs alleges that Defendant Julian Bowron breached his Employment
Agreement with Plaintiff Zekelman Industries, Inc. (“Zekeleman”), which contained,
among other things, a non-compete, non-disclosure, non-solicitation, and confidentiality
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ZEKELMAN INDUSTRIES, INC.,
Z-MODULAR LLC, and Z-MODULAR
CANADA INC. FKA VECTORBLOC
CORP.,
Plaintiffs,
v.
JULIE BOWRON AND VECTORMINIMA
INC.,
Defendants.
Case No. 20 CH 6539
Judge Eve Reilly
Calendar 07

2. provision, by forming the company VectorMinima. Plaintiffs allege that VectorMinima
directly competes with Zekelman and that Bowron has utilized trade secrets and client
lists from Z-Modular in forming VectorMinima and the Metabloq product.
3. A temporary restraining order is a drastic, emergency remedy which may issue only in
exceptional circumstances and for a brief duration. ​Abdulhafedh v. Secretary of State​, 161
Ill. App. 3d 413, 416 (2d Dist. 1987). The purpose of a temporary restraining order is to
allow the circuit court to preserve the ​status quo​—to prevent a threatened wrong or a
continuing injury—pending a hearing to determine whether it should grant a preliminary
injunction. ​Id.​ “The status quo to be preserved is the last actual, peaceable, uncontested
status which preceded the pending controversy.” ​Martin v. Eggert​, 174 Ill. App. 3d 71,
77 (2d Dist. 1988). While the term status quo has been the subject of often inconsistent
interpretations, “‘[preliminary injunctive relief] is designed to prevent a threatened wrong
or the further perpetration of an injurious act.’​” Kalbfleisch v. Columbia Cmty. Unit Sch.
Dist. Unit No. 4, 396 Ill. App. 3d 1105, 1118 (5th Dist. 2009). Sometimes the status quo
is “not a condition​ of rest but, rather, . . . a condition of action that [is] necessary to
prevent irreparable harm.” ​Id.​ at 1117.
4. To obtain a temporary restraining order, a plaintiff must typically establish: (1) a clearly
protected right; (2) irreparable harm by the defendant’s conduct if an injunction does not
issue; (3) there is no adequate remedy at law; and (4) likelihood of success on the merits.
Chi. Sch. Reform Bd. of Trs. v. Martin​, 309 Ill. App. 3d 924, 939 (1st Dist. 1999).
Additionally, courts often balance the equities or the relative hardships. ​Scheffel & Co. v.
Fessler​, 356 Ill.App.3d 308, 313 (5th Dist. 2005).
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3. 5. To establish a clearly ascertainable right in need of protection, a plaintiff must raise a fair
question that it has a substantive interest recognized by statute or common law. ​Delta
Med. Sys. v. Mid-America Med. Sys., Inc.​, 331 Ill. App. 3d 777, 789-90 (1st Dist. 2002).
A well-pleaded complaint for injunctive relief must contain on its face a clear right to
relief and allege facts​ ​which establish the right to such relief in a positive, certain and
precise manner. ​Nameoki Tp. v. Cruse​, 155 Ill. App. 3d 889, 898 (5th Dist. 1987).
6. Plaintiffs raise a fair question that it has a protectable interest. Plaintiffs’ interests stem
from the Employment Agreement with Defendant Bowron and Plaintiffs have trade
secret and trademark proprietary interests. Courts have routinely recognized trade secrets,
confidential information, customer relationships, and trademarks as protectable interests.
E.g., Stengstrom Petroleum​ ​Services Grp., Inc. v. Mesch, ​874 N.E.2d 959, 971 (Ill. App.
2007). Plaintiffs allege, among other things, that in violation of the restrictive covenants
contained in the Employment agreement, Bowron formed VectorMinima, which directly
competes with Zekelman and which was created using misappropriated trade secrets.
Additionally, Plaintiffs allege that Defendants target Zekelman’s prospective and current
clients. Accordingly, Plaintiffs have raised a fair question of an ascertainable right in
need of protection.
7. The elements of irreparable injury and inadequate remedy at law required for a temporary
restraining order are closely related. ​Happy R. Sec., LLC v. Agri-Sources, LLC​, 2013 IL
App (3d) 120509, ¶ 36. An irreparable injury is one which cannot be adequately
compensated in damages or be measured by any certain pecuniary standard. ​Diamond
Sav. & Loan Co. v. Royal Glen Condo. Ass’n​, 173 Ill. App. 3d 431, 435 (2d Dist. 1988).
However, irreparable injury does not necessarily mean injury that is great or beyond the
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4. possibility of repair or compensation in damages, but is the type of harm of such constant
or frequent recurrence that no fair or reasonable redress can be had in a court of law.
Bally Mfg. Corp. v. JS&A Group, Inc.​, 88 Ill. App. 3d 87, 94 (1st Dist. 1980).
8. Plaintiff raises a fair question of irreparable injury and inadequate remedy at law.
Plaintiffs allege that they have and will suffer irreparable harm if a TRO is not issued
because Bowron is continuing to solicit Plaintiffs’ clients through a company that directly
competes with Zekelman in violation of the Employment Agreement, and which was
created using misappropriated trade secrets. Plaintiffs also allege that Defendants infringe
on Plaintiff’s “Vector” trademark by using the term “vector” in its company
VectorMinima to confuse and target Plaintiffs’ customers. Reply 12. As Plaintiffs point
out, irreparable harm is presumed in cases involving trade secrets, confidential
information, and restrictive covenants. ​E.g., U-Haul Co. of Central III. v. Hindahl​, 90 Ill.
App. 3d 572, 577 (1980); ​Donald McElroy, Inc. v. Delaney​, 72 Ill. App. 3d 285, 294-95
(1979); ​Ty, Inc. v. Jones Group, Inc.​, 237 F.3d 891 (7th Cir. 2001). Accordingly,
irreparable harm is presumed in the case at hand, which involves a non-compete
provision and allegations that trade secrets and confidential information are being
misappropriated by Bowron through VectorMinima. Additionally, Plaintiffs allege that
Defendant’s use of the “Vector” trademark continuously misleads Plaintiffs’ customers in
a purposeful attempt to siphon away Plaintiffs’ business. Motion 19. The Court finds that
Plaintiffs have raised a fair question of irreparable harm.
9. Plaintiffs have also raised a fair question that they have no adequate remedy at law.
Plaintiffs note that Bowron stipulated in his Employment Agreement that breach of its
covenants would result in irreparable harm to the company and its goodwill and that
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5. remedies at law would be inadequate. Motion 18. Additionally, Plaintiffs allege loss of
customers and customer goodwill. Because loss of customer goodwill cannot be
measured by money damages, Plaintiffs have raised a fair question that there is no
adequate remedy at law. ​See Gateway E. Ry. Co. v. Terminal R.R. Ass’n of St. Louis​, 35
F.3d 1134, 1140 (7th Cir. 1994) (stating that “showing injury to goodwill can constitute
irreparable harm that is not compensable by an award of money damages”).
10. Next, to show a likelihood of success on the merits, a party must: (1) raise a fair question
as to the existence of the right claimed, (2) lead the court to believe that she will probably
be entitled to the relief prayed for if the proof sustains her allegations, and (3) make it
appear advisable that the positions of the parties stay as they are until the court has an
opportunity to consider the merits of the case​. Abdulhafedh​, 161 Ill. App. 3d at 417. An
element of the likelihood of success on the merits is whether the complaint states a cause
of action sufficient to withstand a 2-615 motion to strike. See​ Strata Marketing, Inc. v.
Murphy​, 317 Ill. App. 3d 1054 (1st Dist. 2000).
11. In this case, Plaintiffs raise a fair question that they are likely to be successful on the
merits of the case. The three count Complaint seeks injunctive relief stemming from I)
Breach of Contract, II) Misappropriation of Trade Secrets, and III) Trademark
Infringement and Unfair Competition.
12. Plaintiffs have raised a fair question that they are likely to succeed on the merits of their
Breach of Contract claim. Plaintiffs argue that they are likely to succeed on their breach
of contract claim because their Employment Agreement with Bowron is ancillary to the
purchase agreement, and in this context, non-compete claims must be viewed more
favorably to the plaintiffs. ​Health Professionals, Ltd. v. Johnson​, 339 Ill. App. 3d 1021,
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6. 1031-32 (3d Dist. 2003). When restrictive covenants are entered into in these
circumstances, it is in part to make sure that “the former owner will not walk away from
the sale with the company’s customers and goodwill, leaving the buyer with an
acquisition that turns out only to be chimerical.” ​Central Water Works Supply, Inc. v.
Fisher​, 240 Ill. App. 3d 952, 957 (4th Dist. 1993). ​ A restrictive covenant ancillary to a
valid employment relationship, is reasonable, and therefore enforceable, only if the
covenant: (1) is no greater than is required for the protection of a legitimate business
interest of the employer-promisee; (2) does not impose undue hardship on the
employee-promisor, and (3) is not injurious to the public. ​Reliable Fire Equip. Co. v.
Arredondo​, 965 N.E.2d 393, 396 (2011). ​Plaintiffs have raised at least a fair question that
they can meet these requirements. The Employment Agreement with Defendant Bowron
is reasonable in temporal scope because it is only a two year restriction following the end
of the Employment Term. The geographical scope of North America is reasonable when
Zekelman operates its business throughout North America. Plaintiffs have raised a fair
question that the restrictive covenant is not greater than necessary to protect the business
interest where Bowron is only prohibited from competing in a very narrow area of this
industry. Motion 13. Plaintiffs also point out that Bowron is an engineer, and he has other
opportunities for work in spheres that don’t compete with Zekelman. Reply 5. Lastly,
Plaintiffs argue that requiring Bowron to abide by the terms of a voluntarily executed
contract will cause no injury to public welfare and instead not enforcing the agreement
would discourage commerce when Bowron received great financial benefit for his
company but refuses to hold up his end of the bargain. Motion 14. Accordingly, the Court
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7. finds Plaintiffs have alleged a fair question of the existence of an enforceable contract
and an enforceable restrictive covenant.
13. Plaintiffs have also raised a fair question of breach and a resulting harm. Defendants
argue that Bowron has not breached the non-compete covenant in the Employment
Agreement because he is not competing in any “covered business” as defined by the
employment agreement. The definition of “covered business” in the employment
agreement is:
[A]ny business, other than the Company and its subsidiaries, directly engaged in,
or with significant shareholding operations that engaged in, the manufacture of
welded or seamless steel tubular or pipe products with substantial manufacturing
operations in North America or steel framed modular systems, steel framed
modular fabrication or steel framed modular construction.
Agmt. §7(c).
Defendants allege that since VectorMinima is only an R&D Company, which licenses out
the Metabloq intellectual property to companies for manufacture, it is not a company
directly engaged in the manufacturing of steel framed modular construction. Response
7-8. Plaintiffs, on the other hand, argue that “engage” is a broad term, which Merriam’s
Dictionary has defined as “involved in activity” and “greatly interested.” Reply 3;
(https://www.merriamwebster.com/dictionary/engaged (last accessed Nov. 10, 2020).)
Plaintiffs argue that VectorMinima’s licensing of technology that enables the
manufacturing of steel modular construction is a business that is “directly involved” or
“greatly interested” in the manufacture of such systems. Whether or not VectorMinima is
actually a “covered business”, the Court believes that Plaintiffs have, at minimum, raised
a fair question that Defendants have breached the non-compete provision of their
Employment Agreement and that this will cause harm to Plaintiffs as Defendants
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8. compete for Plaintiffs’ customers and take away their business. As such, Plaintiffs have
at least raised a fair question that they are likely to succeed on their breach of contract
claim.​1
14. Additionally, Plaintiffs have raised a fair question that they are likely to succeed on the
merits of their misappropriation of trademarks claim. To state a claim for trade secret
misappropriation, a Plaintiff must allege: (1) the information at issue was a trade secret;
(2) that it was misappropriated; and (3) that it was used in the defendants’ business.
Learning Curve Toys, Inc. v. Plywood Toys, Inc.​, 342 F.3d 714, 721 (7th Cir. 2003)
(applying Illinois law). Illinois law defines a trade secret as: “Information, including but
not limited to, technical or non-technical data, a formula, pattern, compilation, program,
device, method, technique, drawing, process, financial data, or list of actual or potential
customers or suppliers, that: (1) is sufficiently secret to derive economic value, actual or
potential, from not being generally known to other persons who can obtain economic
value from its disclosure or use; and (2) is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy or confidentiality.” 765 ILCS 1065/2(d).
15. Plaintiffs allege that it acquired trade secrets involving steel modular construction when it
purchased defendant’s company and that defendant then used those trade secrets to
further his own company, VectorMinima. Motion 15. Plaintiffs also allege that
Defendants have brazenly targeted Zekelman’s clients using their client lists. Motion 15.
In response, Defendants argue that Plaintiffs provide no evidence that trade secrets were
acquired or used by Defendants. Response 5-6; 765 ILCS 1065/2 (A showing of
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Defendants also argue that Plaintiffs have failed to show any breach of the non-solicitation covenant in the
employment agreement when nothing in the agreement prohibits him from soliciting prospective customers.
However, as Plaintiffs have now alleged that Defendants solicited a current client of theirs, Ellis Don. Decl. of
Oliver Mason ¶ 3. Accordingly, Defendants’ argument fails.
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9. misappropriation or use demands a showing of (1) an acquisition of a trade secret by
improper means and (2) disclosure or use of the trade secret.). However, at this stage, it is
enough that Plaintiffs allege that trade secrets involving its modular construction
technology were used in constructing Metabloq, a product that looks similar to the
Plaintiffs’ Vectorbloc system, and that Defendants have used confidential client lists to
solicit customers of Plaintiffs. Reply 9. Accordingly, Plaintiffs have shown a fair
question that they are likely to succeed on the merits of their trade secrets
misappropriation claim.
16. In order to prevail on a trademark infringement claim, a plaintiff must demonstrate: (1)
that its mark is a valid mark entitled to legal protection; (2) that defendant is using a
similar mark; and (3) that defendant’s use of the similar mark creates a “likelihood of
confusion” by the consuming public. ​Rosario D. Salerno’s Sons, Inc. v. Butta​, 263
Ill.App.3d 42, 46 (1st Dist. 1994). Here, Plaintiffs allege an ownership interest in the
“Vector” trademark through its long use of the word “Vector” in numerous product lines
and services associated with the VectorBloc® modular construction system: e.g.
VectorBloc®, Vectorjig, Vectorig, Vectorsight, and Vectorloc. Plaintiffs claim that
Defendant’s use of the word Vector in VectorMinima causes consumers to confuse
Defendants’ product as their own. In response, Defendants points out that the Seventh
Circuit uses various factors to evaluate customer confusion, including: (1) the similarity
between the marks in appearance and suggestion; (2) the degree of care likely to be
exercised by consumers; (3) the strength of the plaintiff’s mark; (4) any evidence of
actual confusion; and (5) the intent of the defendant to “palm off” his product as that of
another. ​Sorensen v. WD-40 Co.​, 792 F.3d 712, 726 (7th Cir. 2015). Defendants argue
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10. that the marks are not similar in appearance because they combine vector with a
completely different word, “minima”, and the mark is weak because it is in a crowded
field of other trademark owners using the word “vector”. However, as Plaintiffs point out,
none of the other trademarks using the word vector have anything to do with modular
construction systems. Reply 14. Next, Defendants argue that there is no actual evidence
of customer confusion, and that sophisticated consumers would not mistake Defendants’
product for Plaintiffs. Response 12-13. Plaintiffs point out that even a highly
sophisticated consumer would see VectorMinima and believe that it's another line of
Vector products from Z-modular. Reply 12-13. No one factor is dispositive in this
analysis, and the Court believes many of these factors weigh in favor of Plaintiffs.
Accordingly, Plaintiffs have raised at least a fair question that they are likely to succeed
on their trademark infringement claim.
17. Therefore, this Court finds that Plaintiff has raised a fair question as to the likelihood of
success on the merits element.
18. In balancing the harms, Defendants point out the hardship Bowron will face if he is
prevented from earning a livelihood through his business. However, as Plaintiffs point
out, Bowron entered into an agreement to sell his company for almost a million dollars,
and voluntarily agreed to not compete with the company he sold to Defendants in
exchange for the money. Similarly, Plaintiffs point out that Bowron is an experienced
engineer, and can work in modular construction with other materials, such as wood.
Conversely, the potential hardship on Plaintiffs is great, as the value to their company
diminishes greatly when Defendants license out a competing product in violation of the
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11. Employment Agreement. Therefore, in balancing the harms, the harm to Plaintiffs must
prevail.
19. Plaintiff’s Motion for a Temporary Restraining order is ​GRANTED ​as to the following
requests for relief:
a. To enjoin Defendant Bowron and VectorMinima from conducting business
related to steel modular construction or from participating in any “covered
business” as defined by the Employment Agreement for the duration of this TRO
which shall last until the time of the hearing on a preliminary injunction motion;
b. To enjoin all Defendants from using the “vector” brand name for the duration of
the TRO which shall last until the time of the hearing on a preliminary injunction
motion.
c. To enjoin all Defendants from using or disclosing Plaintiffs’ trade secrets or
confidential information for the duration of the TRO which shall last until the
time of the hearing on a preliminary injunction motion.
This matter is set for status on December 3, 2020 at 9:30 a.m. via Zoom.
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Dated Judge Eve Reilly