SECOND DIVISION
February 1, 2005

JUSTICE WOLFSON delivered the opinion of the court:

This is the second case we have been asked to decide regarding membersof the Appelbaum family and their disputes over the family's frozen shrimpbusiness, Penguin Frozen Foods, Incorporated (Penguin Foods). Our decision inthis case is confined to the preliminary injunction entered in the trialcourt.

It all started when William Appelbaum (William) filed a complaintagainst his siblings and other members of Penguin Foods' board of directors,alleging several causes of action arising from the termination of hisemployment. See Appelbaum v. Appelbaum, No. 1-03-0221 (2003) (unpublishedorder pursuant to Rule 23). Penguin Foods filed a countercomplaint againstWilliam and John W. Appelbaum (J.W.) alleging breach of contract and tortiousinterference with a contract. The contract at issue is a restrictive covenantsigned by J.W. when he worked for Penguin Foods.

In this interlocutory appeal, counter-defendants William and J.W.contend the trial court improperly granted counter-plaintiff Penguin Foods apreliminary injunction, enjoining them from contacting several of PenguinFoods' customers and suppliers based on the restrictive covenant J.W. signed. We conclude the preliminary injunction is too broad and must be substantiallymodified.

FACTS

Penguin Foods, a Delaware corporation, is owned and operated byJonathan, Daniel, and Andrea Appelbaum in Northbrook, Illinois. WilliamAppelbaum is their brother. Since 1950, Penguin Foods has been buying andselling seafood products, primarily domestic frozen shrimp harvested from theGulf of Mexico. Penguin Foods purchases almost all of its shrimp inventorybetween May and December of each year, the high season for catching shrimp inthe Gulf of Mexico. Penguin Foods stores the frozen shrimp and uses it tofill sales orders throughout the year.

In September 2001, Jonathan terminated William's employment with PenguinFoods. William is now vice-president and secretary of Worldwide Shrimp(Worldwide). Like Penguin Foods, Worldwide buys and sells domestic shrimpfrom the Gulf of Mexico.

J.W. is William's cousin and worked as a salesman at Penguin Foods for18 years, beginning in 1986. On May 22, 1991, J.W. signed a restrictive post-employment covenant (the Covenant) with Penguin Foods. The Covenant includeda nonsolicitation clause:

"Employee covenants and agrees that, for aperiod of [24 months] following the termination ofEmployee's employment with the Company for any reason,Employee shall not, as principal, agent, owner,partner, stockholder, officer, director orparticipant, independent contractor, or employee(either with or without compensation) or in anyindividual or representative capacity whatsoever,directly or indirectly, contact, call upon, purchasefrom, solicit business from, sell, or buy, or contractto sell to or buy from, any Customer or Supplier ofthe Company any Product which is the same as orsimilar to any Product bought or sold by the Company,and Employee shall not, directly or indirectly, aid orassist any other person, firm or corporation in doingany of the aforesaid acts."

The Covenant defined "Customer":

"*** those customers of [Penguin Foods]

(1) that Employee contacted or serviced duringthe [12] month period immediately preceding thetermination of Employee's employment, and

(2) that contracted with [Penguin Foods] for thepurchase of Products or to whom [Penguin Foods] soldProducts during the [12] month period immediatelypreceding the termination of Employee's employment."

According to the Covenant's definition, "suppliers" were those that J.W."contacted or dealt with *** and that contracted with the company to sell anddeliver Product to [Penguin Foods] during the [12] month period immediatelypreceding the termination of [J.W.'s] employment."

While at Penguin Foods, J.W. was the top salesman, bringing in 40 to 50%of its sales. His duties included servicing accounts: managing shipping,controlling inventory, negotiating prices, and approving credit for customers. In return, Penguin Foods paid J.W. over $7 million in salary and bonuses from1991 to 2003.

J.W. left Penguin Foods in January 2004, and formed Worldwide withWilliam a few months later. J.W. serves as the president and treasurer ofWorldwide. J.W., William, and William's two children are Worldwide'sshareholders.

On May 5, 2004, Penguin Foods filed a third party complaint againstJ.W., alleging he breached the Covenant. Penguin Foods also amended itscounterclaim against William, adding a claim of tortious interference forinducing J.W. to breach the Covenant and moved for a temporary restrainingorder and preliminary injunction. Penguin Foods submitted a list of its 48suppliers (Exhibit 24) and 494 customers (Exhibit 25). In Exhibit 24,Jonathan wrote "PC" or "SC" by the suppliers' names if J.W. was their primaryor secondary contact. In Exhibit 25, Jonathan wrote "PC", "SC", or "S" nextto some of the names to indicate J.W. was their primary or secondary contact,or had serviced those customers. Jonathan also noted which customers had beenordering from Penguin Foods for approximately 3, 5, 10, or over 20 years. Penguin Foods requested the court enjoin J.W. and William from contactingthose customers and suppliers for the duration of the 24-month period requiredby the Covenant. There was no attempt to file the customer and supplier listsunder seal.

At the hearing on Penguin Foods' motion, J.W. testified that afterleaving Penguin Foods he had not contacted any of the customers on PenguinFoods' list and had told several of his former customers he could not sell tothem due to the Covenant. When asked to review Jonathan's notations inExhibit 25, J.W. agreed he was the primary contact for all but one of the "PC"customers. He agreed he had contact with all of the "SC" customers, butdenied any contact with the customers with an "S" appearing next to theirnames. J.W. denied he was the secondary contact for the "SC" suppliers asnoted in Exhibit 24.

J.W. testified Worldwide had three employees: William, J.W., and Mr.Zibinski, who helped with the computers. J.W. said he did not assist Williamin contacting Penguin Foods' customers or suppliers. William would go to aseparate office when communicating with customers he and J.W. believed werecovered by the Covenant. If J.W.'s former customers contacted him, J.W. toldthem he could not sell to them due to the Covenant. J.W. admitted he stillwas able to make a living in the seafood industry despite the covenant'slimitations.

William testified J.W. gave him permission to use his name inWorldwide's business plan before J.W. left Penguin. If suppliers asked,William told them J.W. was his partner at Worldwide. William admitted thatduring his 20 years at Penguin Foods, he purchased from only one supplier andcould not remember the supplier's name. He agreed he was responsible for only1% of Penguin Foods' sales.

Jonathan testified Penguin Foods required key employees of the companyto sign postemployment covenants. Jonathan's siblings, brother-in-law, andJ.W. all signed covenants. Jonathan explained his family members wererequired to sign covenants because the family name carried "a great amount ofsignificance" in the "small industry." Sales personnel who were not membersof the Appelbaum family were not required to sign the covenant.

Jonathan testified he considered "servicing" customers to includefunctions that were unique to individual customers and their needs, such asthe size, type, and color of shrimp they preferred. Typically, customers whoplaced orders with Penguin Foods would specify only the shrimp size theywanted. Based on J.W.'s experience and training, J.W. then would select whichtype of shrimp to send the client, as well as the location of the inventory. J.W. serviced customer orders by choosing which shrimp to ship even when theorder was placed with another salesperson. In addition to sales, J.W. wasprimarily responsible for shipping, and he purchased all of Penguin Foods'peeled shrimp inventory. J.W. and Jonathan were the only two Penguin Foods'employees who could extend credit to customers for their orders.

Jonathan testified that Worldwide's conduct "created a great amount ofuncertainty, both with suppliers and customers, as to Penguin's ongoingviability." He was aware of "a dozen or so" of Penguin's customers contactedby Worldwide--some had been Penguin's customers for over 10 years. Thosecustomers accounted for 12% of Penguin Foods' sales in 2003. Due tocustomers' changing needs, Jonathan could not determine Penguin Foods' lostprofits based on historical data.

In addition to the testimony of the three witnesses, the partiessubmitted several exhibits to the trial court.

The trial court granted Penguin Foods' motion for a preliminaryinjunction and enjoined J.W. and William from contacting 29 of Penguin Foods'suppliers and 233 of the 262 customers who purchased from Penguin in 2003.

J.W. and William filed this interlocutory appeal, contending theinjunction represents an abuse of discretion.

DECISION

First, we must sort out the issues that have to be decided. J.W. andWilliam do not contend the Covenant, on its face, violates established legalprinciples. They have no quarrel with the terms of the Covenant. J.W.'sposition is that Penguin Foods failed to prove he did anything that violatesthe Covenant. In his brief, J.W. says he "does not dispute that regardless ofhis status, he cannot contact, directly or indirectly, his 2003 customers andsuppliers." (Emphasis in original.) That leaves us with J.W.'s claim that hecannot be enjoined from contacting customers he merely serviced but did notcontact during 2003, and his claim that he cannot be enjoined from contactingsuppliers other than those Penguin listed as suppliers who used J.W. as theirprimary contact at Penguin (the "PC" suppliers). William, relying on hisclaim that he operates within a "Chinese Wall," contends any restriction theCovenant imposes on J.W. does not apply to him.

I. Standard of Review

The purpose of a preliminary injunction is to preserve the status quountil the trial court decides the merits of a case. Dixon Association forRetarded Citizens v. Thompson, 91 Ill. 2d 518, 524, 440 N.E.2d 117 (1982). Atrial court's decision to grant a preliminary injunction will not be set asideunless we find the trial court abused its discretion. Millard MaintenanceServ. Co. v. Bernero, 207 Ill. App. 3d 736, 743-44, 566 N.E.2d 379 (1990). Asa reviewing court, our role is limited to determining whether the trialcourt's findings were against the manifest weight of the evidence. MillardMaintenance, 207 Ill. App. 3d at 744; McRand, Inc. v. Beelen, 138 Ill. App. 3d1045, 1050-51, 486 N.E.2d 1306 (1985). A finding is against the manifestweight of the evidence only if the opposite conclusion is clearly evident. Inre Arthur H., 212 Ill. 2d 441, 464, 819 N.E.2d 734 (2004).

II. Protectible Business Interest Required for a Preliminary Injunction toEnforce a Restrictive Covenant

"[T]he enforceability of a restrictive covenant is a question of lawwhich must be carefully scrutinized because such covenants operate as apartial restraint on trade." Lyle R. Jager Agency, Inc. v. Steward, 253 Ill.App. 3d 631, 636, 625 N.E.2d 397 (1993). The party relying on the covenantmust show it is reasonable and necessary to protect a legitimate businessinterest, in addition to the usual elements of a valid agreement, likeconsideration. Office Mates 5, North Shore, Inc. v. Hazen, 234 Ill. App. 3d557, 568, 599 N.E.2d 1072 (1992). J.W. and William do not claim therestrictive covenant in this case is unenforceable.

A party seeking a preliminary injunction to enforce a restrictivecovenant must show: (1) it has a protectible interest, such as near-permanentcustomer relationships or confidential information; (2) no adequate remedy atlaw exists; (3) the party will suffer irreparable harm if the injunction isnot granted; and (4) there is a likelihood the party will succeed on themerits.  Lyle R. Jager Agency, 253 Ill. App. 3d at 636.

William and J.W. contend Penguin Foods is not entitled to a preliminaryinjunction barring their contact with the "serviced" customers or the "SC"suppliers because Penguin Foods failed to show: (1) J.W. "serviced" thosecustomers; (2) J.W. had access to confidential information as a Penguin Foodsemployee; or (3) it had near-permanent relationships with those customers andsuppliers. William and J.W. also contend the trial court abused itsdiscretion by extending the preliminary injunction to cover William.

First, Penguin Foods is right when it says J.W. "serviced" several oftheir customers by handling the shipping, choosing the product, extendingcredit, and managing the inventory. But that does not decide the issue. Westill must find a protectible business interest. Without it, the covenantcannot be enforced. See Lyle R. Jager Agency, 253 Ill. App. 3d at 635.

There are two ways a party can establish that it has a protectiblebusiness interest: (1) it can show the employee acquired the party'sconfidential information and attempted to use that information for his ownbenefit; or (2) it can show it has a near-permanent relationship with itscustomers, and but for his employment with the party, the employee would nothave had access to those customers. Office Mates 5, 234 Ill. App. 3d at 569.

The trial court found both circumstances existed in this case.

A. Penguin Foods' protectible business interest--confidential customerinformation

William and J.W. contend the servicing information and knowledge J.W.acquired was not confidential and does not qualify as a protectible businessinterest. Penguin Foods concedes it cannot protect its customers' names, butinstead seeks to prevent J.W. from using information he learned about eachcustomer's shrimp preferences.

Penguin Foods makes no serious claim that its servicing information--credit approval, product choice, packing plant selection, freightarrangements, and size and color of shrimp--is the kind of confidentialinformation that is protectible by injunction. Confidentiality was notclaimed by Penguin Foods during oral arguments in this appeal. Nowhere in theCovenant do we find a reference to "confidential" information. Instead, theCovenant repeatedly refers to "near-permanent" relationships with PenguinFoods' customers and their special needs. We address the issue because thetrial court found confidential information.

In Office Mates 5, the court described which types of customerinformation are protectible. Customer information cannot be protected if itis generally available to employees, known by persons in the trade, or easilyfound in telephone directories and industry directories. Office Mates 5, 234Ill. App. 3d at 575.

In this case, Jonathan testified that J.W. had special knowledgeregarding the shipping and product needs of Penguin Foods' customers. PenguinFoods' stated in its brief, "This information is only obtained throughservicing the customer." Yet there is no indication Penguin Foods'competitors have not compiled similar information or could not easily acquirethat information simply by asking customers when they place their orders. SeeOffice Mates 5, 234 Ill. App. 3d at 575-76 (when customer information isreadily available to competitors through normal competitive means, such asasking questions designed to elicit the information, the information is notprotectible).

Other Penguin Foods' salesmen, non-Appelbaum, also had access to suchinformation, yet Penguin Foods did not require every salesman to sign arestrictive covenant or confidentiality agreement. In addition, informationused to "service" customers when extending credit is available from Seafax--aseafood industry directory and credit reporting agency.

Based on the evidence presented at the hearing, we conclude J.W.'sknowledge of Penguin Foods' customers--their preferences and creditinformation--is not confidential. Penguin Foods did not present evidencesuggesting it disclosed confidential information to J.W. or that the type ofknowledge J.W. had was unique in the industry. The opposite conclusion isclearly evident.

B. Penguin Foods' near-permanent relationships

William and J.W. contend Penguin Foods has no protectible businessinterest in its suppliers, other than those for which J.W. was the primaryPenguin contact in 2003. Additionally, they contend Penguin Foods did nothave near-permanent relationships with the 189 customers it alleged J.W.serviced but did not contact in 2003.

Illinois courts have used two tests to determine whether a business hasnear-permanent relationships. Using the first test, the courts examine thenature of the plaintiff's business. Office Mates 5, 234 Ill. App. 3d at 571. The second test involves the application of seven factors. McRand, 138 Ill.App. 3d at 1051-54.

Under the first test--the "nature of the business" test--certainbusinesses are more successful in showing near-permanent relationships, suchas businesses engaged in providing professional services or selling uniqueproducts. Office Mates 5, 234 Ill. App. 3d at 571. "[A] near-permanentrelationship with customers is generally absent from businesses engaged insales." Springfield Rare Coin Galleries, Inc. v. Mileham, 250 Ill. App. 3d922, 935, 620 N.E.2d 479 (1993). "When the employer's business is sales of anon-unique product, its customers also do business with its competitors, aregenerally known to competitors, or are ascertainable by reference to telephoneor specialized directories, the near-permanency test will not be satisfied." Springfield Rare Coin Galleries, 250 Ill. App. 3d at 935; see Office Mates 5,234 Ill. App. 3d at 571; Image Supplies, Inc. v. Hilmert, 71 Ill. App. 3d 710,714-15, 390 N.E.2d 68 (1979).

Using the second test, courts apply seven factors to determine whether anear-permanent relationship exists: (1) the number of years it takes theemployer to develop its clientele; (2) the money it invested to acquire itscustomers; (3) the difficulty it faced when acquiring customers; (4) theextent of the employee's personal contact with the customer; (5) theemployee's knowledge of the customers; (6) the length of time the customershave been associated with the employer; and (7) the continuity of the customerrelationships. McRand, 138 Ill. App. 3d at 1051-54.

1. Penguin Foods' relationships with its suppliers

Confining our inquiry to those suppliers listed by Penguin as "SC," wefind Penguin Foods failed to prove the existence of near-permanentrelationships. J.W. concedes he is prohibited from contacting or doingbusiness with suppliers he contacted in 2003, and he admitted contact withthose suppliers listed as "PC"--primary contacts. We include the secondarycontact suppliers in our inquiry because we agree with J.W. that there islittle or no evidence he actually contacted them in 2003. He denies it, andJonathan's testimony about those contacts lacks any assuredness.

The record provides no evidence indicating Penguin Foods had anydifficulty in creating relationships with those suppliers, or the timerequired to find new suppliers, or whether it spent specific amounts of moneyto secure new suppliers. Unlike the customer list, Penguin Foods' supplierslist does not show how long Penguin Foods has been using the listed suppliers. Names of the suppliers are easy to find. They do not sell a unique product;nor do they use any secret process, design, or plan.

Penguin contends J.W. has "expansive" knowledge of Penguin Foods'suppliers, but does not articulate how that knowledge strengthened therelationships between Penguin Foods and its suppliers or how it gives him acompetitive advantage. Penguin Foods' allegations that it invested time,money, and effort in securing its suppliers are unsupported by evidence. Noris there any evidence to establish the duration or continuity of thoserelationships.

The only case Penguin Foods cite to support the injunction's applicationto suppliers, J.D. Marshall International, Inc. v. Fradkin, 87 Ill. App. 3d118, 409 N.E.2d 4 (1980), does not control. The issue in that case waswhether the trial court properly dismissed plaintiff's claim of breach of arestrictive covenant. On appeal, the court reversed the dismissal, findingthe plaintiff's complaint, liberally construed, set forth a legitimatebusiness interest, because the plaintiff claimed it had an exclusive agreementwith at least one of its suppliers. J.D. Marshall, 87 Ill. App. 3d at 123.

Here, Penguin Foods presents no evidence of an exclusive relationshipwith its "SC" suppliers to support its plea for injunctive relief. Withoutevidence of exclusive supplier relationships or any of the McRand factorsconcerning the "SC" suppliers, we conclude the trial court's finding thatPenguin Foods had near-permanent relationships with those suppliers wasagainst the manifest weight of the evidence.

2. Penguin Foods' relationships with its customers

Next, we decide whether Penguin Foods had near-permanent relationshipswith those 189 customers J.W. serviced in 2003 but with whom he had no actualcontact. We understand Penguin Foods to be contending those near-permanentrelationships somehow formed a protective bond for the servicing information.

Penguin Foods sells shrimp, a non-unique product. At oral argument,Penguin Foods contended its business is not merely selling shrimp butproviding a service to its customers. J.W. provided that service by approvingcustomers for credit, knowing their product preferences, and arranging for theshrimp to be shipped to the customers. Penguin Foods contends this servicegives it a protectible business interest in those customers. We disagree.

Any service Penguin Foods provides its customers, in the form of creditapproval, shipping arrangements, or specifying what type of shrimp to send, isancillary to its sales. Penguin Foods, a shrimp wholesaler, cannot bedescribed as a service provider simply because it provides basic customerservice when selling its product. It uses no secret plans, design, orprocess. Its product is not special or unique. There is nothing verycomplicated about shrimp. Penguin Foods business is not the type that caneasily show near-permanent relationships. See Office Mates 5, 234 Ill. App.3d at 571-72.

We reach the same conclusion when we use the seven McRand factors. Thefirst factor--the length of time customers have been associated with theemployer--indicates near-permanent relationships when the relationships last along time and are uninterrupted. Compare Preferred Meal Systems, Inc. v.Guse, 199 Ill. App. 3d 710, 722, 557 N.E.2d 506 (1990) (factor helpedplaintiff where it had 10-year-old relationships with half of its customersand over two-thirds of plaintiff's customers had been clients for over 5years), with Office Mates 5, 234 Ill. App. 3d at 573 (factor weighed againstthe plaintiff because 50% of its customers never returned and two-thirds ofits customer relationships were less than five years old).

Penguin Foods has been around for 54 years. Its customer list shows 89customers have purchased seafood from Penguin Foods for over 10 years. Another 104 customers have been buying from Penguin for over 3 years. Together, these customers make up 39% of the 494 accounts listed.

Although these customers have been purchasing seafood from Penguin for along time, they account for a relatively small percentage of the total list. Jonathan admitted in a deposition that there was a lot of fluidity in thecustomer lists, and Penguin typically gained and lost 10 to 15 customers eachyear. The record does not provide evidence of the specific time it took andthe cost to develop individual customers.

In McRand, the court found this first factor favored the employerbecause the defendant employees held key positions within the company and hadintimate knowledge of the customers' needs, buying habits, future plans, andpreviously rejected or accepted proposals. That knowledge allowed them tooffer a full range of services to their customers. McRand, 138 Ill. App. 3dat 1052-53. The court said, "Employee's extensive and specific knowledge ofcustomers is unnecessary in a business where the customers are transitory." McRand, 138 Ill. App. 3d at 1053. In McRand, relied on heavily by PenguinFoods, a protectible business interest was found. But McRand had only fivemajor accounts. The business involved maintaining long-standing customers indesigning and coordinating management incentive award programs for majorcorporations or businesses. The defendant employees had formed a competingbusiness and solicited McRand customers 18 months before resigning. Personalcontact with customers was the controlling fact in McRand: "The extent ofMcRand's knowledge of its clients is closely related to the factor of personalcustomer contact by its employees." McRand, 138 Ill. App. 3d at 1052.

In this case, J.W. made decisions as to which shrimp would be used tofill customer orders. Unlike the employees in McRand, J.W. did not need anextensive and specific knowledge of Penguin Foods' customers to do this job. The only customer-related information he needed to know for the task was whichcolor or size shrimp the customer preferred. He then relied on his knowledgeof Penguin Foods' inventory, its location, and shipping resources to decidewhich shrimp to send. Simply knowing which shrimp a customer likes is not thetype of extensive knowledge that indicates a near-permanent relationship.

Next, we examine the extent of J.W.'s contact with Penguin's customers. Substantial contact between an employee and a customer indicates the employerwas pursuing a near-permanent relationship. McRand, 138 Ill. App. 3d at 1052;see Millard Maintenance, 207 Ill. App. 3d at 748 (employer and sales staffmade an effort to develop and maintain close relationships with customers,including social outings with key people working for customers).

J.W. contends Penguin Foods must establish J.W. had contact with a largepercentage of Penguin's customers to justify an injunction against J.W. fromsoliciting the 189 "serviced" customers he did not contact. In McRand, 183Ill. App. 3d at 1058, the court said, "The trial court may properly enjoinonly activities involving the employer's customers with whom the formeremployees had been involved during their employment."

Here, J.W. worked for Penguin Foods for 18 years and served as a primaryor secondary contact for several customers. For the 189 "serviced" customersat the center of this dispute, he fulfilled a "behind-the-scenes"administrative role by deciding which inventory to ship them and whether toextend them credit. As J.W. adamantly maintains, the record reflects he hadno direct contact with those customers he only serviced. We do not believethe contact factor indicates the existence of near-permanent relationshipswith respect to the "serviced" customers in this case.

There is little information about Penguin Foods' customers available forus to apply the remaining McRand factors. The record bears no evidence of thefrequency of its customers' contact or orders with Penguin, or whether theyused other suppliers in addition to Penguin. Penguin Foods failed to produceany evidence showing it was time-consuming, expensive, or difficult forPenguin to acquire new customers. Although Penguin Foods alleged in itscomplaint that it spent over $100,000 to develop J.W. and other salesmen, J.W.denied that allegation as it applied to him. A refuted allegation is notconsidered evidence. See Ableman v. Slader, 80 Ill. App. 3d 84, 99, 224N.E.2d 569 (1967)("[a] temporary injunction should not be granted on thepleadings alone where the answer controverts material allegations of thecomplaint"); see also Office Mates 5, 234 Ill. App. 3d at 574 (no near-permanent relationships found where money spent to train account executiveswas not directly tied to a particular client; taking clients out for lunch andsending cards and gifts was not sufficient).

We believe Penguin Foods failed to present enough evidence showing ithad near-permanent relationships with the serviced-only customers. The trialcourt's finding of near-permanent relationships with those customers wasagainst the manifest weight of the evidence.

III. Remaining requirements for a preliminary injunction

In addition to showing a protectible business interest, a party seekinga preliminary injunction must present a fair question that the claimed rightsexist and it will probably be entitled to the relief sought. Keefe-Shea JointVenture v. City of Evanston, 322 Ill. App. 3d 163, 174, 773 N.E.2d 1155(2003). The party must also show there is no adequate remedy at law, and itwill suffer irreparable harm absent the injunction. Lyle R. Jager Agency, 253Ill. App. 3d at 635.

In this case, the trial court found that Penguin Foods satisfied therequirements for a preliminary injunction regarding the likelihood of successon the merits, the absence of an adequate remedy at law, and irreparable harm. For purposes of this appeal, we have determined these findings were notagainst the manifest weight of the evidence. We have confined our analysis tothe preliminary injunction dispute; we do not intend to decide the issuesraised by Penguin Foods' counterclaim for money damages.

IV. Scope of the preliminary injunction--Enjoining William

We must also decide whether the trial court properly enjoined Williamfrom soliciting any of Penguin Foods' customers that J.W. could not solicit,even though William was not a party to the Covenant.

In Preferred Meal Systems, 199 Ill. App. 3d at 713, the plaintiffappealed the trial court's denial of preliminary injunctive relief againstthree former employees--Guse, Singer, and Reynolds. The plaintiff allegedGuse breached his restrictive post-employment covenant when he formed acompeting business with Singer and Reynolds, and that all three defendantsbreached their fiduciary duties to their former employer by hiring away itsemployees. Preferred Meal Systems, 199 Ill. App. 3d at 715. On appeal, thiscourt said the company formed by the defendants should have been enjoined as"the instrumentality employed by all three individual defendants inimplementing and perfecting the breach of their duty to [the plaintiff]." Preferred Meal Systems, 199 Ill. App. 3d at 726. The court ordered the trialcourt to grant injunctive relief against all three individual defendants andtheir new business, explaining, "injunctive relief against the [defendants]without restraining the creature spawned by their wrongs, would be completelywithout any force or effect." Preferred Meal Systems, 199 Ill. App. 3d at727.

William and J.W. contend they implemented a "Chinese Wall" to preventJ.W. from assisting William to solicit the customers and suppliers J.W. couldnot directly solicit. The trial court found that William and J.W.'s "ChineseWall" was inadequate to protect Penguin Foods' interests.

The term "Chinese Wall" describes a strategy used by organizations toprevent the flow of confidential information from one person to another. SeeWeglarz v. Bruck, 128 Ill. App. 3d 1, 6, 470 N.E.2d 21 (1984) (law firmestablished "Chinese Wall" to prevent an attorney from sharing a previousclient's confidential information with attorneys representing adverseclients). "Chinese Walls" are frequently used in law firms to prevent beingdisqualified from representing a client based on an attorney's conflict ofinterest. Weglarz, 128 Ill. App. 3d at 4. In Weglarz, a law firm tried toprevent disqualification by arguing it had a Chinese Wall in place to insulatethe attorneys involved in the litigation from the conflicted attorney. Thetrial court ruled against the firm and disqualified them. On appeal, thiscourt affirmed, noting this was a small law firm "where presumably there ismore contact between the attorneys than would exist in a large,departmentalized firm." Weglarz, 128 Ill. App. 3d at 6.

In this case, several facts support the trial court's decision, such asthe small size of Worldwide, J.W.'s position in the company and the likelihoodof contact between J.W. and William. J.W. played several important roles atWorldwide as its president, treasurer, and half of its sales team at the timePenguin Foods' moved for a preliminary injunction. Worldwide's small sizemakes it unlikely J.W. and William can manage the business without sharinginformation about its clientele. J.W. and William run Worldwide. Due totheir positions in the company, they lack any mechanism to enforce the"Chinese Wall", such as a person with more authority to ensure they do notshare information about J.W.'s former customers. Additionally, the trial court could infer J.W. receives financialbenefit from any sales William secures from Penguin Foods' customers. Worldwide is a closely held corporation. Worldwide's only other shareholders,besides J.W. and William, are William's two children.

Although William says he retreats to a separate office when talking toPenguin Foods' customers, the trial court could infer contact between J.W. andWilliam is very likely. See Weglarz, 128 Ill. App. 3d at 6. The trial courtcould reasonably infer William invited J.W. to join Worldwide because heneeded J.W.'s knowledge and expertise. When J.W. left Penguin Foods, he wasits top salesman, bringing in 40 to 50% of its annual sales, and he purchasedall of Penguin Foods' peeled shrimp inventory. In comparison, William broughtin only 1% of the company's sales, and his purchasing experience was limitedto transactions with one supplier whose name he had forgotten.

Based on these facts, we conclude the trial court's finding thatWorldwide's "Chinese Wall" did not protect William from being enjoined was notagainst the manifest weight of the evidence.

CONCLUSION

For the reasons we have given, we remand this cause to the trial courtto redraw the temporary injunction. We direct the trial court to do asfollows:

(1) enjoin J.W. from soliciting or selling to the Penguin Foodscustomers for which J.W. was the primary or secondary contact, listed as "PC"or "SC" on Penguin Exhibit 25;

(2) enjoin William from soliciting or selling to those Penguin Foodscustomers for which J.W. was the primary or secondary contact in 2003, listedas "PC" and "SC" on Penguin Exhibit 25;

(3) enjoin J.W. from contacting or buying from those suppliers for whichJ.W. was the primary contact, listed as "PC" on Penguin Exhibit 24;

(4) enjoin William from contacting or buying from those suppliers forwhich J.W. was the primary contact, listed as "PC" on Penguin Exhibit 24;

(5) eliminate from the preliminary injunction all other provisions thatpurport to enjoin J.W. and William from soliciting, contacting, buying from,or selling to Penguin suppliers and customers.

Reversed; cause remanded with directions.

HALL, and GARCIA, JJ., concur.