Labor & Employment Law Daily Wrap Up, CONTRACT CLAIMS—N.D. Ill.: Hiring move triggers trial over customer solicitation, (Jan 15, 2026)

By George Basharis, J.D.

Packaging Corporation of America (PCA)’s contract and tortious interference claims against a former employee and a competitor will be decided by a jury, with disputed facts surrounding customer relationships, alleged solicitation, and causation driving the case forward.

A federal court in Chicago concluded that PCA’s claims alleging breach of a customer non-solicitation agreement and inducement by Welch Packaging Group present factual disputes requiring jury resolution. The ruling preserves both the breach of contract claim against the former employee and the tortious interference claim against Welch and clarifies that limitations imposed through an early temporary restraining order did not alter the terms of the underlying employment agreement (Packaging Corp. of America v. Croner, No. 19-cv-03286 (N.D. Ill. Jan. 13, 2026)).

The decision allows PCA to advance its claims that the salesperson’s move to Welch triggered a 12-month contractual bar on contacting certain customers and that Welch capitalized on those relationships. In rejecting arguments that the restrictive covenant was unenforceable, that no prohibited solicitation occurred, or that any lost business stemmed solely from pricing or market conditions, the court emphasized that Illinois law does not confine enforceable restrictive covenants to near-permanent customer relationships. The court further explained that unresolved factual disputes over customer loyalty, pricing dynamics, and sales attribution can preclude resolution even where the covenant’s language is undisputed.

Non-solicitation agreement. PCA sells corrugated packaging products and acquired Field Packaging Group, whose sales force included the individual defendant. As part of his employment with Field Packaging, the salesperson executed an agreement prohibiting him, for 12 months after a voluntary departure, from soliciting or servicing specified customers of the company. The agreement contained a narrow exception for customers with whom the employee had an ongoing relationship as of the date he began employment.

After PCA acquired Field Packaging’s membership interests, the salesperson continued working under the same agreement. Several years later, he resigned and joined Welch. During the 12-month restricted period, he had contact with several customers that PCA contends were covered by the non-solicitation provision. The company alleges it lost profits from those customers in the year following the employee’s departure.

PCA sued the former employee for breach of contract and Welch for tortious interference, alleging that Welch induced the breach to divert customer business. Early in the litigation, the court entered a temporary restraining order limiting the former employee’s customer contacts while the case proceeded. Following discovery, both defendants sought summary judgment.

Covenant enforceability. A central issue on summary judgment was whether the non-solicitation provision is enforceable under Illinois law. The defendants argued that PCA lacked a legitimate business interest in its customer relationships, asserting that those relationships were transactional rather than enduring.

The court rejected the premise that customer relationships must be near permanent to qualify as protectable interests. Illinois applies a fact-intensive reasonableness analysis that considers whether a covenant is no broader than necessary to protect a legitimate business interest, whether it imposes undue hardship on the employee, and whether it injures the public. The court noted that near permanence may be relevant, but it is not dispositive.

Applying that framework, the court identified multiple disputed facts bearing on whether PCA’s customer relationships warranted protection. The parties disagreed about why customers select one supplier over another, the role of pricing and shipping costs, how long customers typically remain with the company, and how customers reacted to price increases. Those disagreements, the court concluded, directly affect whether the relationships had sufficient continuity or value to support the restriction.

Because enforceability depends on the totality of the circumstances, and because reasonable factfinders could reach different conclusions on the current record, the court held that the validity of the covenant could not be resolved at the summary judgment stage.

Customer contacts. The defendants also contended that no breach occurred because the customers at issue fell within exceptions to the non-solicitation provision. In support, they relied on one exception in the contract and two additional carveouts reflected in the court’s temporary restraining order.

The court drew a clear distinction between the contract and the restraining order. The temporary order, the court found, imposed interim restrictions on conduct but did not modify or expand the contract’s terms. As a result, any exceptions appearing only in the order were irrelevant to determining whether the agreement itself had been breached.

That left the contractual exception for customers with whom the employee had an ongoing relationship when he began employment. The parties disputed how that exception applied. PCA argued that it should be limited to customers the salesperson brought with him at the outset, while the defendants maintained that the plain language encompassed any preexisting relationship regardless of later developments.

The court agreed that the contract’s language did not support importing post-hire requirements into the exception but emphasized that whether specific customer relationships were truly ongoing at the relevant time remained a factual issue. Evidence suggesting that some accounts were not credited to the salesperson or were handled by others could allow a reasonable jury to conclude that the exception did not apply, and, as to two customers for whom the defendants did not contend the exception applied at all, the court found sufficient evidence of post-employment communications to permit a jury finding of breach.

Alleged losses. The defendants further argued that PCA failed to establish causation, pointing to price increases and changes in customers’ businesses as alternative explanations for reduced sales. They also criticized the company’s damages analysis as assuming causation.

The court reiterated that Illinois law permits causation to be shown either by demonstrating that damages would not have occurred but for the breach or that the breach was a substantial factor among multiple causes. On the present record, the court found evidence from which a jury could infer causation, including claimed lost profits from the customers at issue, evidence that customers typically remain with PCA for extended periods, and evidence that Welch made sales to most of those customers during the restricted period.

The court agreed with the defendants as to one customer that never did business with Welch, concluding that no reasonable jury could find that any breach caused PCA’s losses as to that account. However, the remaining claims presented competing factual narratives that could not be resolved on summary judgment.

Interference claim. Welch also sought summary judgment on the tortious interference claim, arguing that it neither induced nor caused any breach. The court rejected that argument, concluding that disputed evidence supported an inference of inducement. The record showed that Welch knew of the restrictive covenant, discussed the salesperson’s customer mix and volume during recruitment, and instructed him to contact customers after he joined the company. Although Welch characterized those actions as legitimate business conduct, the court held that intent and motivation are questions for the jury. If a jury were to find that Welch encouraged conduct violating the agreement, it could also reasonably conclude that the encouragement caused the breach.

The case is No. 19-cv-03286.

Judge: Tharp, J., Jr.

Attorneys: Douglas Alan Albritton (Actuate Law) for Packaging Corporation of America, Inc. Stephen Reid Howe (Husch Blackwell) for Patrick Croner. Andrew Sean Murphy (Taft Stettinius & Hollister) for Welch Packaging Group, Inc.

Companies: Packaging Corporation of America, Inc.; Welch Packaging Group, Inc.

Cases: ContractClaims TortClaims StateLawClaims RemediesDamages IllinoisNews