REGAL BELOIT CORP V. DRECOLL / TO COMPETE OR NON-COMPETE
Strategy: Relentlessly leverage your opponent’s bad facts.
Key executives of our client, a major auto component parts manufacturer, after being actively involved in acquisition negotiations with a target competitor company, left and surreptitiously acquired the target to compete directly with prior employer. Unfortunately, our client lacked non-competes or contractual restraints on the departing executives’ ability to compete. We presented the court with evidence proving that the departing executives had used trade secret information of the client and usurped a corporate opportunity of the client by diverting the acquisition for their personal benefit to the detriment of our client, causing the court to enjoin the defendant executives from competing with their former employer for an extended period. This precedent established the usurpation of a corporate opportunity as a viable claim even where contractual non-competes are not in place. The trial court injunction was affirmed on appeal. Regal Beloit Corporation v. Drecoll 955 F. Supp 849 (N.D. Ill. 1996).
