Tenan v. Strategiq Commerce, LLC et al
Filing
201
OPINION AND ORDER. The Court grants SIQ's motion for summary judgment 176 . The Court enters judgment for SIQ on Tenan's complaint. At the next status hearing, the parties should be prepared to discuss the status of SIQ's counterclaims in light of this Opinion and Order. Signed by the Honorable Sara L. Ellis on 3/5/2019. Mailed notice(rj, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LORI TENAN,
Plaintiff/Counterclaim
Defendant,
v.
STRATEGIQ COMMERCE, LLC,
Defendant/Counterclaim
Plaintiff.
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No. 15 C 5170
Judge Sara L. Ellis
OPINION AND ORDER
After Defendant StrategIQ Commerce, LLC (“SIQ”) terminated Plaintiff Lori Tenan’s
contract, Tenan filed this lawsuit seeking to recover commissions she claims remain due under
that contract. Tenan brings two claims against SIQ: (1) breach of contract for failing to pay
commissions due, and (2) violation of the Illinois Sales Representative Act (the “ISRA”), 820 Ill.
Comp. Stat. 120/0.01 et seq. 1 SIQ filed counterclaims for Tenan’s alleged breach of the same
contract for unauthorized use of SIQ’s confidential information, failure to return confidential
information, and violation of the non-solicitation provision, in addition to claims for breach of
fiduciary duty, tortious interference with prospective economic advantage, and unjust
enrichment. The Court has before it SIQ’s motion for summary judgment on Tenan’s complaint,
which the Court grants. Because the record establishes that Tenan acted as a sales or service
agent for other entities without obtaining SIQ’s consent, which violated her contract and
provided SIQ with cause to terminate the contract, Tenan cannot recover any additional
The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332(a). The parties
have confirmed that they are citizens of different states, providing additional details regarding the
citizenship of SIQ’s members as requested by the Court. See Doc. 189.
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commissions under the contract. And because SIQ does not sell products as required for the
ISRA to apply to Tenan, she cannot recover on her ISRA claim.
BACKGROUND 2
I.
Tenan’s Relationship with SIQ
SIQ provides shipping and delivery solutions to retailers. It analyzes shipping, carrier,
order, tracking, return, and other data for these clients, allowing them to monitor and improve
their shipping and transit processes. SIQ also provides clients with shipping audit and contract
negotiation services. Tenan began working for SIQ in 2008 as a sales representative. Her 2008
employment agreement provided Tenan with a $75,000 per year salary in addition to graduated
commissions capped at 17% on all revenue generated over $1,000,000. In 2012, Tenan’s sales
accounted for approximately one-third of SIQ’s annual revenue generated from sales
representatives. SIQ’s CEO, Jonathan Shaver, advised Tenan that SIQ could not pay her as
contractually obligated and so, with the aid of counsel, SIQ restructured her contract to reduce
the commission rate. After Tenan threatened to sue SIQ for breach of contract, SIQ agreed to
pay Tenan $200,000 and give her the option of working for SIQ as an independent contractor.
On November 2, 2012, Tenan and SIQ entered into an Amended Employment Agreement
(“AEA”), which incorporated an Independent Contractor Sales Agent Agreement (“SAA”). In
May 2013, Tenan notified SIQ of her decision to become an independent contractor pursuant to
the AEA. SIQ continued to compensate Tenan as an employee, however. Shaver did not advise
Rich Kropski, SIQ’s chief operating officer, of this change in Tenan’s employment status, and
Kropski did not believe that Tenan’s job responsibilities changed under the SAA.
The facts in this section are derived from the Joint Statement of Undisputed Material Facts and attached
exhibits. All facts are taken in the light most favorable to Tenan, the non-movant. The Court cites to the
Joint Statement in addition to the exhibits filed at Doc. 174 by exhibit number.
2
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The SAA stated that, as an independent contractor for SIQ, Tenan would provide certain
services to SIQ on a part-time basis. Specifically, she had responsibility for servicing “Client
List Customers,” which included American Apparel, Beachmint, Forever
21, Gilt Groupe, Macy’s, Nestle Corporation, and Zumiez. SIQ agreed to pay Tenan
commissions on the current services it provided to Client List Customers, “Existing Services”
sold to new or existing SIQ customers, and “New Services” Tenan sold to existing or prospective
SIQ customers. The SAA defined “Existing Services” as:
•
•
•
•
•
Shipping Expense Management services including
o Parcel Audit
o Freight Audit
o Freight Allocation Services
Parcel Contract Enhancement Services (support of client
renegotiation of parcel contracts)
Shipping Analytic Services
Outbound Order IQ
o Integration of Order Data to Shipping Data
o Matching Order data to Shipping Data
o Allocation of freight data within an order
Inbound Order IQ
o Integration of P.O. Data
o Inbound import freight audit
o Verification of Trade Compliance
Ex. 3, SAA § 4(c). It also listed the current services provided to Client List Customers, using the
same terminology as in the definition of Existing Services. “New Services” meant “new services
not yet created by [SIQ] as of the Effective Date” of the SAA. SAA § 4(d). The SAA provided
SIQ with a right of first refusal for the sale of any services or solutions similar to SIQ’s Existing
Services that Tenan sought to sell. Tenan also agreed that, during the term of the SAA, she
would not provide services to another person or entity that offered New or Existing Services
without first notifying SIQ in writing and obtaining its consent.
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The SAA included confidentiality and non-solicitation provisions. Specifically, with
respect to confidential information, the SAA stated:
Tenan acknowledges that [SIQ’s] “Confidential Information” (as
defined below) constitutes a protectable interest of [SIQ], and
covenants and agrees that at all times during the period that Tenan
is providing Services to [SIQ], and at all times after Tenan ceases
providing such Services, Tenan will not, directly or indirectly,
disclose, furnish, make available or utilize any Confidential
Information other than in the course of performing the Services.
. . . Tenan’s obligations under this section with respect to particular
Confidential Information will survive expiration or termination of
this [SAA], and will terminate only at such time (if any) as the
Confidential Information in question becomes generally known to
the public other than through a breach of Tenan’s obligations under
this [SAA].
SAA § 5(a). The SAA defined “Confidential Information” as:
any and all confidential, proprietary or trade secret information,
whether disclosed, directly or indirectly, verbally, in writing or by
any other means in tangible or intangible form, applicable to or in
any way related to: (i) the present or future business of [SIQ] or
any of its Affiliates . . . ; (ii) the research and development of the
Company or any of its Affiliates; or (iii) the business of any client
or vendor of [SIQ] or any of its Affiliates.
SAA § 5(b). It gave examples of Confidential Information, including, “plans or strategies for
marketing, development and pricing, business plans, financial statements, profit margins and all
confidential information concerning existing or potential clients, suppliers or vendors.” Id.
Tenan agreed to surrender all Confidential Information, and all “property, client lists, notes,
manuals, reports, documents and other things” in her possession that related to Confidential
Information upon the termination of the SAA. SAA § 5(c). The confidentiality provisions of the
AEA, which mirror those in the SAA, also remained in effect. Under the SAA’s non-solicitation
provision, Tenan agreed not to “utilize [SIQ’s] Confidential Information or any other unlawful
means to solicit any of [SIQ’s] clients or customers at any time during Tenan’s employment with
[SIQ] or during the period that Tenan was providing Services as a Sales Agent.” SAA § 6(b).
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The non-solicitation provision extended for a year after the termination of the SAA, with Tenan
also bound by a similar provision found in the AEA for the same time period.
Although Tenan could terminate the SAA at any time, SIQ could only terminate it “for
cause, at which time Tenan shall immediately cease to be eligible to receive any further
commissions under this [SAA] except as provided by law.” SAA § 10. The SAA defines
“cause” as:
(a)
performing Services intoxicated or under the influence of
illegal drugs;
(b)
substantial and repeated failure to perform material duties,
which is not cured to [SIQ’s] reasonable satisfaction within 30
days after written notice thereof to Tenan . . . ;
(c)
material gross negligence or material willful misconduct
with respect to [SIQ] or any of its Affiliates;
(d)
and
material theft, fraud or embezzlement on the part of Tenan;
(e)
serving as a sales or service agent of Existing Services . . .
or New Services for a competitor of [SIQ] during the term of the
[SAA] without first seeking prior approval from [SIQ].
SAA § 10.
SIQ Client Services Manager Bill Bearden, who directly supervised Tenan at SIQ under
the SAA, testified that Tenan routinely did not respond to his requests for reports, schedules, and
presentation material, or otherwise responded defensively. For example, on July 19, 2013,
Bearden emailed Tenan, expressing concerns he had with her recent performance, noting his
expectation that Tenan would host and lead client calls, and instructing Tenan not to schedule
calls back-to-back or on the same conference line at overlapping times. On the same day,
Bearden also requested information related to scheduled quarterly business review and monthly
service review presentations for certain clients. Bearden followed up on July 23, indicating that
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he needed the information within the hour. Tenan responded the following day, indicating that
her contract did not require her to meet his requests or stated expectations. After Bearden made
a similar request for presentations on August 6, Tenan responded on August 8 that, pursuant to
her role as an independent contractor, she did not need to participate in or lead monthly
operational calls. She attached her independent contractor agreement to the email, but Bearden
did not review the file. Tenan also informed Bearden on August 9 that she did not need to
prepare customer business reviews or provide him with any presentations. She further stated she
would only inform SIQ about the status of meetings and presentations with clients if she
determined such disclosure was best for the client relationship. Tenan similarly informed other
SIQ employees of her independent contractor status and reduced role with SIQ in August.
In February 2011, Tenan forwarded a 600-page document with shipping data from SIQ’s
client American Apparel to Mark Turner, with whom she later worked. In August and
September 2013, she sent copies of SIQ materials from her SIQ email account to her Gmail
account. These documents included an SIQ presentation for Overstock, which was marked
proprietary and confidential and included carrier spend reports and SIQ’s fee, notes on
Nespresso’s needs from SIQ, SIQ’s pricing information, business requirements, and objections,
fee, and negotiations with SIQ client DJO, and information from Zumiez related to orders,
contacts, and returns on investment.
On July 25, August 6, and August 19, 2013, SIQ sent Tenan’s counsel correspondence
that Tenan’s conduct caused disruptions, breached her agreements with SIQ, and posed conflicts
of interest. The letters also reminded Tenan of her confidentiality obligations and that she should
not use her personal computer to conduct SIQ business. In September, Bearden informed Tenan
that her “unpredictable availability, lack of preparedness, and derogatory tone regarding [SIQ]”
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interfered with SIQ’s ability to provide quality services to its customers. Doc. 174 ¶ 40.
Bearden also noted his displeasure with Tenan making a derogatory comment to another SIQ
employee while on a call with a customer. In fall 2013, Tenan filed suit in the Circuit Court of
Cook County, seeking a declaration that she was an independent contractor and not an SIQ fulltime employee. On November 15, 2013, SIQ’s counsel sent written notice to Tenan’s counsel
stating that SIQ had terminated Tenan for cause as of that date for, among other reasons,
“material misrepresentations and improperly soliciting and interfering with clients of [SIQ].” Id.
¶ 89. SIQ also demanded that Tenan return all confidential information to SIQ and cease use of
that information. In January 2014, SIQ again sent a request that Tenan return SIQ’s confidential
information. The Illinois state court overseeing Tenan’s case ordered Tenan to image her
personal computer and share its contents with SIQ shortly thereafter. Tenan received
approximately $160,000 in compensation from SIQ between May and November 2013, with SIQ
paying her all compensation and commissions owed under the Sales Agent Agreement and any
other agreement through November 15, 2013.
II.
Tenan’s Other Sales-Related Work
Tenan founded and owns LST Consulting (“LST”). She also formed LTB Technologies,
LLC (“LTB”) with Brendan Baker in January 2010. Although not involved in LTB’s day-to-day
operations or management, Tenan earned approximately $58,727 from LTB in 2012 and 2013.
In March, April, and June 2013, Baker copied Tenan on emails concerning the sale of envelopes
to a client, with Tenan participating in these discussions in May 2013. Similarly, Baker included
Tenan on an email to Priority Mailing Systems, also known as Neopost, related to LTB’s sales of
envelopes for Neopost on July 24, 2013. Like SIQ, Neopost offers shipping and tracking
solutions, and provides analyses of mail and shipping operations for its clients. In September
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2013, Beachmint, an SIQ customer, emailed Baker at his LTB email address, as well as Tenan,
concerning a purchase order for envelopes. Tenan did not inform SIQ of her involvement in
LTB until December 2017. Tenan, however, did not sell specialty envelopes while working with
SIQ.
Tenan also worked with Postal Advocate, which provides services to customers seeking
to manage their mailing processes, optimize operations, and reduce spending, and which SIQ
considers a competitor with respect to shipping expense management services. On August 5,
2013, Tenan asked Postal Advocate’s president, Adam Lewenberg, to send her the agreement
between LST and Postal Advocate so she could have someone look over the document and begin
selling for Postal Advocate. Lewenberg provided agreements and reminded Tenan of a call with
Aegon the following day. Lewenberg had earlier copied Tenan on an email to Aegon soliciting
Aegon’s business. In December 2013, Lewenberg emailed Tenan to ask her to check on
outstanding invoices for services Postal Advocate provided to Nestle earlier in the year. Later
that month, Lewenberg emailed Tenan indicating that Postal Advocates had made a payment to
LTB for its share from services Postal Advocate provided to Nestle and other customers between
April and September 2013. These services included eliminating mailing equipment insurance
and lost postage recovery services.
In the summer of 2013, Tenan contacted POWA Technologies (“POWA”) about working
as a consultant to sell POWA’s products and services. She worked for POWA from August
2013 to June 2014, entering into an employment and confidentiality agreement on September 20,
2013. Tenan acknowledged that she “probably” reached out to SIQ’s clients in marketing
POWA’s products and services, which is reflected at least in an email she sent to Nespresso
marketing POWA’s Omni channel solution. This technology sought to provide customers with a
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seamless and innovative shopping experience through various channels, with customers able to
order products by taking photos of them or holding up their phones while watching television.
Tenan currently works for Narvar, which provides delivery tracking analytics, SMS
shipping alerts, returns management, feedback collection, and communications services. Tenan
began discussions with Narvar about a consulting agreement in July 2013 and entered into
consulting and confidentiality agreements between Narvar and LST in August and September
2013. She entered into another consulting agreement with Narvar on July 21, 2014, which
defined her duties as helping with pitch presentations, working on pricing arrangements, and
meeting with clients to discuss Narvar’s products and services. The agreement also emphasized
the importance of not performing similar services for other companies. On March 1, 2015,
Tenan entered an employment agreement with Narvar, assuming the position of Vice President
of Sales.
In September 2013, Amit Sharma, Narvar’s founder and CEO, sent Narvar’s pricing tier
information to Tenan. Sharma and Tenan pitched Narvar’s tracking services to Zumiez, with
Tenan creating a presentation for Zumiez and answering questions from Zumiez’s
representatives. Zumiez contracted with Narvar and implemented its services on November 27,
2013. Tenan also contacted Nespresso to present Narvar’s services and pricing to it in
September 2013. That same month, she created a presentation for Macy’s, eventually winning
its business.
Between August 18, 2014, and March 2015, Tenan also provided services to Attraqt, Inc.
In September 2014, she exchanged emails with Turner about a draft agreement between Attraqt
and Forever 21, an SIQ customer. She also participated in the pitch meeting with Forever 21,
presenting both Attraqt’s and Narvar’s services.
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While Tenan worked for SIQ, SIQ marketed certain services to American Apparel and its
employee, Spencer Smith, including shipping administration services, freight auditing services,
shipping expense management services, and import and export trade compliance and audit
services. Smith eventually left American Apparel to work for Beachmint. Smith retained both
Narvar and SIQ while at Beachmint because he understood them to provide different services,
with Narvar providing consumer-facing communication and SIQ providing back office audits
and cost savings measures.
Tenan did not inform SIQ until December 2017 that she had conducted business through
or for LTB, LST, Neopost, Postal Advocate, POWA, and Narvar while working with SIQ. Nor
did she inform SIQ until then that she had marketed other companies’ services to Beachmint,
Gilt, Nestle, Nespresso, Macy’s, or Zumiez.
LEGAL STANDARD
Summary judgment obviates the need for a trial where there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56.
To determine whether a genuine issue of fact exists, the Court must pierce the pleadings and
assess the proof as presented in depositions, answers to interrogatories, admissions, and
affidavits that are part of the record. Fed. R. Civ. P. 56 & advisory committee’s notes. The party
seeking summary judgment bears the initial burden of proving that no genuine issue of material
fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265
(1986). In response, the non-moving party cannot rest on mere pleadings alone but must use the
evidentiary tools listed above to identify specific material facts that demonstrate a genuine issue
for trial. Id. at 324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000). Although a
bare contention that an issue of fact exists is insufficient to create a factual dispute, Bellaver v.
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Quanex Corp., 200 F.3d 485, 492 (7th Cir. 2000), the Court must construe all facts in a light
most favorable to the non-moving party and draw all reasonable inferences in that party’s favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
ANALYSIS
I.
Breach of Contract
SIQ seeks summary judgment on Tenan’s breach of contract claim, arguing that because
Tenan materially breached the contract, it does not owe her the commissions she seeks. To
prevail on her breach of contract claim, Tenan must prove (1) the existence of a valid,
enforceable contract; (2) her performance of all required conditions under the contract; (3) SIQ’s
breach of the contract; and (4) resulting injury. Henderson-Smith & Assocs., Inc. v. Nahamani
Family Serv. Ctr., Inc., 752 N.E.2d 33, 43, 323 Ill. App. 3d 15, 256 Ill. Dec. 488 (2001).
SIQ argues that Tenan materially breached the SAA and cannot show that SIQ breached
the contract. Specifically, SIQ contends that Tenan breached the SAA by (1) selling Existing
and New Services for other entities without SIQ’s consent; (2) failing to offer SIQ a right of first
refusal for various sales opportunities; (3) violating the confidentiality provision by taking,
disclosing, and refusing to return SIQ’s Confidential Information; (4) soliciting SIQ’s customers
using SIQ’s Confidential Information; and (5) failing to perform the sales duties set forth in the
SAA. SIQ also argues that Tenan breached the AEA by engaging in other business activities
without disclosing them to SIQ, a violation SIQ claims barred Tenan from exercising her option
to enter into the SAA. Tenan does not contest the materiality of any of these alleged breaches
and instead argues that fact questions prevent the entry of judgment.
The Court need only address whether Tenan served as a sales or services agent of New or
Existing Services for an SIQ competitor during the term of the SAA without seeking prior
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approval from SIQ between May 2013 and November 15, 2013. Tenan first argues that the
Court cannot find for SIQ on summary judgment because the terms New and Existing Services
are ambiguous, leaving questions of fact as to which services fall within these categories. A
contract “is to be construed as a whole, giving effect to every provision, if possible, because it
must be assumed that every provision was intended to serve a purpose.” Cent. Ill. Light Co. v.
Home Ins. Co., 821 N.E.2d 206, 213, 213 Ill. 2d 141, 290 Ill. Dec. 155 (2004). Although Tenan
appears to claim the term Existing Services is “obscure in meaning through indefiniteness of
expression,” id. (quoting Platt v. Gateway Int’l Motorsports Corp., 813 N.E.2d 279, 283, 315 Ill.
App. 3d 326, 286 Ill. Dec. 222 (2004)), the SAA explicitly defines Existing Services by
providing an enumerated list of qualifying services. It also lists which of the Existing Services
each of Tenan’s existing clients used. And while Tenan further claims the definition would be
difficult for someone to understand, she offers only conclusory arguments without suggesting
different interpretations for the terms in question. Without a basis to find a specific ambiguity
and instead presented with an enumerated list of Existing Services, the Court applies the plain
meaning of these terms in line with industry usage. Va. Sur. Co. v. N. Ins. Co. of N.Y., 866
N.E.2d 149, 153, 224 Ill. 2d 550, 310 Ill. Dec. 338 (2007) (“If the contract language is
unambiguous, it should be given its plain and ordinary meaning.”); Intersport, Inc. v. Nat’l
Collegiate Athletic Ass’n, 885 N.E.2d 532, 539, 381 Ill. App. 3d 312 219 Ill. Dec. 261 (2008)
(“Contract terms should also be interpreted in accordance with the custom and usage of those
particular terms in the trade or industry of the parties. . . . [T]he contract terms need not be found
to be ambiguous before evidence of the custom and usage of the terms in the parties’ trade or
practice can be considered.”). 3
The Court need not address Tenan’s argument that New Services is also an ambiguous term, where SIQ
does not argue that Tenan violated the SAA by selling any New Services for another entity. Indeed, SIQ
3
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Alternatively, Tenan argues that the Court must carefully consider whether she had
opportunities to sell Existing Services, as defined in the SAA, for companies aside from SIQ
during the term of the SAA. She claims the undisputed facts do not establish any such
opportunities, but she does so without addressing each of SIQ’s examples. Having reviewed the
record, the Court finds that Tenan violated the SAA by selling Existing Services for both Narvar
and Postal Advocate but that questions of fact prevent the Court from making the same
determination with respect to Neopost and POWA. The questions surrounding these two
companies do not preclude a finding that Tenan violated the SAA where one such violation
suffices.
A.
Narvar
On August 28, 2013, while the SAA was in force, Tenan entered into a consulting
agreement with Narvar. She agreed to provide “sales services for Narvar White Label Tracking
Interact, Return Portal Interface, [and] Vendor Portal,” with the agreement excluding “any
freight audits or other services provided by [SIQ].” Ex. 46 at Tenan’s HD 00217. Despite the
inclusion of this language in the consulting agreement, Tenan engaged with customers to sell
Narvar’s tracking solutions, which included shipping, delivery, and return information. SIQ
provided similar services to Narvar, which amounted to Shipping Analytic Services and
therefore Existing Services under the SAA. Specifically, in September 2013, Tenan revised a
presentation for Zumiez on Narvar’s tracking services. Later in the fall, Narvar entered into a
contract to provide its tracking services to Zumiez, fully implementing Narvar’s solution on
November 27, 2013. Also in September 2013, Tenan presented shipping and tracking solutions
does not provide any evidence of any additional services it had not created at the time Tenan invoked the
SAA that Tenan thereafter sold for another entity during the term of the SAA.
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from both SIQ and Narvar to Nespresso. She delivered a presentation like that she created for
Zumiez to Macy’s. After further discussions, Macy’s became one of Narvar’s clients.
Tenan argues that Narvar provided customers with a consumer-facing branded tracking
platform, which differs from SIQ’s back-end analysis of shipping information. But it is
undisputed that SIQ provides clients with shipping, tracking, delivery, and return information,
with additional monitoring capabilities. While Narvar may provide additional services that SIQ
does not, this does not change the fact that they both provide customers with Shipping Analytic
Services, which Tenan pitched for Narvar without obtaining SIQ’s consent. The language used
in Tenan’s consulting agreement with Narvar, fashioned by counsel, does not absolve her from
this breach of the SAA, where Tenan’s actions demonstrate that she provided services beyond
those contemplated by her Narvar agreement. Therefore, the Court finds that, having failed to
obtain SIQ’s consent, Tenan’s work for Narvar properly served as a basis for SIQ to terminate
the SAA and for judgment in SIQ’s favor.
B.
Postal Advocate
While the SAA was in effect, Tenan worked to sell Postal Advocate’s services to, among
others, Nestle. Postal Advocate helps companies manage their mailing processes, optimize
operations, and reduce spending by, among other things, identifying vendor overcharges. Tenan
does not dispute that Postal Advocate’s services are the same or substantially similar to the
SAA’s Shipping Expense Management services, which include Parcel and Freight Audit service
and Freight Allocation Services. In December 2013, Tenan received payment for services she
rendered to Postal Advocate through LTB and/or LST Consulting and which were invoiced to
clients between May and September 2013. The invoices covered vendor credits and other fee
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savings that Postal Advocate obtained for its clients. 4 Also, in July 2013, Tenan was copied on
an email to a Postal Advocate potential client, which laid out reasons for that company to work
with Postal Advocate to reduce mailing equipment costs, including by eliminating avoidable
fees, contract overcharges, and lost postage. These services undisputedly fall within Existing
Services.
Tenan argues, however, that LTB provided the services to Postal Advocate, and that she
had no day-to-day involvement in LTB. But in August 2013, she received draft contracts to
memorialize the work she performed for Postal Advocate. And Postal Advocate directed
questions and payment to Tenan, further establishing more than just passive involvement with
Postal Advocate. Tenan’s work with Postal Advocate without obtaining SIQ’s consent thus
provides another basis for finding for SIQ.
C.
Neopost
Neopost offers shipping and tracking solutions to customers, including analytics for
managing costs and determining incorrect addresses and lost packages. These services are the
same or substantially similar to those offered by SIQ as Shipping Expense Management
Services. Tenan and LTB worked with Neopost in July 2013 to sell envelopes to a client. But
the products they marketed on Neopost’s behalf, envelopes, are not covered as Existing Services.
Tenan also never sold envelopes for SIQ nor does SIQ present evidence that the sale of
envelopes amounts to a New Service covered by the SAA. Although Neopost’s overall business
competed with SIQ’s Existing Services, by the terms of the SAA, she could sell envelopes for
Tenan attempts to characterize LTB’s work for Postal Advocates as involving the sale of Pitney Bowes
postage machines. See Doc. 183 at 3. But the invoices reflect expense management services provided to
Postal Advocates’ clients, such as eliminating unneeded equipment insurance and recovery of lost postage
funds, not the sale of tangible postage machines.
4
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Neopost without having to obtain SIQ’s consent. Therefore, the Court cannot find that Tenan’s
work with Neopost provided a basis for SIQ’s termination of the SAA.
D.
POWA
Although SIQ argues that Tenan sold competing services for POWA, it does not provide
sufficient evidence for the Court to conclude that Tenan’s work for POWA directly competed
with any of SIQ’s Existing Services. Tenan did enter into a consulting agreement, and later an
employment agreement, with POWA, but these agreements do not specify the types of services
she marketed for POWA. While Tenan did reach out to Nespresso in September 2013 about
POWA’s Omni channel solution, the record does not sufficiently support that such a solution
amounts to an Existing Service. Indeed, Tenan’s email to Nespresso suggests that POWA’s
technologies addressed customers purchasing products in innovative ways, not any shipping or
delivery solutions. Therefore, based on the record before it, the Court finds a dispute exists over
whether Tenan sold Existing Services for POWA. But this dispute does not require a trial, where
the record establishes that she marketed and sold Existing Services for Narvar and Postal
Advocate during the term of the SAA without obtaining SIQ’s consent. And, based on the
SAA’s clear language, these violations of the SAA provide a basis for SIQ’s termination of the
SAA for cause and prevents Tenan from recovering the additional commissions she seeks.
II.
ISRA Claim
Next, SIQ argues that the ISRA does not provide Tenan with a remedy for unpaid
commissions because the ISRA does not cover the services she sold for SIQ. The ISRA requires
“principals” to pay commissions due to their sales representatives according to a specified
schedule. The ISRA defines “principal” as “a sole proprietorship, partnership, corporation or
other business entity . . . which . . . [m]anufactures, produces, imports, or distributes a product
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for sale.” 820 Ill. Comp. Stat. 120/1(3)(A). Courts have held that the statutory language used to
define principal demonstrates that the ISRA “applies only to the sale of tangible goods, not the
sale of services.” Allen v. Giannecchini, No. 08 C 6589, 2010 WL 8034236, at *4 (N.D. Ill.
Sept. 7, 2010); see Springhead, LLC v. Solution Publ’g, LLC, No. 13 C 436, 2015 WL 1280702,
at *3 (N.D. Ill. Mar. 18, 2015) (collecting cases holding that “product” refers to “tangible,
manufactured goods, not [to] intangible items or services” (alteration in original) (citation
omitted)).
Here, SIQ provides shipping expense management and analytic services to its clients. No
evidence exists in the record of SIQ selling tangible goods, like envelopes, postal meters, or
toner cartridges. Tenan argues that her position at SIQ involved the sale of both services and
goods, however, because SIQ clients bought reports from SIQ in conjunction with SIQ’s other
services. But as another court in this district noted, “[s]imply because [SIQ] may provide some
of this . . . information to clients in the form of a data file does not transform that service into a
tangible good,” or, in other words, “the means by which [SIQ] communicates information with
its clients does not change the fact that [SIQ] is doing something, as opposed to making
something.” Springhead, 2015 WL 1280702, at *3. Because the reports SIQ generated were
incidental to the services it provided, these reports do not transform SIQ into a principal bound
by the ISRA. See Johnson v. Safeguard Constr. Co., 3 N.E.3d 879, 883, 2013 IL App (1st)
123616, 378 Ill. Dec. 314 (2013) (concluding that the ISRA did not apply where any tangible
goods provided by defendant were “merely incidental to the services provided”). Therefore,
Tenan cannot recover the commissions she seeks under the statute.
17
CONCLUSION
For the foregoing reasons, the Court grants SIQ’s motion for summary judgment [176].
The Court enters judgment for SIQ on Tenan’s complaint. At the next status hearing, the parties
should be prepared to discuss the status of SIQ’s counterclaims in light of this Opinion and
Order.
Dated: March 5, 2019
______________________
SARA L. ELLIS
United States District Judge
18
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