Western Union Company V. Tom Kula

Filing 125

MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 7/12/2017:Mailed notice(kef, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WESTERN UNION COMPANY and
WESTERN UNION, LLC,

)
)
)
Plaintiffs,
)
)
vs.
)
)
TOM KULA and PAYMENTUS GROUP, )
INC.,
)
)
Defendant.
)

Case No. 17-CV-00280
Hon. Amy J. St. Eve

MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
Defendant Tom Kula (“Kula”) has moved for summary judgment on Counts III, IV, and
V of Plaintiffs Western Union Company and Western Union, LLC’s (collectively “Plaintiffs” or
“Western Union”) Complaint alleging claims for misappropriation of trade secrets, breach of
contract, and tortious interference with contract. (R. 86, Def’s. Mem. of Law in Support of Mot.
for Summ. J.) For the following reasons, the Court denies Kula’s motion for summary judgment.
BACKGROUND
This case arises from Defendant Kula’s departure from Western Union and his alleged
subsequent recruitment of Western Union clients for his new employer, Paymentus Group, Inc.
(“PGI”). Western Union has sued Kula for misappropriation of trade secrets, breach of the noncompete and confidentiality provisions in his restrictive covenant contract, and tortious
interference with Western Union’s contractual relations with its customers. (R. 1, Compl.)1

1

Subsequent to the filing of this motion, the Court granted Plaintiffs’ Motion to Amend the Complaint. (R. 108.)
Those amendments, however, are not relevant to this motion.

1

I.

Kula’s Employment at Western Union
Kula initially began working at Western Union in 1993, and after a period during which

he worked elsewhere, Western Union rehired him in October 2000. (R. 86, Ex. 1 Def.’s
Statement of Facts ¶ 8.) Beginning in 2008, Kula was the Vertical Vice President, Payment
Sales at Western Union. (Id. ¶ 9.) On May 9, 2016, Kula’s supervisor, Michelle Young, gave
Kula a written letter warning him that, due to the loss of two substantial Western Union clients,
any future instances of “lost revenue, neglected client relationships, team leadership or any noncompliance with Company policies . . . will result in further disciplinary action up to and
including the termination of your employment.” (R. 86, Ex. 3 Warning Letter.) Carter Hunt was
Young’s supervisor, and he approved Young’s delivery of the warning letter to Kula although he
had never given a similar written warning to any other Western Union employee. (Def.’s
Statement of Facts ¶¶ 13-14.)
Kula submitted his resignation on July 11, 2016. (Id. ¶ 15.) Kula claims that he notified
both Michelle Young, his former supervisor, and Frank Lockridge, his supervisor at the time,
that he was leaving for a non-sales position at PGI.2 (Id. ¶ 15, Ex. 2 Kula Dec. ¶ 6.) Kula’s last
day of employment at Western Union was July 22, 2016, and after leaving Western Union, he
began working at PGI as Vice President of Implementation Services. (Def.’s Statement of Facts
¶¶ 16, 18.) PGI initially offered Kula the position of Vice President of Sales, but he requested a
different role. (R. 109, Ex. B Tom Kula Deposition 186: 13-24.) Regardless, at PGI, Kula
reports to a senior manager responsible, at least in part, for the Sales Group. (Id. 125: 1-11, 172:
7-12.)
II.

Kula’s 2015 Restrictive Covenant Agreement

2

Western Union claims that Kula did not inform Young or Lockridge that he was going to work for PGI. Lockridge
and Young have not testified, but Carter Hunt testified that Young and Lockridge did not know that Kula was going
to work for PGI. (R. 109, Ex. A Carter Hunt Deposition 18: 10-17.)

2

During his term of employment at Western Union, Kula entered into multiple
compensation and employment agreements. (Def.’s Statement of Facts ¶ 19.) The 2015
Restrictive Covenant Agreement (“2015 “RCA”) includes various post-employment restrictive
covenants, including obligations relating to confidentiality, non-solicitation, and noncompetition. (Id. ¶ 20; see also R. 86, Ex. 6 2015 RCA.) The 2015 RCA provides that Delaware
law governs its terms. (Def.’s Statement of Facts ¶ 22.) The 2015 RCA further states that the
consideration Western Union provided for the RCA is “employment or continued employment,”
an award pursuant to the 2015 Long-Term Incentive Plan (“2015 LTIP”), and other “good and
valuable consideration.” (Def.’s Statement of Facts ¶ 23; see also 2015 RCA 1.)
The parties dispute whether Kula accepted the 2015 RCA. Western Union has not
identified a physically signed copy of the 2015 RCA, and Kula testified that he did not
physically sign the 2015 RCA or electronically accept it. (Def.’s Statement of Facts ¶¶ 25-27.)
Western Union, on the other hand, claims that Kula accepted the RCA through its electronic
signature process on May 13, 2016. (R. 109, Pls.’ Resp. to Def.’s Statement of Facts 7: 27; Ex.
C Tracy McKee June 20, 2017 Declaration (“McKee Declaration”)3 ¶ 4.) Western Union
transitioned from ink signatures to electronic acceptance of RCAs and other agreements about 10
years ago. (Pls.’ Resp. to Def.’s Statement of Facts 19: 4.)
When a Western Union employee receives a vested stock grant requiring acceptance of
an RCA, the employee receives an email notifying him of this fact and providing instructions on
3

There are two Tracy McKee declarations: (1) McKee’s May 3, 2017 declaration submitted as an exhibit to Western
Union’s Motion for a Preliminary Injunction and (2) McKee’s June 20, 2017 declaration, a more detailed declaration
with new supporting exhibits, which Western Union submitted as an exhibit to its Opposition to Kula’s Motion for
Summary Judgment. For purposes of this motion, the “McKee Declaration,” refers to the June 20, 2017 declaration.
Kula argues that the Court should strike the June 20, 2017 declaration and its exhibits as untimely, but given the
constant competing discovery disputes between the parties and the expedited discovery schedule pursuant to the
preliminary injunction, the Court will, in its discretion, consider McKee’s June 20, 2017 declaration for purposes of
this summary judgment motion, which Defendant filed in advance of the preliminary injunction hearing. The Court
notes that while McKee’s two declarations contain different specific facts and exhibits, they both state that Western
Union’s internal records indicate that Kula accepted the 2015 RCA in May 2016.

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how to accept the RCA. (Def.’s Statement of Facts ¶ 29.) Tracy McKee, Western Union’s
Compensation Director, testified that Merrill Lynch, the administrator of its benefits, sent Kula a
notification that he had to accept the grant on its benefits website and that the stock award was
subject to the terms and conditions of his award agreement. (McKee Declaration ¶ 10; Ex. 3
Notification of Grant Award.) Kula could only access his grant award using a unique username
and password. (McKee Declaration ¶ 13.) Western Union has produced internal records
indicating that Kula accepted a stock award of 3,295 units of Western Union stock and the 2015
RCA on the Merrill Lynch benefits website on May 13, 2016 at 3:26 PM. (Pls.’ Resp. to Def.’s
Statement of Facts 11: 34-35; R. 86, Ex. 9 Tom Kula Grant Award.) When he officially resigned
from Western Union on June 22, 2016, his stock ceased to vest pursuant to the 2015 LTIP. (Pls.’
Resp. to Def.’s Statement of Facts 7: 28.) Kula has never received any vested stock in
connection with the 2015 RCA or 2015 LTIP. (Def.’s Statement of Facts ¶ 28.) Kula claims that
there are no emails or screenshots demonstrating that he electronically accepted the RCA. (Id. ¶¶
31-33.) Kula further contends that these records demonstrate only acceptance of the stock award
and do not include any language stating that accepting the stock award required the acceptance
of the RCA. (Id. ¶ 36.) Kula does not recall accepting the RCA. (Kula Deposition 13: 19-21.)
According to McKee, however, Merrill Lynch’s benefits website requires4 that
employees open and accept the agreements associated with any stock award that they accept.
(McKee Declaration ¶¶ 20-24.) The Merrill Lynch website prompts all employees to “view the

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Kula contends that the McKee Declaration and the exhibits to that declaration only described how the Merrill
Lynch benefits system worked in 2017 for Colorado employees because McKee, a Colorado employee, only
accessed the system at that time. (R. 114, Def.’s Resp. to Pls.’ Additional Facts ¶¶ 8-9.) While Kula is correct that
the June 20, 2017 McKee Declaration did not provide exhibits regarding the Merrill Lynch benefits system for Kula
in May 2016, Western Union contends, and McKee has testified, that the Merrill Lynch platform had the same
requirements regarding the viewing and accepting of agreements and stock awards in 2016 as it did in 2017. (R. 86,
Def.’s Mem. of Law in Support of Mot. for Summ. J., Ex. 8 May 3, 2017 Tracy McKee Declaration ¶¶ 7-9.) The
Court recognizes the parties’ dispute regarding the evidence describing the Merrill Lynch benefits system, but for
purposes of providing background, accepts McKee’s description of the system in her June 20, 2017 declaration.

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Grant Documents [including the RCA] before making a [stock award] election.” (Pls.’ Resp. to
Def.’s Statement of Facts 20: 9.) Merrill Lynch’s records demonstrate that Kula reviewed the
RCA and other grant documents at approximately 3 PM on May 13, 2016. (McKee Declaration
¶ 23.) McKee testified that Merrill Lynch’s system would not permit Kula, or any other
employee, to accept their stock award without clicking a button and entering a password
indicating that he accepted all the employment agreements. (Id. ¶¶ 25, 27.)
Additionally, when PGI was recruiting Kula, they asked him if he had any agreements
with Western Union that would limit his employment with PGI. (Kula Deposition 15: 8-13.) In
response, Kula provided PGI with the 2015 RCA. (Id. 16: 21-23.) Kula testified that he
provided PGI with the 2015 RCA, but when he did so, he did not know if that agreement was
valid or enforceable. (Id.)
The stock award Kula accepted on May 13, 2016 was provided pursuant to the 2015
LTIP. (Def.’s Statement of Facts ¶ 40.) The 2015 LTIP does not mention the 2015 RCA and it
does not contain any language indicating that an employee must agree to the 2015 RCA as part
of accepting a stock award. (Id. ¶ 39.) LTIPs from prior years included explicit language
indicating that an employee had to accept an RCA before receiving a stock award, but the 2015
LTIP did not contain that language. (Id. ¶¶ 39, 41.) The 2015 RCA, however, explicitly
references and incorporates the 2015 LTIP as consideration for its obligations. (See 2015 RCA 1
(“In consideration of employment or continued employment by the Company, the grant to
Employee of an award pursuant to The Western Union Company 2015 Long-Term Incentive
Plan (incorporated herein by this reference). . .”))
III.

Kula’s 2016 Variable Compensation Plan

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The 2016 Variable Compensation Plan (“2016 VCP” or the “Plan”) provided for
additional compensation for sales employees who met certain performance requirements. (Id. ¶
42.) The 2016 VCP contained restrictive covenants that are separate from, but similar to, the
2015 RCA’s restrictive covenants. (Id. ¶ 44.) The 2016 VCP, for example, used slightly
different language to describe employees’ obligations and also did not contain any noncompetition obligations. (Id.) The 2016 VCP provided that “[a]pplicable state law governs the
validity, construction, interpretation, administration, and effect of this Plan.” (R. 86, Ex. 11 2016
VCP § 8.) The Plan also provided that it “cancels, supersedes and replaces all previous
compensation plans or arrangements (either verbal or written) in which [the employee]
previously participated.” (2016 VCP 3.) Kula accepted the 2016 VCP and it was effective from
January 1, 2016 until Kula left Western Union on July 22, 2016. (Def.’s Statement of Facts ¶¶
47-49.) He repeatedly received payments pursuant to the Plan through the end of his
employment with Western Union in June 2016. (Id. ¶ 48.)
IV.

Alleged Tortious Interference
Kula claims that Western Union has not identified any Western Union customers who

breached their contracts with Western Union due to Kula’s actions. (Id. ¶¶ 50-53.) Carter Hunt,
however, testified that Western Union suspects that Kula interfered with its contractual
relationship with at least one client, BFGW Investments. (Hunt Deposition 55: 10-15.) BFGW
was one of Kula’s accounts at Western Union, and PGI acquired BFGW as a client after Kula
moved to PGI. (Id. 51: 14-20.) Western Union has not determined whether BFGW breached its
contract with Western Union. (Id. 55: 16-23.)5

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Western Union asserts that it has not conducted full discovery on its tortious interference claim because the Court
has only ordered limited discovery related to the preliminary injunction, and Western Union did not move for a
preliminary injunction on the tortious interference claims. (Pls.’ Resp. to Def.’s Statement of Facts 23: 20.)

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LEGAL STANDARDS
I.

Federal Rule of Civil Procedure 56
Summary judgment is appropriate when the record, viewed in the light most favorable to

the non-moving party, reveals that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Zaya v. Sood, 836
F.3d 800, 804 (7th Cir. 2016). A genuine issue of material fact exists when “the evidence is such
that a reasonable jury could return a verdict for the nonmoving party.” Id. (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599
(7th Cir. 2000) (“The existence of a mere scintilla of evidence supporting a plaintiff’s position is
insufficient; there must be evidence on which a jury could reasonably find for the plaintiff.”). In
ruling on a motion for summary judgment, the court must consider the record as a whole, in the
light most favorable to the non-moving party, and draw all reasonable inferences in favor of the
non-moving party. Anderson, 477 U.S. at 255.
The party seeking summary judgment has the initial burden of showing that there is no
genuine dispute and that it is entitled to judgment as a matter of law. Carmichael v. Vill. of
Palatine, 605 F.3d 451, 460 (7th Cir. 2010). If the moving party demonstrates the absence of a
disputed issue of material fact, “the burden shifts to the non-moving party to provide evidence of
specific facts creating a genuine dispute.” Carroll v. Lynch, 698 F.3d 561, 564 (7th Cir. 2012).
The non-movant must go beyond the pleadings and “set forth specific facts showing there is a
genuine issue for trial.” Hannemann v. S. Door Cty. School Dist., 673 F.3d 746, 751 (7th Cir.
2012).
II.

Northern District of Illinois Local Rule 56.1

Western Union also notes that PGI’s corporate representative refused to answer deposition questions about PGI’s
efforts to obtain business from Western Union customers. (Id. 23: 21.)

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Northern District of Illinois Local Rule 56.1 governs how the parties identify material
facts and potential disputed material facts. “The purpose of Rule 56.1 is to have the litigants
present to the district court a clear, concise list of material facts that are central to the summary
judgment determination. It is the litigants’ duty to clearly identify material facts in dispute and
provide the admissible evidence that tends to prove or disprove the proffered fact.” Curtis v.
Costco Wholesale Corp., 807 F.3d 215, 219 (7th Cir. 2015). Local Rule 56.1(a) “requires the
party moving for summary judgment to file and serve a ‘statement of material facts as to which
the moving party contends there is no genuine issue and that entitle the moving party to a
judgment as a matter of law.’” Id. at 218 (citation omitted). “The non-moving party must file a
response to the moving party’s statement, and, in the case of any disagreement, cite ‘specific
references to the affidavits, parts of the record, and other supporting materials relied upon.’”
Petty v. Chicago, 754 F.3d 415, 420 (7th Cir. 2014) (citation omitted); see also L.R.
56.1(b)(3)(A). Local Rule 56.1(b)(3)(C) requires the non-moving party to file a separate
statement of additional facts. See Thornton v. M7 Aerospace LP, 796 F.3d 757, 769 (7th Cir.
2015).
Local Rule 56.1 statements and responses should identify the relevant admissible
evidence supporting the material facts – not make factual or legal arguments. See Zimmerman v.
Doran, 807 F.3d 178, 180 (7th Cir. 2015). “When a responding party’s statement fails to dispute
the facts set forth in the moving party’s statement in the manner dictated by the rule, those facts
are deemed admitted for purposes of the motion.” Curtis, 807 F.3d at 218 (quoting Cracco v.
Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009)). The Seventh Circuit “has consistently
upheld district judges’ discretion to require strict compliance with Local Rule 56.1.” Flint v.
City of Belvidere, 791 F.3d 764, 767 (7th Cir. 2015).

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ANALYSIS
I.

Counts III and IV
Western Union’s Complaint bases both Counts III and IV on Kula’s breach of the 2015

RCA. Kula argues that the Court should grant summary judgment in his favor on both counts
because (1) Kula never executed the 2015 RCA and (2) the 2016 VCP superseded the 2015
RCA. The Court addresses each argument in turn.
A. Kula’s Alleged Acceptance of the 2015 RCA
Kula first argues that he never accepted the 2015 RCA. The parties do not dispute that
Kula never physically signed the 2015 RCA, so this argument turns on whether there is a
genuine factual dispute as to whether Kula electronically accepted the 2015 RCA and if so,
whether this electronic acceptance was sufficient.
“Ordinarily one of the acts forming part of the execution of a written contract is the
signing of it.” Russell v. Dart, No. 14-CV-4683, 2015 WL 1502926, at *3 (N.D. Ill. Mar. 26,
2015) (citations and quotations omitted) aff’d sub nom. Russell v. Cook Cnty., 661 F. App’x 443
(7th Cir. 2016). Electronic signatures and clicking “Accept,” however, “are valid means of
expressing assent to a contract.” Mikhak v. Univ. of Phoenix, No. C16-00901 CRB, 2016 WL
3401763, at *6 (N.D. Cal. June 21, 2016). Courts typically find electronic acceptance of an
agreement sufficient to support a valid contract where the party had “reasonable notice of the
terms” of the agreement and manifested assent to the agreement by clicking “Accept.” Sgouros
v. TransUnion Corp., No. 14 C 1850, 2015 WL 507584, at *4 (N.D. Ill. Feb. 5, 2015), aff’d, 817
F.3d 1029 (7th Cir. 2016).
Applying these rules, courts have found restrictive covenant agreements enforceable
where the employee had to accept the agreement online to receive a stock award. In ADP, LLC

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v. Lynch, No. 2:16-01053 (WJM), 2016 WL 3574328, at *4-5 (D.N.J. June 30, 2016), aff’d, No.
16-3617, 2017 WL 496089 (3d Cir. Feb. 7, 2017), for example, the plaintiff brought suit against
the defendants for violating their restrictive covenant agreements, and the defendants argued that
the agreements were not valid because they had not physically signed the agreements, they did
not read the agreements, and because the plaintiff did not have screenshots indicating that the
individual employees had accepted the agreements. The court rejected the defendants’
arguments and explained that the defendants were required to acknowledge that they had read
and accepted the restrictive covenants before accepting stock grants pursuant to their
compensation plan. Id. at *4. The court found that the “clickwrap agreement”—an agreement
that requires a computer user to affirmatively manifest assent to the terms of a contract by
clicking an icon—was enforceable because the plaintiff alleged and witnesses testified “that an
employee could not accept any stock grants until acknowledging that he or she reviewed all grant
documents, including the Restrictive Covenants. . .” Id. at *4-5.
Similarly, in Newell Rubbermaid Inc. v. Storm, No. CV 9398–VCN, 2014 WL 1266827,
at *2 (Del. Ch. Mar. 27, 2014), the plaintiff sought a temporary restraining order against its
former employee to prevent her from violating non-solicitation and confidentiality agreements
that were part of stock award agreements that it alleged she assented to through a clickwrap
agreement on a third-party website. The court found that the agreements were enforceable
because the third-party website included a box titled “Grant Terms and Agreement” that stated,
“[y]ou must read your Grant Agreement and review the terms to continue,” the agreement was
available in a hyperlink, and to accept her stock award, the employee had to check a box that
read “I have read and agree to the terms of the Grant Agreement.” Id. The court rejected the
employee’s argument that the agreements were unenforceable because she did not read them,

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noting that “she was presented with a fair opportunity to do so” and “even indicated through the
checkbox that she did so.” Id. at *8. The court also noted that there was nothing improper about
conditioning the stock award grant on her acceptance of the restrictive covenants. Id. See also
Tabliabue v. J.C. Penney Corp., 15-cv-01443-SAB, 2015 WL 8780577, at *2 (E.D. Cal. Dec. 15,
2015) (finding that an electronic signature is sufficient to render a valid arbitration contract);
Fteja v. Facebook, Inc., 841 F. Supp. 2d 829 (S.D.N.Y. 2012) (finding clickwrap agreement
enforceable where the agreement terms were readily available to the user, but there was no
mechanism that forced the user to actually read them); DeJohn v. The .TV Corp. Int’l, 245 F.
Supp. 2d 913, 920 (N.D. Ill. 2003) (finding consumer clickwrap agreement enforceable).
Here, Western Union has produced evidence that indicates that the third-party benefits
system at issue in this case was very similar to those utilized in Newell and Lynch. Tracy
McKee, Western Union’s Compensation Director, testified that under Merrill Lynch’s benefits
system, the Merrill Lynch platform that Western Union employees had to use to accept their
stock awards provided access to the RCA as well as other documents related to the stock award.
(McKee Declaration ¶¶ 20-23.)6 On the page containing the RCA, the website stated, “You must
view the Grant Documents before making an election,” and provided that by accepting the stock
award, employees were accepting the Grant Documents, including the RCA, as well. (Id. ¶ 20.)
While Kula argues that the 2015 RCA was misleadingly labelled “Illinois LLC,” Merrill Lynch’s
website required that employees click the link to open each Grant Document before they could
click “Accept” and move to the next page where they could complete the acceptance of their
stock award by entering a unique password. (Id. ¶¶ 21-22.) Western Union employees would

6

As noted above, Kula disputes that the Merrill Lynch system for a Colorado employee in 2017 was the same as it
was for Kula, an Illinois employee, in 2016. While there may have been differences between the two systems,
McKee has testified twice that the requirements for accepting a grant were functionally the same and required
review of the grant documents, including the RCA.

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not have been able to confirm the acceptance of their stock awards until they opened the RCA
and as a result, even if the document’s filename was not entirely clear, the employees would
have been able to view the document and easily see that it was a restrictive covenant agreement.
(Id.) Thus, here, like in Newell and Lynch, accepting McKee’s description of the Merrill Lynch
system, Western Union employees were presented with a “fair opportunity” to review the
agreements and could not accept any stock grants until they had acknowledged that they had
reviewed them. In fact, the Merrill Lynch system at issue here went a step further than the
systems in Newell and Lynch, as the Merrill Lynch website required that employees physically
opened each of the grant documents, including the RCA, in a separate window before they could
move forward and confirm their acceptance of the stock award. (Id.) Accordingly, given
McKee’s testimony about the Merrill Lynch system and viewing the evidence in the light most
favorable to Western Union, Kula has failed to show that there is no genuine dispute regarding
whether Kula’s RCA was an enforceable clickwrap agreement pursuant to Western Union
employees’ acceptance of their stock award.
Kula also argues that even if the 2015 RCA was an enforceable clickwrap agreement,
Western Union has failed to show that Kula ever accepted the agreement. The parties agree that
Kula did not physically sign the agreement, and Kula contends that Western Union cannot
produce any screenshots of Kula’s version of the Merrill Lynch website, and thus cannot show
that he assented to the terms of the 2015 RCA. Kula has testified that he does not recall
accepting the 2015 RCA either electronically or otherwise. In response, Western Union argues
that its internal records indicate that Kula did accept the stock grants and the 2015 RCA on the
Merrill Lynch benefits website, which only he could have done using his unique password, on
May 13, 2016 at 3:26 PM, and that these records are sufficient to show that Kula assented to the

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terms of the 2015 RCA. (Pls.’ Resp. to Def.’s Statement of Facts 11: 34-35; R. 86, Ex. 9 Tom
Kula Grant Award.) Kula has not presented any evidence in response that suggests that Western
Union’s records are false or incorrect. Indeed, when PGI was recruiting Kula, they asked for
copies of any contracts that might restrict his employment, and Kula provided a copy of his 2015
RCA, suggesting that he was aware that he may have assented to it. Given these conflicting
facts, and considering the record in the light most favorable to Western Union and drawing all
reasonable inferences in favor of Western Union, Kula has failed to show that there is no genuine
dispute of material fact regarding his acceptance of the 2015 RCA.
B. The 2016 VCP Did Not Supersede the 2015 RCA
Kula next argues that even if the Court finds that Kula did accept the 2015 RCA, the
2016 VCP superseded and replaced all prior agreements, including the 2015 RCA, and therefore,
the Court should grant him summary judgment on Western Union’s claims premised on the 2015
RCA. In response, Western Union argues (1) that the 2016 VCP cannot supersede the 2015
RCA because Kula accepted the 2015 RCA in May 2016 after the 2016 VCP went into effect
and (2) that the 2016 VCP was only intended to replace previous compensation plans not
restrictive covenants and thus did not supersede the 2015 RCA.
In Illinois,7 consistent with general contract law, the court’s primary goal is “to give
effect to the parties’ intent as expressed in the terms of their written agreement.” Lewitton v. ITA
Software, Inc., 585 F.3d 377, 379 (7th Cir. 2009). “Illinois courts apply the “four corners” rule,”
under which the court looks at the contract language to see if it is facially ambiguous.
Colagrossi v. UBS Sec., LLC, No. 08 C 5471, 2014 WL 2515131, at *3 (N.D. Ill. June 4, 2014)
7

The choice of law provisions in the 2015 RCA and the 2016 VCP are contradictory. The 2015 RCA provided that
Delaware law governs, while the 2016 VCP provides that “applicable state law governs,” which in this case would
be Illinois law since Kula was a Western Union employee working and residing in Illinois. The parties do not argue,
however, that any differences in the law between Delaware and Illinois are relevant here, and accordingly, the Court
applies Illinois law, as both parties did in their briefs.

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(citing Air Safety, Inc. v. Teachers Realty Corp., 706 N.E.2d 882, 884 (Ill. 1999)). Where a
compensation agreement contains an explicit provision stating that it supersedes any previous
agreements, courts have found that the previous agreements are invalid and the agreement with
the superseding term governs the employee’s compensation. Act II Jewelry, LLC v. Wooten, No.
15 C 6950, 2016 WL 3671451, at *4 (N.D. Ill. July 11, 2016) (finding that plain and
unambiguous language of an incentive agreement superseded and terminated the employee’s
earlier confidentiality agreement); Colagrossi, 2014 WL 2515131, at *3 (finding that previous
compensation agreement was invalid because employee’s written employment agreement
discussed “compensation terms” and provided that it “supercede[d] [sic] any and all oral or
written understandings regarding [his] employment”).
Here, the unambiguous language of the 2016 VCP dictated that it superseded and
replaced all previous compensation plans. The Plan provided that it “cancels, supersedes and
replaces all previous compensation plans or arrangements (either verbal or written) in which [the
employee] previously participated.” (2016 VCP 3.) This clause explicitly applied to all previous
compensation agreements, which, as multiple paragraphs in the 2016 VCP unambiguously made
clear, included any and all “incentive compensation” plans or agreements to which the employee
was a party. (Id. 3 (the VCP governs employee’s “incentive compensation”), ¶¶ 3 (“not eligible
to earn any incentive compensation”), 16 (“Participants . . . are excluded from participation in all
other Western Union incentive plans”)). This superseding clause would thus apply, in theory, to
the 2015 RCA and the 2015 LTIP, which was consideration for the 2015 RCA and which was
explicitly incorporated into that agreement.8

8

The 2015 RCA explicitly references and incorporates the 2015 LTIP as consideration for its obligations. (See 2015
RCA 1 (“In consideration of employment or continued employment by the Company, the grant to Employee of an
award pursuant to The Western Union Company 2015 Long-Term Incentive Plan (incorporated herein by this
reference). . .”))

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As noted above, however, the plain language of the superseding clause in the 2016 VCP
states that it only applied to “previous compensation plans” in which the employee “previously
participated.” (Id. 3) (emphasis added.) The 2016 VCP was effective “commencing January 1,
2016,” but, despite the 2015 included in their titles, the parties do not dispute that, if Kula agreed
to the 2015 RCA and 2015 LITP at all, he did not do so until May 13, 2016, when Western
Union’s internal records show that he accepted his stock award. The 2015 RCA and the 2015
LTIP were thus not previous compensation plans because Kula had not previously participated
in those plans since, if he assented at all, he did not assent to his participation in those
agreements until May 13, 2016, five months after the 2016 VCP became effective. As a result,
the 2016 VCP did not supersede the 2015 RCA or the 2015 LTIP, and those agreements were
valid when Kula ended his employment at Western Union.9 W. Bend Mut. Ins. Co. v. Procaccio
Painting & Drywall Co., 794 F.3d 666, 674 (7th Cir. 2015) (“An integration clause precludes
consideration of prior and contemporaneous oral agreements; it says nothing about the parties'
ability to amend or negotiate new contractual terms in the future.”) (emphasis in original).
Accordingly, the Court denies Kula’s motion for summary judgment as to Counts III and
IV.
II.

Count V
Kula next argues that the Court should grant summary judgment in his favor on Count

V—Western Union’s tortious interference with contracts claim—because Western Union has
failed to show that any of its customers breached contractual agreements with Western Union or

9

Kula argues that the 2015 RCA cannot be valid because the 2016 VCP superseded the 2015 LTIP, and thus the
2015 RCA, even if Kula agreed to it in May 2016, lacked valid consideration. This argument fails, however,
because, as discussed above, the 2016 VCP did not supersede the 2015 LTIP or the 2015 RCA since Kula did not
accept those agreements or the related stock award until May 2016. While Kula never received any vested stock
because he left Western Union, had he stayed at Western Union he would have received a vested stock award under
the 2015 LTIP.

15

that Kula caused any customers to breach any contracts. Western Un
a
y
t
y
nion respond that (1) it has
ds
shown Kula may hav interfered with at least one Wester Union cu
K
ve
rn
ustomer, and (2) the Cour
rt
should de Kula’s motion becau the parties have not completed d
eny
m
use
discovery on this issue.
n
The Court den Kula’s motion for summary jud
T
nies
m
s
dgment as to Count V as premature.
o
s
Western Union has only moved for summary judgment o Counts III and IV, an as such, th
o
f
y
on
nd
he
Court only ordered, and the parti have only engaged in expedited discovery in relation to those
a
ies
y
n,
n
counts. Indeed, Wes
I
stern Union has provided a declaratio explainin that it has not yet
h
d
on
ng
complete the deposi
ed
ition of PGI’s corporate representati on the su
ive
ubject of PGI attempts to
I’s
obtain bu
usiness from Western Un
m
nion custome and Kula role in th
ers
a’s
hose efforts, in part becau
use
PGI’s corporate repre
esentative re
efused to ans
swer deposit
tion question on that su
ns
ubject. (Pls.’
’
Resp. to Def.’s Statem of Fact 23: 20-21; Ex. E Decl
ment
ts
laration of C
Christine Haw ¶¶ 6-7.)
wes
This decl
laration is su
ufficient to show that Ku
ula’s motion for summar judgment is premature
ry
e,
and accordingly, the Court denies Kula’s mo
otion for sum
mmary judgm as to Co
ment
ount V witho
out
e.
d)
-movant show by affida or declar
ws
avit
ration that, f
for
prejudice 10 Fed. R. Civ. P. 56(d (“If a nonspecified reasons, it cannot prese facts esse
d
c
ent
ential to justi its oppos
ify
sition, the co may: def
ourt
fer
consideri the motio or deny it . .”).
ing
on
t.
CON
NCLUSION
N
For the forego
oing reasons the Court denies Kula’ motion fo summary j
s,
d
’s
or
judgment.
DATED: July 12, 20
017

E
ENTERED

_________
___________
__________
___
AMY J. ST EVE
T.
United Stat District C
tes
Court Judge
10

Because the Court denies Kula’s sum
mmary judgmen motion on C
nt
Count V as prem
mature, it need not address at this
d
t
her
enuine dispute as to Kula’s to
ortious interfer
rence with Wes
stern Union’s c
contracts with
time wheth there is a ge
customers.

16