Business 8th Edition by Marianne Jennings

Exercise 41

Coady v Harpo, Inc.
719 N.E.2D 244 (III. App. 1999)
O! Oprah! Do Tell!
Facts
Elizabeth Coady (plaintiff) was employed by Harpo, Inc. (defendant), a company owned by Oprah Winfrey, as a senior associate producer for The Oprah Winfrey Show" from November 1993 until March 1998. Ms. Coady alleged that for some time prior to March 26, 1998, those working at Harpo engaged in conduct so intolerable as to amount to constructive termination. On March 26,1998, Ms. Coady notified Harpo by letter from her attorney that she resigned effectively immediately
Ms. Coady, a trained journalist, indicated her intent to write or otherwise report about her experiences as an employee of Harpo, She asserted that she would write about her experiences as an exercise of her rights of free speech and free press and was not prohibited from doing so by a confidentiality policy, which was entitled "Business Ethics, Objectivity and Confidentiality Policy," contained in Harpo's September 1996 employee manual.
In a letter dated April 24, 1998, Harpo "reminded" Ms. Coady that she had signed a document entitled "Business Ethics, Objectivity, and Confidentiality Policy" on March 12,1995, and provided her a copy of the agreement in the letter. The letter further stated that in the March 12,1995, agreement, Ms. Coady "agreed (among other things) to keep confidential, during her employment and thereafter, all information about the Company, Ms. Winfrey, her private life, and Harpo's business activities which she acquired during or by virtue of her employment with Harpo." Harpo representatives indicated in the letter their intentions to enforce and ensure compliance with the confidentiality agreement.
Ms. Coady filed suit seeking, among other things, a declaration that the covenant is unenforceable. The trial court dismissed the claim, and Ms. Coady appealed.
Judicial Opinion
GREIMAN, Justice
Both the independent document entitled "Business Ethics, Objectivity, and Confidentiality Policy" (hereinafter the 1995 agreement) and the portion of the employee manual with the same title (hereinafter the 1996 employee manual) include a section entitled "Confidentiality Assurances," which provides in pertinent part as follows:
1. During your employment or business relationship with Harpo, and thereafter, to the fullest extent permitted by law, you are obligated to keep confidential and never disclose, use, misappropriate, or confirm or deny the veracity of any statement or comment concerning Oprah Winfrey, Harpo (which as used herein, included all entities related to Harpo, Inc., including Harpo Productions, Inc., Harpo Films, Inc.) or any of her\its Confidential Information. The phrase 'Confidential Information as used in this policy, includes but is not limited to, any and all information which is not generally known to the public, related to or concerning: (a) Ms. Winfrey and\or her business or private life; (b) the business activities, dealings or interests of Harpo and\or its officers, directors, affiliates, employees or contractors; and\or (c) Harpo's employment practices or policies applicable to its employees and\or contractors.
2. During your employment or business relationship with Harpo, and thereafter, you are obligated to refrain from giving or participating in any interview(s) regarding or related to Ms. Winfrey, Harpo, your employment or business relationship with Harpo and\or amy [sic] matter which concerns, relates to or involves any Confidential Information.
The relevant documents also provide that commitment to the stated policies is required as a condition of employment: "Your commitment to the guidelines set forth in this policy is a condition of your employment or business relationship with Harpo."
In addition, defendant's motion to dismiss attached a copy of plaintiff's acknowledgment of the employee manual, which she signed upon the commencement of her employment at defendant in 1993. The acknowledgment signed by plaintiff states in relevant part:
1 acknowledge and understand that I may not use any confidential or proprietary information of HARPO for my own purposes either during or after my employment with HARPO, and I understand that I am prohibited from removing, disclosing or otherwise misappropriating any of HARPO's confidential or proprietary information for any reason.
"A postemployment restrictive covenant will be enforced if its terms are reasonable." To determine the reasonableness of a restrictive covenant, "it is necessary to consider whether enforcement of the covenant will injure the public, whether enforcement will cause undue hardship to the promisor and whether the restraint imposed by the covenant is greater than is necessary to protect the interests of the employer."
The reasonableness of some types of restrictive covenants, such as no solicitation agreements, also is evaluated by the time limitation and geographical scope stated in the covenant. However, a confidentiality agreement will not be deemed unenforceable for lack of durational or geographic limitations where trade secrets and confidential information are involved..
Although restraint of trade is a significant concern, "[a]n equally important public policy in Illinois is the freedom to contract" Furthermore, postemployment restrictive covenants "have a social utility in that they protect an employer from the unwarranted erosion of confidential information."
Unlike the traditional line of restrictive covenant cases, the confidentiality agreement at issue in the instant case does not impose any of the typical restrictions commonly adjudicated in restrictive covenant cases.
Defendant does not seek to restrain plaintiff's future career. Plaintiff is free to choose her future occupation, the locale in which she may choose to work, and the time when she can commence her new career. Defendant does not object to plaintiff becoming a journalist, competing with defendant in the same venue and in any locale, including Chicago, and in beginning her new venture immediately. The confidentiality agreement does not restrict commerce and does not restrict plaintiff's ability to work in any chosen career field, at any time. Instead, the 1995 confidentiality agreement restricts plaintiff's ability to disseminate confidential information that she obtained or learned while in defendant's employ. Most certainly, plaintiff had no problem with keeping confidences as long as she was a senior associate producer and continued her work with defendant.
Moreover, we find unpersuasive plaintiff's argument that the confidentiality agreement is too broad because it remains effective for all time and with no geographical boundaries. Whether for better or for worse, interest in a celebrity figure and his or her attendant business and personal ventures somehow seems to continue endlessly, even long after death, and often, as in the present case, extends over an international domain.
Under the facts of this case and the terms of the restrictive covenant at issue, we find that the 1995 confidentiality agreement is reasonable and enforceable. Accordingly, we affirm the trial court's order dismissing plaintiff's cause of action as stated in count 1 of her complaint.
Affirmed.
Is the Oprah covenant enforceable?