Court Applies Ordinary Meaning to Back-Solicitation Clause in the Absence of Parol or Trade Usage Evidence
ALLIANCE 3PL CORP. v. NEW PRIME, INC. (August 2, 2010)
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Loders Croklaan USA produces fats and oils used in the food industry. Until 2003, the company dealt directly with trucking companies to transport its product to its customers. One of the companies with whom it had such a relationship was New Prime, Inc. In 2003, Loders retained Alliance 3PL Corp., a transportation management services company, to manage its transportation needs. In turn, Alliance entered into a contract with New Prime to continue transporting Loder's products. The contract contained a back-solicitation clause which prohibited New Prime from soliciting any “traffic” from a company which it first learned about through Alliance. When Loders' contract with Alliance ended, New Prime submitted a successful bid directly to Loders. Alliance brought suit against New Prime for breach of the back-solicitation clause. A jury awarded Alliance $2.2 million in damages. Judge Bucklo (N.D. Ill.) denied New Prime's Rule 50 and 59 motions. New Prime appeals.
In their opinion, Chief Judge Easterbrook and Judges Kanne and Rovner reversed. The basic facts were not in dispute. The parties agreed that New Prime had a relationship with Loders before being retained by Alliance and that the amount of business available to New Prime increased during the Alliance era. The Court noted that the dispute arose regarding the meaning of the word "traffic" in the back-solicitation clause. The district court judge concluded that the word was ambiguous and allowed the jury to decide which meeting to apply. New Prime relied on the ordinary definition of the word in conjunction with the purpose behind the back-solicitation clause to conclude that, since it knew of the company and its general transportation needs before its contract with Alliance, it did not breach the clause. The Court found this position supported by Illinois restrictive covenant law. The Court added that a party that wants to divert from the normal definition of the term can do so with either parol or trade usage evidence -- and Alliance did neither. There is therefore no record support for Alliance's position that "traffic" should be defined as "amount of traffic" in order to hold New Prime liable.
Robert Holmes was an employee of the United States Postal Service (“USPS”) in Minnesota from 1970 until 1992. He sued the USPS under Title VII of the Civil Rights Act of 1964 (“Title VII”). The case settled in 1994. Shortly thereafter, he returned to the employ of USPS in Indiana. In 2003, Holmes filed a complaint with the EEOC that the USPS failed to accommodate a disability, in violation of the Rehabilitation Act. In mid-2004, Holmes and USPS resolved their dispute at an EEOC mediation. The settlement agreement a) placed Holmes on twenty hours per week administrative leave/twenty hours per week leave-without-pay status through October 2004 and retroactive to January 2003, b) specified his salary, and c) required him to retire or resign in October 2004. Holmes filed this suit to enforce the settlement agreement, complaining that several actions taken by USPS after the settlement violated its terms. The district court granted summary judgment to USPS. Holmes appeals.