## Facts

- PepsiCo and Quaker Oats were direct competitors in sports drinks and “new age” beverages during a period of intense market competition.
- William E. Redmond, Jr. worked for PepsiCo’s Pepsi-Cola North America division from 1984 to 1994, rising to General Manager of a major business unit with significant revenues and profits.
- Redmond’s position gave him access to confidential business information, including forward-looking strategic plans and specific pricing, marketing, and distribution strategies for 1995.
- Redmond resigned from PepsiCo and accepted a high-level position at Quaker, whose product portfolio included Gatorade and, at the time, Snapple.
- PepsiCo alleged that Redmond’s new role would require him to use PepsiCo’s confidential plans and strategies, even if unintentionally, and that he was not candid with PepsiCo about his departure and new duties.
- PepsiCo sought a preliminary injunction to prevent Redmond from disclosing trade secrets and from taking Quaker duties related to beverage pricing, marketing, and distribution for a limited period.

## Issues

1. Whether PepsiCo showed a likelihood of success under the Illinois Trade Secrets Act and a confidentiality agreement based on a threatened misappropriation theory, including “inevitable disclosure.”
2. Whether the preliminary injunction restricting Redmond’s competitive duties at Quaker was a proper and equitable remedy, rather than an impermissible de facto noncompete.

## Decision

- The Seventh Circuit affirmed the district court’s grant of a preliminary injunction.
- The court held the district court did not abuse its discretion in finding a real threat of trade secret misappropriation.
- The court concluded PepsiCo presented substantial evidence that Redmond possessed extensive and current knowledge of PepsiCo’s strategic plans and competitive tactics.
- The court found the similarity between Redmond’s PepsiCo role and his Quaker role, in directly competing product categories at a critical time, supported a finding that use or disclosure of trade secrets was likely.
- The court agreed that the injunction was reasonably tailored and time-limited to protect trade secrets, and that irreparable harm would result if the information were used or disclosed.

## Legal Principles

- Under Illinois trade secret law, a plaintiff may obtain injunctive relief to prevent threatened misappropriation, not only to remedy actual disclosure.
- Protectable trade secrets can include confidential business information such as strategic plans and pricing, marketing, and distribution strategies, when not generally known and when conferring competitive advantage.
- “Inevitable disclosure” may support threatened-misappropriation relief where a former employee’s new job is so similar and competitive, and the employee’s knowledge so specific and current, that the employee will likely rely on trade secrets in performing new duties, even without intent to misuse them.
- In evaluating preliminary injunctive relief, courts consider likelihood of success, irreparable harm, balance of harms, and public interest; trade secret disclosure is often irreparable because competitive loss cannot be readily undone.
- A restriction on job duties may be upheld when it is reasonably designed to protect trade secrets and limited in scope and duration, even absent a broad noncompetition agreement.

## Conclusion

The court upheld a preliminary injunction limiting a former executive’s competitive duties after finding that his detailed knowledge of a company’s current strategic plans, combined with a substantially similar role at a direct competitor, created a sufficient threat of misappropriation under an inevitable disclosure theory.


PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995)