## Facts

- Stampede Tool Warehouse, Inc. sold automotive tools to roughly 11,000 “jobber” customers and spent substantial sums prospecting for new accounts.
- Stampede maintained a customer list/database that included customer identities plus nonpublic information such as buying histories, preferences, and related sales data used to target marketing and sales.
- Stampede treated the customer information as confidential by restricting access, securing physical and electronic storage, monitoring copying, and informing employees the information belonged to Stampede and was confidential.
- Mark May and Fred Moshier worked as sales employees for Stampede from about October 1990 until May 1991 and had access to customer information during their employment.
- Stampede’s president observed unauthorized after-hours photocopying on the company copier shortly before the employees’ departures.
- After leaving, Moshier formed or joined a competing business and began soliciting customers he had serviced at Stampede; defendants asserted any customer information used was based on general knowledge and memory rather than documents.
- Stampede experienced a significant drop in sales among accounts previously handled by the defendants and sued under the Illinois Trade Secrets Act (ITSA).
- The circuit court entered a TRO and later a permanent injunction finding the customer list a trade secret and finding misappropriation; the injunction broadly barred defendants from doing business with Stampede customers to whom they had access while employed.

## Issues

1. Whether Stampede’s customer list constituted a “trade secret” under the Illinois Trade Secrets Act.
2. Whether using customer information retained or reconstructed from memory can constitute “misappropriation” under ITSA without proof of physical copying or removal.
3. Whether a permanent injunction barring defendants from doing business with covered customers was impermissibly broad in scope and duration under ITSA and equitable limits.

## Decision

- The appellate court affirmed the findings that Stampede’s customer list qualified as a trade secret under ITSA and that defendants misappropriated it.
- The appellate court held that misappropriation may be established by use of trade secret information learned through employment even if the defendant claims it was used from memory rather than taken in tangible form.
- The appellate court affirmed that injunctive relief was available but reversed/modified the permanent injunction as overbroad.
- The case was remanded for entry of a narrower injunction limited to the period necessary to eliminate any commercial advantage derived from the misappropriation and tailored to the advantage actually obtained.

## Legal Principles

- A customer list can be a trade secret when it derives economic value from not being generally known or readily ascertainable, includes nonpublic relationship or purchasing information, and is developed through substantial effort and expense.
- Reasonable secrecy measures (restricted access, security controls, and confidentiality directives to employees) support trade secret status under ITSA.
- Misappropriation under ITSA does not require physical taking; using or disclosing trade secret information obtained under a duty of confidentiality may suffice, including use based on memorized or reconstructed information.
- ITSA injunctions must be tailored in scope and duration and should not function as a perpetual noncompetition order; they should terminate when the trade secret ceases to exist, subject only to a limited extension needed to eliminate any commercial advantage from misappropriation.

## Conclusion

The appellate court held that Stampede’s detailed, protected customer list was an ITSA trade secret and that former employees could misappropriate it through post-employment use even if claimed to be from memory, but it required that injunctive relief be narrowed to the time and scope necessary to remove the unfair competitive advantage rather than impose an indefinite restraint on competition.


Stampede Tool Warehouse, Inc. v. May, 272 Ill. App. 3d 580, 651 N.E.2d 209 (Ill. App. Ct. 1995)