In response to Balfour’s lawsuit alleging a former sales representative violated a non-compete agreement after switching to competitor Jostens, the education commemoration company said it has a “commitment to fair competition” and works to honor its representatives’ previous obligations.
Taylor Publishing Company and Commemorative Brands Inc. filed the lawsuit against former sales representative Jim Hawkinson on Nov. 22 in the U.S. District Court for the Southern District of Illinois. Taylor Publishing and Commemorative Brands together are known as Balfour.
“Jostens competes fairly in the marketplace for representatives and for customers, and we have a well-earned reputation for high-quality products and services, competitive prices and ethical business practices,” he added. “Jim and other representatives recently joined our expanding team because of the strength and success of our company and the opportunities we provide. In proudly welcoming them to our team, we are careful to ensure that our new representatives continue to honor obligations they may owe to companies with whom they were formerly associated. Our commitment to fair competition is unwavering. We fully support Jim and are confident that the accusations made against him will prove to be baseless and without merit.”
The suit was filed through attorney Kaitlin Sheehan of Quinn Emanuel Urquhart & Sullivan LLP in Chicago.
“This claim arises from defendant’s underhanded scheme to intentionally and systematically violate the terms of two non-compete agreements,” Sheehan wrote.
According to the complaint, Hawkinson worked as a sales representative for Balfour for 24 years, selling yearbooks, class rings, caps and gowns, and other scholastic and commencement-related products. He serviced dozens of counties in Illinois and Missouri.
During that time, Balfour allegedly helped Hawkinson develop clients and create business goodwill in the territories he was working. Balfour also provided him with confidential client information, marketing techniques, sample products and sponsored school workshops.
“For decades, this worked well,” Sheehan wrote. “Balfour established a significant business of loyal repeat customers within Hawkinson’s territory and achieved nearly one million dollars per year in sales from clients serviced by Hawkinson. Hawkinson’s client base grew progressively, as did the depth of his relationship with the clients, and he earned great and greater compensation from Balfour as a result of his efforts.”
Balfour claims its competitor, Jostens, then offered Hawkinson an “extremely lucrative payoff to violate his non-competition agreement and betray his long-time sponsor.” Jostens allegedly convinced Hawkinson to solicit his former clients to transfer to Balfour’s competitor.
“Jostens has made the cynical determination that, rather than laying out substantial amounts of money and waiting years to patiently build goodwill with customers, it is cheaper and easier to seduce Balfour’s representatives to breach their non-competition agreements with enormous bonuses than it would be to invest in the initial relationship-building,” Sheehan wrote. “All Jostens needs to make its unlawful plan work is to find representatives such as Hawkinson, who are willing to violate their non-competes for a large enough payday.”
The suit states that Balfour works through independent contractor sales representatives who enter into contracts that include non-competition agreements.
“These agreements are critical to Balfour’s business and ensure Balfour sales representatives cannot use Balfour’s reputation, resources, products, samples, and confidential information to make a name for themselves and develop goodwill within a particular territory, only to turn around and solicit those same clients to purchase similar products from a Balfour competitor,” Sheehan wrote.
The plaintiffs claim Hawkinson entered into two non-competition agreements with Balfour and is subject to two-year agreements running from the date of his departure under both of them. He severed his agreements with Balfour on July 2.
Balfour alleges that on Aug. 31, less than two months after Hawkinson resigned, a Jostens employee emailed one of Hawkinson’s former Balfour clients in Union County saying Hawkinson is managing a territory in Bloomington, Ill., during his two-year non-compete timeframe, but plans to return as a representative of Jostens.
“I am heading the yearbook operations with transitioning his schools to Jostens, so when Jim returns you will be trained and ready to go,” the email states. “The goal is to get every school transitioned over so it will be a seamless transition when Jim resumes his role as your rep.”
However, Bloomington is in a county Hawkinson previously serviced and is part of the non-compete agreement, the suit states. Balfour also claims the email is an example of indirect soliciting.
“As a result of Hawkinson’s misconduct, Balfour has suffered and will suffer several million dollars in damages, as well as substantial and irreparable harm that is unquantifiable. Balfour has already lost numerous clients in the Hawkinson Territory, who have transferred their business to Jostens, it anticipates losing many more, and it cannot know how many potential clients in the territories it may lose due to Hawkinson’s conduct,” Sheehan wrote.
Balfour accuses Jostens of engaging in a “blitz” over the past six months with a “large-scale raid of its sales representatives and clients, orchestrated specifically to overwhelm Balfour in numerous regions and with numerous clients.”
The plaintiff alleges it was left to “try to cobble together” which representatives left and whether they violated the non-compete agreements. It adds that only the most successful Balfour representatives were targeted.
The plaintiffs seek compensatory damages, punitive damages, injunctive relief, equitable extension of Hawkinson’s non-competition period, and all other relief deemed just.
U.S. District Court for the Southern District of Illinois case number 3:21-cv-1473