Cintas Corporation v. Perry, Daniel A. ( 2008 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
CINTAS CORPORATION,
a Washington Corporation,
Plaintiff-Appellant,
v.
DANIEL A. PERRY,
Defendant-Appellee.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 03 C 8404—Elaine E. Bucklo, Judge.
____________
ARGUED FEBRUARY 5, 2007—DECIDED FEBRUARY 20, 2008
____________
Before EASTERBROOK, Chief Judge, and ROVNER and
SYKES, Circuit Judges.
SYKES, Circuit Judge. Cintas Corporation alleged in
this suit that Daniel A. Perry, a former Cintas sales
manager, violated non-competition, non-solicitation, and
non-disclosure provisions of his employment agreement
when he left his job at Cintas to work for a competitor.
Cintas requested injunctive relief, damages resulting
from Perry’s alleged contract breaches, and restitution.
The district court denied preliminary injunctive relief
and later granted Perry’s motion for summary judgment.
The court held the non-compete clause was overbroad
and declined to exercise its discretionary authority to
2 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
rewrite it to make it reasonable and enforceable. The court
also held the evidence was insufficient to create a jury
issue on the alleged violations of the non-solicitation and
non-disclosure provisions of the contract. Cintas appealed
from this order. The district court later ordered Cintas
to pay Perry’s attorney’s fees and costs pursuant to a costs-
and-fees-shifting provision in the parties’ contract. Cintas
appealed this order as well, and the appeals were con-
solidated for oral argument and decision. Finally, the
district court entered an order quantifying the amount of
fees and costs reasonably incurred by Perry, and Cintas
appealed this order. We consolidated this last of Cintas’
appeals with the earlier ones and received additional
briefing. We now affirm.
I. Background
Cintas, a Washington corporation with its headquarters
in Cincinnati, Ohio, is in the business of renting and
selling corporate-identity uniforms and related products
to customers in the United States and Canada. Perry
was employed by Cintas from 1993 to 2003. He started as a
Sales Representative; in 1995 he was promoted to Sales
Manager; in 1997 he was promoted to Director of Sales
Development and Training for Cintas’ North Central
Group; and finally, in 2000 he became a National Account
Manager, with responsibility for Illinois and Indiana. As a
condition of being hired, Perry entered into an employment
agreement with Cintas, and with each subsequent promo-
tion, he signed an updated and/or new employment
agreement. The employment agreement in place at the
time Perry resigned from Cintas contained a non-competi-
tion provision, a non-disclosure provision, a non-solicita-
tion of employees provision, and an attorney’s fees and
litigation costs provision.
The first two of these provisions, in relevant part, state
as follows:
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 3
Non-Competition provision:
While Employee is employed by Employer, and for
twenty-four (24) months after such employment
ends for any reasons, Employee will not, either
directly or indirectly, (i) be employed in a manage-
rial or professional position by, consult for, engage
in any Industries business for, or have any owner-
ship interest in any of Employer’s competitors
named in the attached Appendix A, which will be
updated periodically by Employer issuing to Em-
ployee a revised and dated list including names
of new significant competitors or successors to
any previously-listed competitors, or (ii) call on,
solicit or communicate with any of Employer’s
customers or prospects for the purpose of obtain-
ing any Industries business other than for the
benefit of Employer. . .
Non-Disclosure provision:
In performing duties for Employer, Employee
regularly will be exposed to and work with Em-
ployer’s Confidential Materials and Informa-
tion. . . . While Employee is employed by Em-
ployer, and after such employment ends for any
reason, Employee will not reproduce, publish,
disclose, use, reveal, show, or otherwise communi-
cate to any person or entity any Confidential
Materials and Information of Employer unless
specifically assigned or directed by Employer to do
so. The covenant in this Subparagraph (a) has
no temporal, geographical or territorial restric-
tion or limitation, and it applies wherever Em-
ployee may be located.
The agreement uses the phrase “Confidential Materials
and Information” to refer to:
4 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
confidential strategies and programs, which in-
clude expansion and acquisition plans, market
research, sales systems, marketing programs,
product development strategies, budgets, pricing
strategies, identity and requirements of customers
and prospects, methods of operating, service
systems, computer passwords, other trade secrets
and confidential information regarding customers,
prospects and employees of Employer or of its
customers and other information not known to
the public . . . , giving Employer an advantage
over competitors not aware of such Confidential
Materials and Information.
Finally, the non-solicitation and attorney’s fees and costs
provisions state as follows:
Non-Solicitation of Employees provision:
While Employee is employed by Employer, and for
twenty-four (24) months after such employment
ends for any reason, Employee, acting either
directly or indirectly, or through any other person,
firm or corporation, will not induce or attempt to
induce or influence any employee of Employer to
terminate employment with Employer when
Employer desires to retain that person’s services.
The covenant in this Subparagraph (b) has no
geographical or territorial restriction or limita-
tion, and it applies wherever Employee may be
located.
Attorney’s Fees and Costs provision:
If Employer sues Employee for an alleged breach
of covenant(s) in this Paragraph 3 and the court
rules that Employee has not violated such cove-
nant(s), Employer will pay all litigation costs and
expenses and Employee’s reasonable attorney’s
fees necessarily incurred in the litigation.
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 5
Throughout his time at Cintas, Perry had access to
confidential materials and information, including na-
tional account prospect data, contact information for
Cintas’ current customers, Cintas’ cost for goods and
services, prices paid by customers for Cintas’ goods and
services, profit models, and budgeting information. Perry
also had access to electronic databases, certain of which
were password protected. At several points during his
employment with Cintas, Perry downloaded informa-
tion from Cintas’ computers onto two computer disks
without Cintas’ permission.
In May 2003, while Perry was employed by Cintas, he
received a telephone call from the human resources
director at Aramark Uniform Services, Cintas’ largest
competitor. After the call, Perry submitted a copy of
his résumé to Aramark to be considered for a Vice Presi-
dent of Sales position for Aramark’s western region. In
June 2003, Perry visited Aramark to discuss the position;
a month or two later, he submitted an unsigned copy of
Cintas’ employment agreement to Aramark. Perry dis-
cussed his pursuit of the Aramark position, in confidence,
with two of Cintas’ National Account Managers and
with representatives of two Cintas customers.
On October 14, 2003, Perry signed an employment offer
from Aramark, and one week later he notified Cintas
his last day would be October 27. Perry began working
at Aramark on October 28, 2003. Cintas alleges that
Perry’s employment by Aramark, a competitor, is a
breach of the non-competition provision in the parties’
agreement. Cintas also alleges the following specific
instances of contractual breach: After commencing em-
ployment with Aramark, Perry accompanied another
Aramark employee on a sales call to a Cintas customer.
Perry remained in the car, however, and did not discuss
the customer with the Aramark employee. Perry also
conducted a telephone interview with a former Cintas
6 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
employee for a position at Aramark. He did not know at
the time of the phone interview that the applicant had
been employed at Cintas; he concluded the interview
when he learned of that fact, and Aramark did not hire
the candidate. Also, just before and briefly after leaving
Cintas, Perry spoke to another Cintas sales manager
who was considering a job at Aramark. Finally, Perry
gave his Aramark assistant the two computer disks
containing Cintas’ information to help his assistant for-
mat an Aramark report.
The foregoing facts formed the basis of Cintas’ claim that
Perry breached his employment agreement by soliciting
Cintas’ customers for Aramark’s benefit, recruiting Cintas’
employees, disclosing Cintas’ confidential materials, and
working for a competitor of Cintas within two years of
leaving Cintas’ employ. Cintas sought injunctive relief,
money damages resulting from Perry’s alleged breaches,
and restitution of compensation paid to Perry for breaches
allegedly committed while he was still in Cintas’ employ.
Cintas initially moved for a preliminary injunction, which
was denied. Perry then moved for summary judgment,
arguing that the non-compete provision was overbroad
and thus unenforceable, and that Cintas failed to estab-
lish that he solicited its customers, recruited its employ-
ees, or disclosed confidential materials. In opposing
summary judgment, Cintas urged the district court to
judicially modify the overbroad non-competition provision
to protect Cintas’ legitimate business interests. Cintas
also argued that material issues of fact existed regarding
whether Perry violated the non-solicitation and non-
disclosure provisions of the agreement.
The district court granted Perry’s motion for sum-
mary judgment, recognizing that it had the discretion to
rewrite the overbroad non-compete provision but de-
clining to do so. The court also held that Cintas offered no
evidence suggesting Perry solicited Cintas’ customers,
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 7
recruited its employees, or used the confidential informa-
tion in his possession in violation of the agreement. Some
months later, the court ordered Cintas to pay Perry’s
reasonable attorney’s fees and litigation costs pursuant to
the parties’ agreement, but left open the amount. Ten
months later, the court entered an order quantifying the
amount of fees and costs.
Because of the piecemeal disposition of the case below,
Cintas filed four separate notices of appeal related to
this dispute. They are as follows: Cintas’ first appeal,
No. 06-1958, was taken from the district court’s order
granting summary judgment in favor of Perry. Several
months later, Cintas filed an amended notice of appeal,
which was docketed as No. 06-2844, from the district
court’s order holding that Cintas was required to pay
Perry’s costs and reasonable attorney’s fees. Those two
appeals were consolidated for purposes of briefing, oral
argument, and disposition. In the interim, the district
court entered its order awarding Perry $286,521.25 in
attorney’s fees and $21,027.37 in costs. Cintas filed
its third notice of appeal from that order, which was
docketed as No. 07-1216. Based on comments at oral
argument, Cintas filed a fourth notice of appeal on Febru-
ary 16, 2007, incorporating the matters raised in the
first consolidated appeal with the district court’s or-
der quantifying the attorney’s fees and costs. Appeal
Nos. 07-1216 and 07-1365 were subsequently consoli-
dated for briefing and disposition purposes.
We now address all issues in the first and second con-
solidated appeals and affirm the district court’s orders.1
1
In Cintas’ motion to consolidate the last of its appeals, Cintas
requested that we waive payment of the docketing fee required
in connection with appeal No. 07-1365. That request is granted.
The unresolved issue of attorney’s fees did not affect the finality
(continued...)
8 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
II. Discussion
A. Employment Agreement
We review the district court’s grant of summary judg-
ment de novo and view the facts in the light most favorable
to Cintas as the non-moving party. Valentine v. City of
Chicago, 452 F.3d 670, 677 (7th Cir. 2006). Summary
judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, to-
gether with the affidavits, show that there is no genuine
issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” FED. R. CIV.
P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). Ohio law governs pursuant to the choice-of-law
provision in the employment agreement.2
1
(...continued)
of the district court’s order granting summary judgment, and
the two tag-along orders awarding and later quantifying fees
and costs have been consolidated with the initial merits appeal.
Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202 (1988)
(stating that “unresolved issue of attorney’s fees for the litiga-
tion in question does not prevent judgment on the merits from
being final”); BASF Corp. v. Old World Trading Co., Inc., 41 F.3d
1081, 1099 (7th Cir. 1994) (“[An] order awarding fees in an
amount not yet determined can be consolidated on appeal with
a final order.”); Cont’l Bank, N.A. v. Everett, 964 F.2d 701, 702
(7th Cir. 1992) (“An open issue about legal fees, contractual or
otherwise, does not affect our jurisdiction to resolve the appeal
on the [merits] . . . .”); Dunn v. Truck World, Inc., 929 F.2d 311,
312 (7th Cir. 1991) (holding judgment resolving merits and
awarding attorney fees but not quantifying them final because
“the merits and awards of fees are always distinct for purposes
of finality”).
2
Cintas argues the district court erred by relying on the find-
ings of fact and conclusions of law from its ruling on Cintas’
motion for a preliminary injunction. However, Cintas offered
(continued...)
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 9
1. Non-Compete Provision
To prevail under Ohio law on its claim for breach of the
non-compete provision in the employment agreement,
Cintas must establish that the provision is reasonable
and necessary to protect its legitimate interests. Raimonde
v. Van Vlerah, 325 N.E.2d 544, 546-47 (Ohio 1975).
“A covenant restraining an employee from competing
with his former employer upon termination of employ-
ment is reasonable if it is no greater than is required
for the protection of the employer, does not impose undue
hardship on the employee, and is not injurious to the
public.” Id. at 547. If the provision is unreasonable or
overbroad as written, the court may modify it “to protect
the employer’s legitimate interests.” Id.Perry violated the non-compete provision by accept-
ing managerial employment with Aramark, which is
identified as one of Cintas’ competitors in the appendix
2
(...continued)
very little new evidence in the one-year period between the
close of evidence in the preliminary injunction hearing and the
close of discovery—the only new evidence was Perry’s answers
to Cintas’ interrogatories. The district court correctly articu-
lated the summary judgment standard and did not err in
referring to findings from the preliminary injunction phase of
the lawsuit.
In addition, Cintas argues in its reply brief that the district
court limited Cintas’ ability to present new evidence—apparently
Cintas wished to re-depose Perry but was unable to do so. Cintas
raised this argument in reply and does not develop it, so
we need not address it. Roger Whitmore’s Auto. Servs., Inc. v.
Lake County, Il., 424 F.3d 659, 664 n.2 (7th Cir. 2005) (stating
“de novo review does not mean that we must make and support
the parties’ arguments for them”).
10 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
attached to the employment agreement.3 That leaves
Cintas to demonstrate the provision is reasonable and
necessary to protect its legitimate interests. Cintas did not
make this argument below, however, arguing instead
that the district court should exercise its authority to
modify the non-compete to render it reasonable and
enforceable under Ohio law. This is an implicit concession
that the provision was overbroad and unenforceable
as written.4 On appeal, Cintas argues for the first time
that the non-compete provision was reasonable and
enforceable without modification. To the extent this point
was not conceded, it is certainly waived; we have “repeat-
edly held that if a party fails to press an argument before
the district court, he waives the right to present that
argument on appeal.” Ohio Cas. Ins. Co. v. Bazzi Constr.
Co., Inc., 815 F.2d 1146, 1149 (7th Cir. 1987).
Cintas argues in the alternative that the district court
was required to modify the non-compete to render it
reasonable and enforceable, citing this passage from the
Ohio Supreme Court’s decision in Raimonde: “We hold
that a covenant not to compete which imposes unreason-
able restrictions upon an employee will be enforced to the
extent necessary to protect the employer’s legitimate
3
Perry argues the case is moot with respect to any potential
violations of the non-compete provision of the employment
agreement because the two-year non-compete period has
passed. However, because Cintas seeks damages in its com-
plaint, the case is not moot. Lavin v. Ill. High Sch. Ass’n, 527
F.2d 58, 60 (7th Cir. 1975).
4
Perry’s National Account Manager position at Cintas was
limited to the territory of Illinois and Indiana, but the non-
compete provision imposed a two-year, world-wide ban on any
employment with, consultation for, or ownership interest in
more than 30 competitors of Cintas.
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 11
interests.” 325 N.E.2d at 547. The court’s use of the phrase
“will be enforced,” according to Cintas, imposes a manda-
tory duty on courts to modify unreasonable restrictive
covenants in employment agreements. We think this
overreads Raimonde. Prior to that decision, Ohio sub-
scribed to the so-called “blue pencil” rule, which provided
that “if unreasonable provisions exist in [an employment]
contract, they may be stricken, if [divisible], but not
amended or modified,” and that “if restrictions are unrea-
sonable and indivisible, the entire contract fails.” Id. at
546. In Raimonde, Ohio abandoned that rule, replacing
it with a “rule of reasonableness” that permits courts to
modify or amend restrictive non-compete covenants to
render them reasonable. Id.
Language elsewhere in Raimonde clarifies that the
court was recognizing a discretionary judicial power to
modify unreasonable non-compete provisions. The court
said the rule of reasonableness “permits courts to fashion
[an employment] contract reasonable between the parties,
in accord with their intention at the time of contracting.”
Id. at 546-47 (emphasis added). The court also said that
“[c]ourts are empowered to modify or amend employment
agreements,” id. at 547 (emphasis added), and “a trial
court may enforce a covenant ‘to the extent necessary to
protect an employer’s legitimate interest,’ ” id. at 548
(emphasis added). Later decisions of the Ohio Court of
Appeals confirm that judicial modification of unreasonable
or overbroad non-compete provisions under Raimonde
is discretionary, not mandatory. See LCP Holding Co.
v. Taylor, 817 N.E.2d 439, 446 (Ohio Ct. App. 2004)
(noting that “a trial court may modify an unreasonable
restrictive covenant to make it reasonable and enforce-
able,” but “is not required to do so”); Prof ’l Investigations
& Consulting Agency, Inc. v. Kingsland, 591 N.E.2d 1265,
1270 (Ohio Ct. App. 1990) (“The use of permissive lan-
12 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
guage in the Raimonde decision implies that modification
is within the discretion of the trial court.”).
Cintas did not propose specific modified language that
would suffice to render the non-compete provision reason-
able and enforceable. Beyond arguing that the district
court was required to modify the non-compete, Cintas
has not suggested how the court abused its discretion in
declining to do so. We perceive no abuse of discretion here.
Cintas also argues that Perry violated the non-compete
provision by soliciting Cintas’ customers. Assuming for the
sake of argument that this clause of the non-compete
provision is reasonable and enforceable, Cintas has not
pointed to evidence sufficient to permit a reasonable
juror to find a breach. Ruffin-Thompkins v. Experian
Info. Solutions, Inc., 422 F.3d 603, 610 (7th Cir. 2005)
(stating that when a party bears the burden of proof on
an issue, that party has the burden to point out informa-
tion in the record that demonstrates a genuine issue of
fact; “the district court need not scour the record to find
such evidence” (citation omitted)). Cintas first identifies
Perry’s discussion of his potential move to Aramark with
a current Cintas customer as a breach. Even drawing
all inferences in favor of Cintas, there is no evidence
that this discussion included a solicitation. Moreover,
after the conversation Perry signed this customer to a
mandatory contract to purchase supplies from Cintas
through 2006. Second, Cintas claims that Perry’s act of
accompanying an Aramark employee on a sales call to a
Cintas customer was a solicitation. But Perry remained
in the car and did not discuss the customer with the
Aramark employee. This incident does not amount to
solicitation. Finally, there is evidence that prior to leav-
ing Cintas, Perry told two Cintas customers about his
potential career move. Again, this is insufficient evidence
of solicitation.
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 13
2. Non-Solicitation of Employees Provision
Cintas alleged Perry violated the non-solicitation of
employees provision in two respects. First, Perry conducted
a telephone interview of a former Cintas employee for a
position at Aramark, but terminated the interview when
he learned the applicant formerly worked at Cintas. The
applicant—a former employee of Cintas—was not hired.
This does not amount to solicitation of a Cintas employee.
Second, Cintas points to Perry’s conversation with a fellow
Cintas sales manager about whether the employee was
considering a job with Aramark. This does not amount to
solicitation either. Considering these undisputed facts in
the light most favorable to Cintas, no reasonable juror
could find that Perry violated the non-solicitation of
employees provision.
3. Non-Disclosure Provision
Cintas alleges Perry violated the provision prohibiting
disclosure of confidential material based on his possession
of three items: (1) two computer disks containing docu-
ments Perry prepared while at Cintas; (2) a National
Accounts Manager performance ranking report; and (3) a
blank employment agreement from Cintas’ restricted
access database. We address each in turn. The computer
disks contained dated information, and Cintas has not
demonstrated how the information on the disks might
provide an advantage to competitors within the meaning
of the non-disclosure provision in the agreement. The
evidence reflects that Perry gave the disks to his Aramark
assistant for the limited purpose of formatting a re-
port—not for their substantive content—and Cintas
concedes that the formatting was not confidential. The one-
page performance ranking report was never disclosed to
anyone at Aramark, nor did Perry make use of the docu-
ment while at Aramark. Cintas also failed to explain how
14 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
this report would provide a competitive advantage to
Aramark; it showed Perry was Cintas’ highest-ranking
National Account Manager in July of 2003. Finally, the
blank employment agreement was not confidential—Cintas
conceded as much, acknowledging that Perry had the right
to disseminate a signed version of his employment agree-
ment to others. Accordingly, Cintas failed to raise a jury
issue on its claim that Perry violated the non-disclosure
provision of the employment agreement.
4. Perry’s Entitlement to Attorney’s Fees and Costs
Whether Perry is entitled to costs and attorney’s fees
under the parties’ employment agreement is a question of
law that we review de novo. Platinum Tech., Inc. v. Fed.
Ins. Co., 282 F.3d 927, 931 (7th Cir. 2002) (“In contract
interpretation cases, we review a district court’s inter-
pretation of an unambiguous contract de novo.”). Again,
the relevant contract language is as follows:
If Employer sues Employee for a breach of covenant(s)
in this Paragraph 3 and the court rules that Employee
has not violated such covenant(s), Employer will pay
all litigation costs and expenses and Employee’s
reasonable attorney’s fees necessarily incurred in the
litigation.
Cintas argues that litigation costs and attorney’s fees
are not recoverable because Aramark paid for Perry’s
defense. We disagree. The fee-shifting provision’s use
of the word “incurred” does not mean that Perry himself
must pay the litigation costs and attorney’s fees before
being entitled to an award of costs and fees. To the ex-
tent there is any ambiguity, the provision is construed
against Cintas as the drafter. Graham v. Drydock Coal
Co., 667 N.E.2d 949, 952 (Ohio 1996). The district court
correctly concluded Perry was entitled to attorney’s fees
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 15
and litigation costs under the employment agreement.5
B. Attorney’s Fees and Costs Award
We review the district court’s award of attorney’s fees
and costs for an abuse of discretion, Farfaras v. Citizens
Bank & Trust of Chi., 433 F.3d 558, 569 (7th Cir. 2006),
and reverse the district court’s award only “if it cannot
be rationally supported by the record,” JT Taubenfeld v.
Aon Corp., 415 F.3d 597, 600 (7th Cir. 2005). Perry
submitted detailed billing statements and supporting
evidence, as well as evidence regarding the rates billed
by counsel; Aramark’s timely payment of Perry’s bills;
and market rates for similar counsel in Chicago. After
5
As we have noted, after the district court quantified the fees
and costs Perry was entitled to collect, the parties submitted
separate briefs in this court addressing whether the district
court abused its discretion based on the amount of fees and
costs awarded. In its reply brief on that issue, Cintas argued, for
the first time, that Perry was not entitled to collect any fees
because the district court never affirmatively ruled that Perry
had not violated the non-compete provision. Cintas argued that
such a ruling is a condition precedent to Perry’s entitlement to
fees based on the language of the employment agreement:
“If Employer sues Employee for a breach of covenant(s) . . . and
the court rules that Employee has not violated such cove-
nant(s) . . . .” (Emphasis added.) Not only does this argument
appear for the first time in Cintas’ appellate briefing, it appears
in a reply brief addressing an entirely separate issue—whether
the district court abused its discretion in quantifying the fees
(not whether Perry was entitled to costs and fees, which had
already been decided). If Cintas wanted to press this argument,
the time and place to do so was before the district court, Ohio
Cas. Ins. Co. v. Bazzi Constr. Co., Inc., 815 F.2d 1146, 1149 (7th
Cir. 1987), not in its reply brief on its appeal of the order
quantifying the amount of costs and fees.
16 Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365
reviewing the submissions and considering Cintas’ objec-
tions, the district court awarded Perry $287,815.00 in
attorney’s fees and $29,816.47 in costs. In doing so, the
court denied several of Perry’s requests. For example, in
one instance, the court concluded support staff could
have completed the task rather than an attorney, so
$1293.75 in fees were denied. In another, the court denied
$7851.34 in research costs because Perry did not provide
a sufficient explanation for the charges. The court also
addressed Cintas’ objections to itemized amounts as low
as $50.
The district court also rejected Cintas’ complaint that
Perry’s counsel had engaged in impermissible “block
billing.” The court concluded the invoices were suffi-
ciently detailed to permit adequate review of the time
billed to specific tasks, and we see no abuse of discretion
in this conclusion. In any event, the evidence in the fee
proceeding established that Aramark paid Perry’s bills;
“[i]f counsel submit bills with the level of detail that
paying clients find satisfactory, a federal court should not
require more.” In re Synthroid Mkt’g Litig., 264 F.3d
712, 722 (7th Cir. 2001). The district court also held that
Cintas had not succeeded in casting doubt on counsel’s
billing rates. The court concluded, in the same vein and
consistent with circuit precedent, that the best evidence
of whether attorney’s fees are reasonable is whether a
party has paid them. See Stark v. PPM Am., Inc., 354 F.3d
666, 675 (7th Cir. 2004); Medcom Holding Co. v. Baxter
Travenol Labs, Inc., 200 F.3d 518, 520-21 (7th Cir. 1999);
Balcor Real Estate Holdings, Inc. v. Walentas-Phoenix
Corp., 73 F.3d 150, 153 (7th Cir. 1996). Aramark paid
Perry’s fees, and Perry submitted additional evidence
establishing that the rates billed were consistent with
the Chicago market for comparable legal work.
Cintas’ remaining arguments hinge upon certain limita-
tions on awards of costs and fees contained in various
Nos. 06-1958 & 06-2844 and 07-1216 & 07-1365 17
federal statutes and rules. However, Perry’s entitlement
to litigation costs and fees is contractual, not statutory;
limitations imposed by statute and rule are inapplicable.
The parties’ agreement provides for recovery of “all
litigation costs and expenses” and “reasonable attorney’s
fees.” The contract does not exclude any particular cate-
gory or type of costs or fees from the allowable recovery.
The district court is “in a superior position to observe
the work of the attorneys . . . and appraise the appropri-
ate value of their services.” Farfaras, 433 F.3d at 569.
Here, the district court did not abuse its discretion in
analyzing the work performed and arriving at an award of
litigation costs and reasonable attorney’s fees incurred.
The district court’s orders granting Perry’s motion for
summary judgment, awarding attorney’s fees and costs
under the employment agreement, and quantifying fees
and costs are AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-20-08