United Benefits LLC v. Caputo et al

On April 27, 2026, United Benefits LLC, a major employee benefits management firm, filed a federal lawsuit in the Northern District of Illinois against former Vice President Michael Caputo and two colleagues. The complaint alleges that in the weeks before resigning in March 2026, Caputo downloaded thousands of confidential files, including client rosters, pricing algorithms, and strategic growth plans. He then joined a direct competitor, Vista Benefits Group, along with the other defendants, purportedly breaching non-compete, non-solicitation, and confidentiality agreements. United Benefits asserts claims under the Defend Trade Secrets Act and Illinois state law for trade secret misappropriation, breach of contract, and tortious interference. The company seeks emergency injunctive relief and over $5 million in damages, arguing that the defendants’ coordinated exit and use of its proprietary data cause irreparable competitive harm.

On May 18, 2026, the district court granted a temporary restraining order and preliminary injunction, prohibiting the defendants from using or disclosing United Benefits’ proprietary information and from soliciting its clients or employees pending a final trial on the merits.

Whether the defendants misappropriated trade secrets by taking and using confidential business information, and whether the non-compete and confidentiality agreements are enforceable under applicable law to justify immediate injunctive relief.

The case underscores the heightened risks of employee data exfiltration in the service sector and has prompted HR and legal professionals to reexamine offboarding procedures and forensic digital audits. It serves as a cautionary tale for companies relying on restrictive covenants to safeguard sensitive business assets.