Illinois EC Brings Second Trade Secrets Theft Case

Two Illinois electrical contractors are squaring off in federal court, one alleging theft by another of confidential, legally protected bidding and pricing information it subsequently used to undercut it and win business at its expense.

Attorneys for Block Electric Company, Inc., Niles, Ill., brought the civil action against Chicago-based Midwest Interstate Electrical Construction Co., and a subsidiary, March 16 in the U.S. District Court for the Northern District of Illinois. Also named in the suit are several of the firms’ executives, one a former Block project manager.

The suit comes less than a year after Block reportedly settled a closely related one it had brought against another Illinois electrical contractor in 2023 for allegedly pirating the same proprietary bidding information. Block’s attorney, Stephen C. Voris, told Electrical Construction & Maintenance that that case was settled out of court in 2025, with the defendant, Interactive Building Solutions, LLC, (IBS) Joliet, Ill., agreeing to pay Block “in excess of $1 million.”

The new suit alleges that, with the aid of a then-Block employee, Gerald Hughes, Midwest chief operating officer Michael Arvesen secured Block’s proprietary version of the Accubid bidding software program in January 2018, shortly after leaving Block to join Midwest. That version, the suit alleges, contained “highly confidential and proprietary bidding data for creating and submitting bids and pricing for jobs as well as other methods and processes of doing business.”

With that version in hand, allegedly delivered to Arvesen personally via a thumb drive provided by Hughes, a Block project manager he was friendly with, Midwest, it is alleged, was able to begin to “compete against Block and other more established electrical contractors that possessed the knowledge and experience to bid and manage A-card (union labor) projects,” which the suit alleges Midwest was trying to develop and expand at the time of Arvesen’s hiring. Over the course of the next several years, the suit states, Midwest “used Block’s Protected Information and the Accubid program containing Block’s Master Database to prepare bids for electrical contracting services, (resulting) in excess of 300 contracts as a direct result of its misappropriation and misuse.”

Block’s case turns on the allegation that Midwest’s purported actions violated the federal Defend Trade Secrets Act. As detailed in one of six counts in Block’s complaint, the information allegedly stolen was highly guarded at the firm, password-accessible by only a few executives at the firm who therefore knew its proprietary nature, including Arvesen when he was employed there. That information, the complaint states, was owned by Block and “had significant independent economic value because it was not known to, and not readily ascertainable through proper means by, another person or party who could obtain economic value from its disclosure or use.”

Disregarding that, the suit alleges, Arvesen, along with three others at Midwest — president John R. Shannon; his wife, Bridget Shannon, president of subsidiary Midwest Interstate Technologies, Inc.; and their son, Tim Shannon, a project manager/estimator for the firms — agreed on the need to try to get their hands on Block’s proprietary information after realizing that the generic Accubid software they had purchased bore little resemblance — and thus had less comparative value — to the Block data-enhanced Accubid software Arvesen had used while at Block. That action, a civil conspiracy the suit formally alleges in one of its counts, led to Arvesen reaching out to Block’s Hughes, who ended up placing a thumb drive with the downloaded Block Accubid program in Arvesen’s mailbox.

According to the complaint, Midwest’s alleged actions surfaced after Block discovered evidence of its proprietary information in a bid Midwest had prepared in January 2023 for a prospective job the two firms were jointly pursuing. 

Later that year, as Block was litigating the first case against IBS, Midwest’s Arvesen was deposed “regarding his relationship and communications with” the former Block employee, Hughes, then an IBS employee named as a co-defendant fingered as the alleged source of the proprietary Block information that IBS secured. Under questioning, the complaint against Midwest states, Arvesen stated that the Block information in the joint Block-Midwest bid “came from an unidentified flash drive he claimed to have found in his home mailbox.” The suit alleges, however, that “contrary to his sworn deposition in the IBS litigation, on June 25, 2024, Arvesen told a Block employee that Hughes had placed the flash drive of Block’s Protected Information in Arvesen’s mailbox, thus enabling Arvesen to tap into (that) for his new job at Midwest.”

In Block’s version of the events that unfolded, alleged in the current suit against Midwest, Arvesen asked Hughes to provide the flash drive, and Hughes complied. And four years later, it’s alleged, “Arvesen returned the favor to Hughes by sending him the stolen Block Protected Information when Hughes suddenly quit Block in April 2022 and went to work for competitor Interactive Building Solutions. Then, Hughes was alleged to have used the same (information).” 

IBS, Block’s first case claimed, was, like Midwest, seeking to become more competitive in the electrical contracting market. After joining IBS, that suit alleged, Hughes, hoping to help his new employer gain an edge, called in the favor to Arvesen, securing the Block information in the same thumb drive he had supplied Arvesen earlier.

As part of last year’s settlement with Block, Voris says, IBS agreed to hire a consulting firm to examine its systems to ensure they were fully scrubbed of Block’s proprietary information. “They went in with team that examined network of IBS and its employees and erased forever any semblance of Block’s stolen bidding data.”

In the pending case against Midwest, Block is seeking “injunctive relief to prevent the defendants from further tortious and illegal conduct and for monetary damages as provided by statute and allowed by common law.”

Commenting on the two cases, Voris, with Chicago law firm of Burke, Warren, MacKay and Serritella, P.C., handling both, says they’re evidence that contractors need to be thinking more creatively about how to protect intellectual property. Despite Block having written policies in place explicitly limiting employee access to and utilization of proprietary information, adequate controls may not have been in place to completely seal it off.

“Companies have to be more vigilant about ensuring the secrecy of their data,” he says. “If they keep it under lock and key, password-protected, confidentially maintained, viewable by only a select number of employees they can be better protected, even if they don’t have agreements in place with strong prohibitions against misusing it.”