Employers with proprietary business information, valuable client lists, and other confidential information need to be aware of a recent Illinois court decision which drastically affects the landscape of enforceable non-compete agreements for new employees. On June 24, 2013, the Illinois appellate court in the case of Fifield v. Premier Dealer Services struck down the enforceability of a non-compete agreement with an employee who worked at the business for less than two years. Despite the fact that the employee specifically negotiated terms of the non-compete agreement, the court held that the covenant seeking to restrict his employment after he resigned from his position was unenforceable because the employee worked in his new position for only 3 months.
The decision makes it clear that business owners utilizing non-compete agreements with new employees must consider the following factors:
- The business must provide additional consideration to the employee prior to the employee signing the agreement in order to make it enforceable from the outset of the employment;
- Without additional consideration, if the employee leaves employment for any reason prior to two years of employment, the agreement may be unenforceable.
If your business currently utilizes or intends to utilize non-compete agreements with your employees, you need to reassess the enforceability of your non-compete agreements with your employees to meet the changing state of the law in Illinois.
The Law Office of Jack L. Haan, P.C. can help protect you and your business with protecting your valuable proprietary business interests and client lists. Call me (708.480.2600) to discuss the issue further. Thank you.