Section Newsletters

Articles on Restrictive Covenants

Illinois Restrictive Covenants Face a Sea Change if Bill Passes By Christopher Hennessy & Jeremy Glenn Labor and Employment Law, March 2021 A bill was introduced in the Illinois Legislature in January that, if made into law, would rewrite significant aspects of the law of restrictive covenants entered into after the effective date of its adoption, including barring some altogether.
Appellate court provides further guidance on the enforceability of restrictive employment covenants By Samuel Neschis Business and Securities Law, May 2016 In AssuredPartners, Inc. v. Schmitt, the court reviewed the reasonableness of restrictive employment covenants under the Reliable Fire standard.
Fifield: A new “requirement” for restrictive covenants By Joseph H. McFarlane Business Advice and Financial Planning, December 2013 The recent Illinois appellate court decision of Reliable Fire Equipment Co. v. Arredondo invalidating a non-solicitation and non-competition agreement, has employers wondering whether they could ever enforce restrictive covenants against their former employees.
Fifield and Enterprise Finance Group, Inc. v. Premier Dealer Services, Inc.: Two years of continuous employment necessary to enforce postemployment restrictive covenants By Ayla N. Ellison Labor and Employment Law, September 2013 The First District Appellate Court, in its recent decision in Fifield and Enterprise Finance Group, Inc. v. Premier Dealer Services, Inc., held that a noncompetition agreement is not valid and enforceable if an employee is fired or resigns within two years.
2 comments (Most recent October 5, 2013)
New rules enforcing Illinois non-competes—Now easier or harder? By Richard A. Sugar Labor and Employment Law, September 2013 In a recent trifecta of Illinois Appellate Court cases, judges have altered the landscape in Illinois regarding the lengths to which employers can go to protect their customers, clients, patients, and marketplace from competition originating from former employees
First District requires two years of continuous employment to enforce employee covenants not to compete: Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327 By Ronald D. Menna, Jr. Civil Practice and Procedure, August 2013 Fifield v. Premier Dealer Services, Inc. is one of the first published decisions on the enforcement of employment non-competition clauses following the Supreme Court’s decision in Reliable Fire Equipment Co. v. Arredondo on December 1, 2011.
Illinois recognizes privacy rights in case involving investigation of former employee By Michael R. Lied Labor and Employment Law, June 2013 A look at the case of Lawlor v. North American Corporation of Illinois.
Covenants not to compete: Recent changes in the law By Sherry A. Mundorff Women and the Law, October 2012 In determining whether a covenant not to compete clause is valid the courts will look to a three-prong test. First, the limitation on the employee must be necessary to protect the legitimate interest of the practice. Second, the limitation would not impose a hardship on the practitioner signing the contract. Third, the scope of the limitation is reasonable.
Drafting enforceable customer solicitation restrictions By Arthur Sternberg Labor and Employment Law, July 2012 The primary drafting problem is the scope of restricted customers. A ban as to all customers risks being held overbroad and unenforceable, especially if the employer dominates the relevant market, has a large number of customers spread across a wide geographic area, or has distinct product lines or services that draw different types of customers.
Upholding the plain language reading of non-competition bargains: Citadel v. Teza Technologies LLC By Matthew R. Carter Civil Practice and Procedure, May 2012 This article discusses the appellate court’s decision in Citadel  v. Teza Technologies LLC, describes how it might be applied by employers and employees going forward, and ultimately suggests that, because of Reliable Fire Equipment Co. v. Arredondo, the Citadel opinion may have greater application than it did when the opinion was first published.
Looking back and looking forward—Arredondo and restrictive employment covenants in Illinois By Brian J. Hunt & Jake A. Cilek Corporate Law Departments, March 2012 Before the Illinois Supreme Court’s holding in Reliable Fire Equipment Co. v. Arredondo, a two-factor test was widely considered to be exhaustive for purposes of the “legitimate business interest” analysis in Illinois; however, the Court held in Arredondo that such a rigid framework is incapable of addressing the sensitive connection between one’s right to work and the protection of a purported business interest.
Protectable interests in restrictive covenants clarified by Supreme Court of Illinois By Michael P. Tomlinson Corporate Law Departments, January 2012 An update in the case of Reliable Fire Equip. Co. v. Arredondo.
Covenants not to compete in Illinois—The muddle of the legitimate business interest test By Harold B. Oakley Intellectual Property, September 2011 This article first examines Steam Sales and Reliable. It then addresses what these decisions, which dealt with sales positions wholly unrelated to the health care industry, may nevertheless mean for health care providers in Illinois.
Employers and their attorneys left wanting more guidance after first major post-Sunbelt decision regarding reasonableness of restrictive covenants By Michael P. Tomlinson Labor and Employment Law, June 2011 The Steam Sales Corp. v. Summers decision is significant because it indicates that there may be cases in which the courts will evaluate whether protectable interests other than the already-recognized legitimate business interests can suffice to show the reasonableness of a restrictive covenant.
Covenants not to Compete in Illinois—The assault on the legitimate business interest test By Harold B. Oakley Health Care Law, May 2011 Covenants not to compete are common in employment contracts, including those of physicians. Recent decisions from the Illinois Appellate Court have introduced some controversy regarding the proper analysis of such covenants. This article explores these recent cases.
Protectable interests in restrictive covenants expanded By Michael P. Tomlinson Corporate Law Departments, January 2011 Until there is an Illinois Supreme Court decision on the issue, the overall guiding principle in determining whether the scope of the covenant will be upheld is whether it is attempting to do something “over and above” simply suppressing “ordinary” competition.
Drafting enforceable non-competition agreements in Illinois By Peter A. Steinmeyer & Jake Schmidt Corporate Law Departments, May 2010 Read the author's six practical steps to improve the odds that a court will enforce a non-competition agreement.
Court upholds bonus forfeiture for going to work for competitor By Michael R. Lied Labor and Employment Law, April 2010 This decision provides employers in Illinois a possible way to discourage employees from going into competition without the need to seek enforcement of a noncompete agreement.
Fourth District discredits 30-year “legitimate-business-interest” test and ignores own ruling for restrictive covenants By George S. Bellas & A. Patrick Andes Civil Practice and Procedure, January 2010 Creating a district split, the Illinois Fourth District Appellate Court, in an opinion authored by Justice Steigmann, disregarded its own precedent and declared the “legitimate-business-interest” test “no longer valid, if it ever was.”
Is the “Legitimate Business Interest” test coming to an end? By Michael R. Lied Labor and Employment Law, January 2010 It remains to be seen whether other courts in Illinois will begin to follow the reasoning of Sunbelt Rentals when asked to enforce a restrictive covenant.
Illinois Appellate Court rules that restrictive covenant prohibiting real estate sales manager from soliciting former employer’s agents is not unreasonable as a matter of law By Janet V. Siegel Corporate Law Departments, October 2008 In Baird and Warner Residential Sales, Inc. v. Mazzone, No. 1-07-2179, the Illinois Appellate Court, First District reversed the circuit court’s determination that a restrictive covenant between Patricia Mazzone and her former employer, real estate broker Baird & Warner, was unenforceable as a matter of law. 
Decision explains policy as to enforcement of restrictive covenants in employment agreements By Howard Z. Gopman Business and Securities Law, August 2008 In Brown and Brown, Inc. v. Patrick, Mudron and Cornolo and Thompson, Ltd. and Gunderson (Brown), 379 Ill. App.3d 724, 887 N.E.2d 437, 2008 WL 681848, 27 IER Cases 539, Ill.App. 3 Dist., March 11, 2008 (NO. 3-06-0908), the Third District Appellate Court made some interesting comments relative to the enforcement of restrictive employment covenants in affirming a summary judgment in favor of the employee.
Businesses should take heed of Illinois court’s novel approach to restrictive covenants By Christopher P. Keleher Corporate Law Departments, April 2008 Information is the lifeblood of the service profession. Companies must be vigilant in protecting knowledge and goodwill, two integral ingredients earned through the course of experience.
Illinois Supreme Court upholds physician restrictive covenants By Rick L. Hindmand Health Care Law, March 2007 On December 21, 2006, the Illinois Supreme Court held that restrictive covenants in the employment agreements of two physicians are enforceable and that the clinic which formerly employed the physicians was entitled to a preliminary injunction to enforce the restrictive covenants.
A few tips on litigating non-competition agreements: An employee’s perspective By Patrick M. Kinnally Civil Practice and Procedure, December 2005 Some pointers that may help when representing employees in litigation involving non competition contracts.
Can restrictive covenants really restrict? By Patti S. Levinson Business Advice and Financial Planning, June 2005 Restrictive covenants are similar to pre-nuptial agreements.
Restrictive covenant / covenant not to compete update By Michael R. Lied Labor and Employment Law, June 2004 The courts continue to churn out cases interpreting restrictive covenants in the employment context. An analysis of some recent cases follows.
Restrictive covenants in physician contracts: An emerging public policy battleground By Andrew B. Cripe Health Care Law, June 2004 The enforceability of restrictive covenants in physician contracts has been a frequently litigated issue in Illinois in recent years.
The enforceability of physicians’ covenants not-to-compete in the wake of the Illinois Supreme Court’s (non)decision in Carter-Shields v. Alton Health Inst. By Michael K. Goldberg General Practice, Solo, and Small Firm, October 2003 Many in the health care field anticipated that Carter-Shields v. Alton Health Inst., would resolve the issue of the enforceability of restrictive covenants for physicians.
Illinois physicians and the enforceability of covenants not to compete in the wake of Carter-Shields By Michael K. Goldberg General Practice, Solo, and Small Firm, March 2001 Recently, the Fifth District Appellate Court reversed an Order of the Circuit Court of Madison County granting partial summary judgment to defendants, a medical corporation and its assignee, in an action involving the enforceability of a contractual covenant not to compete against a board-certified family-practice physician.

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