Business Owners Beware, Make Sure Your Employment Agreements are Clearly Written and Reasonable

Every business has employees, and as business litigators, the attorneys at DiTommaso-Lubin pride ourselves on being knowledgeable about all the areas of law that affect our clients, including employment laws. Our Orland Park business attorneys recently discovered a case that has an impact on companies who utilize employment non-competition agreements with their employees.

Reliable Fire Equipment Company v. Arredondo pits an employer against two former employees, Defendants Arredondo and Garcia, who worked as fire alarm system salesmen for Plaintiff. Each Defendant signed an employment agreement where Defendant's would allegedly earn commissions of varying percentages of the gross profits on items or systems sold. After working for Plaintiff for several years, Defendants created Defendant High Rise Security Systems, LLC., which was allegedly a competitor to Plaintiff's business. Plaintiff eventually became aware that Defendants were starting an alleged competitor company, and asked Defendants if in fact they had created a fire alarm business. Defendant Arredondo allegedly denied that he was starting such a business, and resigned shortly afterward, with Defendant Garcia tendering his resignation two weeks after Arredondo.

1221952_to_sign_a_contract_3.jpgPlaintiff then filed suit alleging breach of the duty of fidelity and loyalty, conspiracy to compete against Plaintiff and misappropriation of confidential information, tortious interference of prospective economic advantage, breach of the employment agreements, and unjust enrichment. The trial court held that the employment agreements were unenforceable because of unreasonable geographic and solicitation restrictions and the fact that language of the agreements was unclear. A trial on the issues unrelated to the employment agreement ensued, and Defendants successfully moved for a directed verdict because there was insufficient evidence that Defendants competed with Plaintiffs prior to Arredondo's resignation.

Plaintiff then appealed the trial court's ruling that the employment agreements in question were unenforceable and the directed jury verdict. The Appellate Court affirmed the trial court's directed verdict, stating that the lower court had properly weighed the evidence in finding a total lack of competent evidence. The Court then analyzed the restrictive covenants under the legitimate business interest test and found that the geographic restrictions were not reasonable and therefore the trial court did not err in ruling that the restrictive covenants were unenforceable.

Reliable Fire Equipment Company v. Arredondo illustrates why it is so important for business owners to keep an eye on their employees, and serves as a warning for companies wanting to sue former employees based upon non-competition agreements. Furthermore, the case shows that courts frown upon the use of vague language in such agreements, and it is always in your best interests to keep the terms of employment agreements reasonable.

Continue reading "Business Owners Beware, Make Sure Your Employment Agreements are Clearly Written and Reasonable" »

Northern District of Illinois Federal Court Grants Motion to Strike Plaintiff's Request for Injunctive Relief in Breach of Contract Case

DiTommaso-Lubin has successfully litigated many business disputes, and in our many years of experience we have found that contract claims are among the most contentious conflicts. Because so many of our clients deal with breach of contract issues, our Elmhurst business attorneys are always mindful of new court decisions issued in this area of the law. In fact, our lawyers just discovered one such case, Jumpfly Inc. v. Torling, in the US District Court for the Northern District of Illinois.

Jumpfly Inc. v. Torling pits a Plaintiff employer against two former employees who allegedly violated the non-compete agreements signed when they were hired by Plaintiff. Plaintiff contends that Defendant Torling started a competing pay-per-click internet advertising side-business while in Defendant's employ, and upon discovering its employee's side-business, fired him and sent a cease and desist letter demanding that he stop violating the non-compete. The parties eventually negotiated a settlement allowing Torling to continue his business, but the agreement prohibited him from soliciting any of Plaintiff's employees. Torling allegedly solicited Defendant Burke -- who was working for Plaintiff at the time under a similar non-compete agreement -- and got him to quit his position with Plaintiff to work for Defendant Torling.

1279664_sale_webbutton.jpgPlaintiff then filed suit against the two individuals and the new company (Windy City) that they worked for -- alleging rescission of a settlement agreement, breach of contract, violations of the Lanham Act and Illinois Deceptive Trade Practices Act, and intentional interference with contract based upon non-compete agreements between the parties. Plaintiff's requested the Court to enjoin Defendants' competitive business conduct and for monetary damages. In response, Defendants filed a motion to strike Plaintiff's request for injunctive relief and filed a motion to dismiss under 12(b)(6).

The Court granted the motion to strike as to the breach of contract claim because the two year term of the non-compete agreement had already expired and an injunction would result in an unreasonable restraint of trade. The Court also noted that Plaintiff's seven-month delay -- after discovery of the illicit conduct -- in asking for an injunction also weighed in favor of Defendants. The Court denied the motion to strike as to the statutory claims, however, because injunctive relief is provided by both laws which rendered the motion premature.

Next, the Court granted Defendants' motion to dismiss the breach of contract and intentional interference with contract claims due to pleading insufficient facts that Defendant Windy City induced either of the individual Defendants to breach their contracts with Plaintiff. In dismissing Plaintiffs conspiracy to interfere with contract, the Court applied the Intracorporate Conspiracy Doctrine and declined to agree with Plaintiff's argument that Defendants' conduct fell with in an exception to the rule. Finally, the Court denied the motion to dismiss the settlement agreement breach claim as the effect of Defendants' breaches had yet to be determined.

Continue reading "Northern District of Illinois Federal Court Grants Motion to Strike Plaintiff's Request for Injunctive Relief in Breach of Contract Case" »

Appellate Court of Illinois Orders in Camera Review of Potentially Privileged Documents in Action for Breach of Fiduciary Duty

332157_contract.jpgBusiness litigation is necessarily an adversarial process – the stakes are high and as such the opposing parties in most lawsuits will fight over many issues during the case. One of the most contentious segments of any case is the discovery process. Because the information obtained during discovery can make or break a case, it is important to understand the law in this area. In that vein, our Berwyn business attorneys would like to share a recent Illinois Appellate Court decision that may affect many of our clients the next time they go to court.

In Mueller Industries Inc. v. Berkman, Defendant Berkman worked for Plaintiff as president of a company owned by Plaintiff pursuant to an employment contract. During his employment, Defendant formed an investment partnership and obtained a 10% ownership interest in a company that was one of Plaintiff's primary suppliers. Defendant's lawyer – whose firm was also counsel for Plaintiff – advised him how to structure the investment venture so as to not run afoul of his employment contract with Plaintiff. The initial employment agreement subsequently expired, and a new open-ended agreement was consummated that contained a non-compete clause and other restrictive covenants governing outside financial interests and business opportunities. Defendant then had his attorney form a new company to compete with Plaintiff, and Defendant subsequently resigned his position with Plaintiff.

Plaintiff filed suit for breach of his employment contract and breach of fiduciary duty, alleging Defendant profited personally at the expense of Mueller through his investment partnership. A discovery dispute ensued when Defendant refused to produce documents related to his investment in the supply company and his creation of the competing company. Defendant refused production based upon the 5th amendment and attorney-client privileges. Plaintiff filed a motion to compel production, which was granted by the trial court.

Defendant appealed the trial court's grant of the motion, and reasserted that the documents were privileged. The Appellate Court reversed in part, holding that Defendant's pre-existing relationship with his lawyer kept all communication prior to the attorney's firm's representation of Plaintiff privileged. However, all communications after the dual representation began were no longer so protected because Defendant no longer had any reasonable expectation of confidentiality. Finally, the Court found that Defendant had failed to demonstrate that producing the requested documents would amount to incriminating testimony, but remanded the case with orders for the lower court to perform an in camera review of the disputed documents and urged the trial court to make a detailed record of its findings.

Continue reading "Appellate Court of Illinois Orders in Camera Review of Potentially Privileged Documents in Action for Breach of Fiduciary Duty" »

Detroit Pistons Owner Sues Competitor and Ex Employees for Alleged Trade Secrets Theft

Chicago%27s%20top%20trade%20secret%20lawyers.bmp

Our Chicago trade secrets attorneys were interested to see a recent trade secrets lawsuit coming from the high-dollar world of professional sports. Palace Sports & Entertainment, owner of the Detroit Pistons basketball team, is suing rival venue and sports company Olympia Entertainment Inc., plus nine ex-employees who moved to Olympia, for alleged theft of its confidential trade secrets. Crain’s Detroit Business reported that the claim stems from the movement of ten Palace employees to Olympia, starting in February when Palace president Tom Wilson left to run a new venture for Olympia and its parent company, Ilitch Holdings. This venture was to look into a new venue for the Detroit Red Wings, also owned by Ilitch. Nine people followed Wilson, including two executive vice presidents. In Michigan state court, Palace accuses them of breach of contract, breach of fiduciary duty, unfair competition, conspiracy, conversion, tortious interference and misappropriation of trade secrets.

According to the complaint in Palace Sports & Entertainment Inc. v. Olympia Entertainment Inc., dated June 8, 2010, Palace is accusing the ex-employees of taking and misusing trade secrets, despite having signed different versions of a confidentiality agreement that gave them a fiduciary role in Palace’s confidential information. The contract also contained restrictive covenants not to disclose such information to people outside the company, or use it for their own or anyone else’s gain. Confidential information was defined broadly, including “any technical, economic, financial, marketing or other information, which is not common knowledge.” Palace alleges that the ex-employees misappropriated information including suite prices, customer and prospect lists and sales notes, a business plan, marketing plans, suite assignments, appointment logs, proposals, vendor lists and at least one contract. When Palace notified Olympia of the first theft, it said, Olympia provided physical documents and lists of files. But Olympia did not provide the electronic data behind those files, Palace alleged and has even put some of the data on its own computers.

Palace demanded that Olympia return all of the electronic files and physical documents; that each ex-employee swear an oath that all of the information has been returned; and that a third-party expert be allowed to comb Olympia’s computers and the ex-employees’ personal computers for the information. Olympia has not complied. In its lawsuit, Palace said this caused it immediate and irreparable harm by enabling unfair competition. Olympia said publicly that it believed Palace simply did not like losing its employees. No further court documents are freely available, but trial is set for May 27, 2011.

This case generated great interest in the Detroit press, in part because Ilitch was considering buying the Pistons from Palace. But as Illinois business lawyers, we would like to discuss the strength of Palace’s case, judging by the allegations made in its complaint. Specifically, we suspect that the defendants could consider a defense based on whether the information they are accused of stealing was actually confidential trade secrets. Under the laws of Michigan, Illinois and other states, some information is not a trade secret because it is widely available to the public and not valuable. Thus, a trade secrets lawsuit cannot survive if it is based on the use of information such as lists of businesses copied from a phone book. Even if Palace’s confidentiality agreement defines such information as confidential, employees would be under no obligation to comply. The agreement cited in the complaint may also be subject to a challenge for being overly broad or vague because its definition of confidential business information includes “any information, not known to the general public.” This could easily include information with no special economic value.

Continue reading "Detroit Pistons Owner Sues Competitor and Ex Employees for Alleged Trade Secrets Theft" »

NRP Reports: "HP Sues Ex-CEO Hurd Over Oracle's Job Offer"

HP Sues Ex-CEO Hurd Over Oracle's Job Offer
by Richard Gonzales
NPR reports:

Mark Hurd recently was fired from his job as CEO of Hewlett-Packard after a scandal involving an extra-martial relationship. One of HP's main tech rivals -- Oracle -- wants to make Hurd its co-president. That's prompted HP to sue, claiming Hurd can't possibly perform the new job without tapping into HP's trade secrets.



Our Chicago non-compete agreement lawyers have defended high level executives in cases with similar claims to the Hurd case. A case in which our firm defended a former Motorola executive was covered in Crain's Chicago business. You can view that article by clicking here.

DiTommaso-Lubin handles litigation over non-compete clauses for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Our Chicago business litigation attorneys have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results.

DiTommas-Lubin a Chicago business law firm represent both plaintiffs and defendants in such cases, and can also help stop litigation before it starts by reviewing contracts to look for covenants and clauses that could create problems later. Based in Oakbrook Terrace and downtown Chicago, our Schaumburg noncompete clause lawyers take cases from Wheaton, Lake Forest, Hinsdale and many other cities throughout Illinois, as well as in Indiana, Wisconsin and the entire United States. To learn more or set up a free consultation, please contact us through the Internet or call toll-free at 1-877-990-4990 today.

The Wall Street Journal Reports: H-P Sues to Stop Ex-Chief's Job

Chicago%20trade%20secret%2C%20covenant%20not%20to%20compete%20and%20confidentiality%20law%20firm.jpg

H-P Sues to Stop Ex-Chief's Job
By ROBERT A. GUTH, BEN WORTHEN And JOANN S. LUBLIN .

The Wall Street Jornal Reports:

Hewlett-Packard Co. sued to block its former chief executive from joining rival Oracle Corp. as a senior executive, alleging Mark Hurd's hiring breaches his exit agreement and will inevitably lead to a transfer of its trade secrets to a competitor. ... While it isn't unusual for companies to sue departing executives to enforce exit agreements, H-P's suit Tuesday against Mr. Hurd is atypical in that former CEOs are rarely subject to such legal actions, experts said.

H-P's suit focuses on a confidentiality agreement, which restricts Mr. Hurd from disclosing sensitive information about his former employer.


Continue reading "The Wall Street Journal Reports: H-P Sues to Stop Ex-Chief's Job " »

Clothing Retailer Sues Competitor and Former Employees Alleging They Stole Secret Designs

Chicago%20non-compete%20agreement%20attorneys.bmp

As Illinois trade secrets litigation attorneys, we were interested to see a trade secrets lawsuit arise out of the time-sensitive and competitive world of women’s fashion. As the Naples Daily News reported in July, Florida clothing company Chico’s FAS Inc. has sued competitor Cache Inc. and two former employees who moved to Cache, Rabia Farhang and Christine Board. Chico’s alleges that Farhang and Board shared designs from Chico’s White House/Black Market line with Cache, resulting in nearly identical spring and summer collections from the two brands. The lawsuit’s complaint includes exhibits of pictures of both collections. It accuses the women of breach of their nondisclosure agreements and legal duties, and Cache of inducing them to breach those agreements, and all defendants of tortious interference with contractual relations, misappropriation of trade secrets, unfair competition, theft, unjust enrichment and civil conspiracy.

According to the complaint in the case (PDF), which was filed in New York state court, Cache has not been financially successful in the past four or five years, during which time Chico’s White House/Black Market line has done well. Chico’s alleges that Cache tried to fix this by inducing Farhang and Board to leave Chico’s in the fall of 2009, taking their knowledge of design plans for 2010 clothing lines along with other trade secrets and confidential information. At Chico’s, Farhang and Board both participated in the designs of the 2010 lines, Farhang as a senior officer. Using the allegedly stolen designs, the complaint says, Cache saw an increase in sales in spring of 2010, and Chico’s alleges that Cache will use stolen designs in its fall line as well. Because of this, it requested preliminary and permanent injunctions stopping Cache from selling clothes from its spring, summer and fall lines, as well as a recall of the spring and summer lines. It also asked for financial damages and court orders protecting its trade secrets and confidential information.

Our Chicago business emergency lawyers believe this case is a good example of a situation in which swift action is necessary. If the allegations by Chico’s are true, its intellectual property and brand have already been somewhat diluted by Cache’s use of very similar designs in its spring and summer lines. This would be ongoing damage to the company that includes difficult-to-measure non-financial harm to its identity and customer loyalty, as well as actual financial damages from infringement. Furthermore, the tight schedules of fashion and retail companies mean that they bring out their fall lines in mid-summer, which means the court must take quick action on the July 29 lawsuit to stop the infringing on the fall line. This also means that Cache’s fiscal health could be in serious trouble if the count chooses to grant the injunction against the fall line and the recall order for the spring and summer lines. For both sides, this claim represents a legal emergency requiring quick action to protect their business.

Continue reading "Clothing Retailer Sues Competitor and Former Employees Alleging They Stole Secret Designs" »

Chicago Federal Judge Denies Injunction in Insurance Brokerage Restrictive Covenant Case

Oak%20Brook%20covenant%20not%20to%20compete%20lawyers.bmp

Our Chicago noncompete agreement lawyers were interested to read about a significant ruling in a covenant not to compete case. According to insurance industry journal National Underwriter Property & Casualty, a federal district judge for the Northern District of Illinois ruled in June that former employees of CRC Insurance Services Inc. may continue in their new jobs at Ryan Specialty Group Inc. while the courts hear the two companies’ legal dispute. The companies, both of which are specialty insurance brokers, are fighting over employees who left CRC in May to move to Ryan’s R-T Specialty of Illinois, a new company founded by Pat Ryan, the CEO of Aon Corporation and a Chicago philanthropist. The judge’s preliminary ruling means the employees can stay in their jobs at least until the lawsuit by CRC has been decided.

According to the article, the exodus started when Tim Turner resigned as co-president of CRC in January. In February, Ryan announced that it was starting RTS with Turner in the role of managing director. He was joined by a former outside counsel to CRC, Ed McCormack. CRC’s complaint alleges that McCormack solicited CRC employees to join RTS. In all, 120 employees made that switch, including 39 who had signed covenants not to compete. After a large group of resignations on May 4, CRC sued RTS to enforce employees’ agreements not to compete, not to solicit former colleagues or customers for two years, and not to disclose certain company information. RTS told the court it is taking steps to obey the confidentiality agreements, but disagrees with CRC about the non-compete agreement and the scope of the non-solicitation agreement.

In the ruling, the Chicago federal court declined to grant a preliminary injunction to CRC, which would have stopped all 120 employees from working at RTS or any other competitor. In the ruling, the court said allowing the employees to continue working at RTS will harm CRC, but declining to allow them to keep working would put RTS out of business and harm the livelihoods of the employees. Crain’s Chicago Business noted that CRC has also filed suit in Alabama and California.

This ruling is a major victory for RTS and its new employees. RTS is backed by the wealth of Pat Ryan, but it can’t do business if none of its new employees are allowed to work for it. As the judge noted in the article, even CRC agreed that RTS would not survive without the 120 employees at issue -- 81 of whom do not have a non-compete agreement. By contrast, the judge noted that CRC would not go out of business for lack of this preliminary injunction. Rulings like this can be appealed, of course, and our Illinois emergency business litigation attorneys may be able to offer other options to clients in CRC’s situation. In fact, as a CRC spokesman said in the article, this is likely to be just the first step in a long dispute between the two companies.

Continue reading "Chicago Federal Judge Denies Injunction in Insurance Brokerage Restrictive Covenant Case" »

How to Protect Your Company's Trade Secrets, and Customer Lists -- Our Chicago Business Attorneys Can Help You Draft and Enforce Covenants Not to Compete and Confidentiality Agreements and Pursue Litigation to Enforce Them If Necessary

Our Chicago covenant not to compete and trade secret attorneys can assist your company or business in drafting agreements to protect your business from rogue former employees who engage in unfair competition. Our Chicago business lawyers and Chicago business trial attorneys can file lawsuits seeking a TRO, injunction and actual damages to protect your business from employees who steal customer information and violate non-compete agreements. To see the types of cases our Chicago business law lawyers handle you can look at our website. To contact one of our Chicago business law attorneys, click here. You can also view our Chicago business attorneys listings in Super Lawyers.







A Video Summarizing Some Legal Issues Relating to Non-Compete Agreements -- Our Chicago Attorneys Prosecute and Defend Covenant Not to Compete Lawsuits

DiTommaso-Lubin prosecutes and defends cases involving controversies over a covenant not to compete, or other restrictive covenants. Our Illinois restrictive covenant attorneys represent clients in active litigation over the validity and enforcement of these covenants, as well as helping to evaluate whether litigation may arise over such a contract. With more than 25 years of experience, we have handled these claims for businesses of every size, from large corporations to family-owned businesses, as well as individual employees. Based near Naperville, Aurora, Geneva, Lisle, Warrenville, Downers Grove, Wheaton, Wilmette, Evanston, Ill., and downtown Chicago, we represent clients throughout the state of Illinois, as well as in Indiana and Wisconsin. To learn more about how our Illinois covenant not to compete lawyers can help you, please do not hesitate to contact us through our Web site or call toll-free at 1-877-990-4990.

Scope of Injunctions Enforcing Restrictive Employment Covenants Must Be Clear, Fourth District Decides

waukegan%20covenant%20not%20to%20compete%20lawyers%20and%20attorneys.jpg

Our Illinois noncompete clause attorneys recently noted an important case addressing the standards for a preliminary injunction in Illinois lawsuits over covenants not to compete. In Lifetec, Inc. v. Edwards, No. 4-07-0300 (Ill. 4th Nov. 6, 2007), Lifetec sued former salesman Peter Edwards for breach of three restrictive covenants in his employment contract. It also sued his wife, Carol Edwards, and new employer, Patterson Medical Supply Inc., for tortious interference with the contract. Trial court granted Lifetec a preliminary injunction, and Edwards filed the instant appeal.

Lifetec sells medical devices and products. When Edwards began working there as a salesman, he signed a contract agreeing not to:

  • Compete with Lifetec, or sell or lease the products he had been assigned during the last 18 months of his employment, or competing products, within the territory assigned to him in the last 18 months of his employment.
  • Directly or indirectly solicit purchase or lease of the product or competing products within the same territory.
  • Work as a distributor or sales representative for any manufacturer that was a client of Lifetec, or for a competitor that also handles the client’s products, within the last 12 months.

The restrictive covenant applied for 24 months after the employment agreement was terminated.

Edwards left Lifetec for Patterson, a larger competitor, after 10 years. According to the opinion, he knew the move could cause Lifetec to sue and gave Patterson a copy of the agreement, but Patterson said it would take care of him in any lawsuit. Several months later, he admitted to a former colleague that he was working for Patterson. Months later, Lifetec sued him for breach of contract and requested a preliminary injunction. At an evidentiary hearing, evidence was introduced that Edwards had solicited Lifetec customers, but he said all Lifetec customers were also Patterson customers because the bulk of Patterson’s business was from national contracts. On the basis of the evidence at this hearing, the trial court granted a preliminary injunction stopping Edwards from violating the contract.

Edwards appealed, asking only for a decision on whether there was enough evidence to support the granting of the injunction. The appeals court said there was. The question, the court wrote, was whether Edwards had used protectable confidential information gained at Lifetec for his own gain. Lifetec contended that its “open quotes” to buyers constituted protectable information, although not all open quotes necessarily resulted in sales. The court took it one step further, saying the way those quotes were calculated was the real confidential information, as the quotes themselves were not secret once submitted to customers. Edwards’ knowledge of the reasoning behind the bids could give Patterson an advantage in the competitive medical supply industry. The defendants’ arguments that Lifetec should have alleged that Edwards misappropriated its trade secrets also fail, the court wrote, since Lifetec is making no such claim. All of this is sufficient to raise fair questions of fact, the court said, so an injunction was proper until the merits of the case could be decided.

A special concurrence filed by Presiding Justice Robert Steigmann agreed with the outcome, but said the court was incorrect to use the “legitimate business interests” test. This test is three decades old, the justice wrote, but the Illinois Supreme Court had never embraced it and in fact failed to use it at all in its 2006 decision in Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52, 866 N.E.2d 85 (2006). Because of this, he wrote, the court should have stopped its analysis after finding that the time and territory restraints in the covenant were reasonable. The majority noted, however, that the parties made no argument on this basis.

Continue reading "Scope of Injunctions Enforcing Restrictive Employment Covenants Must Be Clear, Fourth District Decides" »

Continued Employment for a Short Time Is Not Adequate Consideration for Post-Employment Restrictive Covenant, Appeals Court Decides

Chicago%20covenant%20not%20to%20compete%20lawyers%20and%20attorneys.jpg

DiTommaso-Lubin’s Illinois breach of contract litigation attorneys were pleased to see a split Illinois Third District Court of Appeal decision clarifying the circumstances under which a post-employment restrictive covenant is valid. The decision came in Brown & Brown v. Patrick Mudron, No. 03-CH-1363 (Ill. 3rd March 11, 2008), in which a Florida insurance company sued a former employee for breaching a restrictive covenant in her employment agreement.

Diane Gunderson, the employee, worked for a Joilet, Ill. company that was taken over by Brown & Brown. Brown asked Gunderson to sign a new employment agreement with them, and in fact, fired an employee who refused to do so. The agreement said Gunderson’s employment could be terminated any time for any reason and prohibited her from soliciting or servicing any of Brown’s employees for two years after ending her employment with the company. She signed the agreement, but resigned seven months later and went to work for a competitor. Brown sued, alleging that Gunderson had breached the restrictive covenant at her new job. The trial court granted summary judgment in favor of Gunderson because it couldn’t find any evidence that she had breached the covenant, and Brown appealed.

The majority started by disposing of a “choice of law” provision in the contract requiring all disputes to be resolved in Brown’s home state of Florida. Illinois law applies anyway, the court wrote, because Illinois has a greater interest in the case and moving it to Florida would be against Illinois public policy interests. International Surplus Lines Insurance Co. v. Pioneer Life Insurance Co. of Illinois , 209 Ill. App. 3d (1990).

The court next considered Gunderson’s argument that the employment contract is not legally enforceable. Among other things, the majority wrote, restrictive covenants must give the employee adequate consideration to support the covenant. In post-employment contracts like Gunderson’s, they wrote, caselaw says continued employment can only count as that consideration if it is truly adequate -- generally meaning a duration of two years or more -- because of the possibility that at-will employment will mean a quick, causeless firing. Gunderson’s employment continued for only seven months, the court pointed out, and the fact that she resigned didn’t matter under Mid-Town Petroleum, Inc. v. Gowen, 243 Ill. App. 3d. (1993).

For that reason, the court wrote, there was no need to consider whether Brown’s case presented genuine issues of material fact. And for the same reason, Gunderson was not entitled to claim attorney fees under the voided employment contract. Thus, the majority said, the trial court’s decision to grant summary judgment stands.

However Judge Daniel Schmidt dissented, saying he believes seven months of continued employment could be adequate consideration under some circumstances. Importantly, he disagreed with the majority’s interpretation of Mid-Town, in which an employee also resigned after seven months with the new employer. In that case, he wrote, the facts differed considerably because the employee had been promoted as an incentive to sign a post-employment restrictive covenant, and quit after the promotion was later rescinded:

“To hold, as the majority does here, that an employee can void the consideration for any restrictive covenant by simply quitting for any reason renders all restrictive employment covenants illusory in this state. They would all be voidable at the whim of the employee.”
Because he also feels there are genuine issues of material fact at hand, Judge Schmidt wrote that he would prefer to reverse and remand the case.

DiTommaso-Lubin has an active practice in Chicago restrictive covenant litigation, in which we represent employers, employees and other parties seeking to protect their business interests and rights. In fact, we handle all types of breach of contract lawsuits in Illinois, including non-competition clauses, shareholder disputes and real estate litigation. Click here to see a summary of some of the cases we have litigated. Based in Chicago and Oakbrook Terrace, Ill. near Oak Brook, Joliet, Aurora, Elgin, Naperville and Wheaton, we handle business disputes throughout the state of Illinois as well as in Indiana and Wisconsin. If you need an experienced attorney’s help with your own business dispute and you’d like to learn more, you can