Consider this dilemma: You work in a low-paying job for a check-cashing service and you want to quit your job and change employers. What are your practical options outside of applying for opportunities at similar establishments? A recent lawsuit against an Illinois employer addresses this issue.
An Illinois payday lender has been sued by the state attorney general for forcing its low-wage employees to sign overly restrictive, unlawful non-compete agreements. According to the complaint filed October 25 in Cook County Circuit Court, Check Into Cash of Illinois, LLC requires customer service employees at all its 33 Illinois locations, including those earning less than $13 per hour, to sign a non-compete agreement as a condition of employment, in violation of the state Freedom to Work Act and Consumer Fraud and Deceptive Practices Act.
The noncompetes prohibit Check Into Cash employees from working “directly or indirectly” for any other business that provides consumer lending services or products for one year after they leave the company. These include any paycheck advance services, check-cashing services, pawn services, credit lending services, or any other money transmission service. The geographic territory off limits to former employees consists of businesses within 15 miles of any Check Into Cash location, not only in Illinois but in 32 other states where the parent company operates retail stores.
The complaint alleges the noncompete language is impermissibly broad and could encompass a wide range of businesses including retail stores or auto dealerships that offer credit, or entities that transmit money such as Western Union or the U.S. postal service. The agreements “severely limit employees’ future employment options, thereby harming these employees and the State,” the complaint claims. In addition, the state argues that the confidential and proprietary business information the noncompetes purport to protect are separately protected by other provisions of the company’s employment agreement.
“Check Into Cash inappropriately tries to retain low-income workers by requiring them to sign unfair noncompete agreements that attempt to prevent workers from getting better jobs elsewhere,” Illinois Attorney General Lisa Madigan said in a press release.
Illinois law requires noncompete agreements to be necessary to protect an employer’s legitimate business interests and reasonable in terms of time, activity, and geographic area. Furthermore, the Illinois Freedom To Work Act, which went into effect January 2017, prohibits non-compete agreements entirely for employees earning less than $13 an hour.
The state is seeking a declaratory judgment that the agreements are unenforceable and void, as well as an order requiring the company to notify affected current and former employees of the same.
According to government figures, nearly one in five workers in the U.S. is affected by noncompete agreements, including roughly one in six workers without a college degree.
Madigan’s office launched a successful challenge to a similar policy against the sandwich chain Jimmy John’s in 2016 and has signaled that it intends to actively enforce the Freedom to Work Act. All Illinois businesses that employ noncompetes would be wise to ensure that their agreements comply with this new law.
The case is People of the State of Illinois v. Check Into Cash of Illinois, LLC.
Our Illinois non-compete agreement attorneys have defended high-level executives in a covenant not to compete and trade secret lawsuits. 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 Austermuehle a firm of Chicago business dispute lawyers 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 lawyers with offices near Highland Park and Deerfield have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results. We have successfully represented a number of doctors in non-compete, partnership, and other business disputes. We understand the complexities of physician partnership and non-compete agreements.
DiTommaso Lubin Austermuehle a Chicago business litigation law firm represents 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. Our firm has also handled many shareholders and LLC disputes between owners of closely held corporations, and LLCs.
Based in Oakbrook Terrace and downtown Chicago, our Orland Park and Elmhurst non-compete agreement and business dispute lawyers take cases from Naperville, Carol Stream, 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 one of our Chicago business dispute lawyers through the Internet or call toll-free at 1-877-990-4990 today.
DiTommaso Lubin Austermuehle’s Oak Brook and Westmont litigation attorneys have more than three decades of experience helping clients unravel the complexities of Illinois and out-of-state non-compete and trade secret theft laws. Our Chicago business dispute attorneys also represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners, shareholders, and LLC members as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Winnetka, Hinsdale and Lake Forest, we serve clients throughout Illinois and the Midwest.