When a staffing company hires professional recruiters, they probably don’t anticipate that they’ll recruit the company’s own employees to a competing staffing company, but that’s allegedly what a former director for Randstad did.
Randstad, a leader in the world of industry staffing and recruiting, recently filed a lawsuit against four former employees who allegedly left their positions at Randstad, without notice, to allegedly set up a competing staffing company just down the street from Randstad. The lawsuit alleges that the former director took his entire team, including two executive recruiters and the company’s office administrator, with him to work at the new staffing company he had just set up.
According to the complaint, Randstad’s former director knew that the two executive recruiters he was taking with him had signed confidentiality and non-compete agreements that prevented them from working for a competing company in the same geographic area for at least one year after their employment with Randstad had been terminated. The agreements also allegedly prohibited them from taking either clients or employees away from Randstad.
The complaint does not yet allege that the former employees stole customers away from Randstad, but it alleges that the fact that they started another staffing firm not far from Randstad’s offices should be sufficient to prove they posed a risk to Randstad’s business.
Randstad filed its lawsuit in the U.S. District Court for the Northern District of Georgia and is seeking damages, as well as injunctive relief.
The fight over non-compete agreements has gotten contentious recently, as employers have continued to expand their non-compete clauses to include more employees, longer time limits (or no time limits) and greater (if any) geographic limitations. Some states have gone so far as to ban non-compete agreements altogether, with California going furthest by refusing to recognize any non-compete agreement, even if it was created and signed in a state that does allow such clauses in employment contracts.
That said, most states, such as Illinois, do still enforce non-compete agreements, as long as they’re deemed reasonable. In order for a court to consider a non-compete agreement enforceable, the agreement cannot be overly restrictive, meaning it cannot leave the worker with no choice whatsoever but to continue working for their current employer.
While business advocates have long argued that non-compete agreements are necessary for protecting a company’s business interests, most courts have required companies to prove that a non-compete agreement only protects the company’s legitimate business interests. Not every non-compete agreement brought to court has succeeded in meeting the necessary requirements, and whether Randstad’s agreements will stand up to the court’s tests has yet to be determined.
Either way, it should be interesting to watch this most recent lawsuit over non-compete agreements unfold. Although there is never any certainty when filing a lawsuit, and the world of non-compete agreements has grown increasingly unsteady, the unique circumstances under which Randstad recently lost four employees in one fell swoop might be enough to convince the court that the alleged actions of the defendants posed a serious risk to Randstad’s legitimate business interests.
Our Elgin 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 Hinsdale and Willowbrook 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.
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DiTommaso Lubin Austermuehle’s Oak Brook and Schaumburg non-compete agreement 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 Gurnee and Waukegan, we serve clients throughout Illinois and the Midwest.