All contracts are subject to scrutiny before the law, especially when a dispute arises. Employment-employer disputes are no exception. Federal and state‑specific restrictions are
now facing employers who utilize non‑compete agreements and such agreements are able to be stricken for unrelated employment issues. This is since the Appellate Division of the New
Jersey Superior Court has provided a warning to an employer had no ability to prevent its former employee from working for its direct client despite the existence of a non‑compete
agreement expressly covering that client. This was of particular concern since the employee was not paid properly by the employer during her training period. It was because the
employment and non‑compete “agreements violated federal law, they were void and unenforceable.”
This brings to light notions such as the importance of fair and just contracts, as well as, the unconscionability. If ever a contract has an abuse of power or is in favor of one party over the
other, it will violate the law. The employers must take this into consideration when drafting terms and have them reviewed by attorneys who are familiar with restrictive covenants within
the scope of employment law.
Common industries that restrict a worker’s mobility includes the fast food industry. Researchers also examined contracts in other sectors to determine whether they also blocked employees
from switching between franchises, or between corporate-owned locations and franchises. In fact, it is agreements such as these that have contributed to the lack of increase in
wages for employees across the board, with decreased competition in the amount of pay that employees receive. It significantly reduces pay as one is not able to move over to a
rival as readily.
“Ubiquitous” provisions among the companies and appeared to exist to limit both competition and turnover, which can keep labor costs low. Moreover, low-educated,
low-wage workers are not generally exposed to trade secrets. Restrictions were placed when not even required.
The rate of turnover rate is high in the industry and the prohibition of franchisees from hiring other talented persons is protected by restrictive covenants. It is not uncommon for
franchises to include such clauses in agreements with employees and as such provide a recruitment prohibition. This all has contributed to the puzzle that has remained in the U.S. job market, being that unemployment reaching a sixteen year low and job openings being at an all-time high. The wage growth has been sluggish without an explanation. The usage of such covenants has
impacted this severely and detrimentally to the wage market. Thus, in the interests of fairness, for better employee relations and for the overall U.S. economic market, we would recommend the usage of fair and just contracts that are not restrictive. In the long run, such agreements are most likely never rendered void and to go to a court for further examination or clarification. It saves costs in the long run.
Our Schaumburg and Naperville 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.
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.
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 Lincolnwood and Evanston non-compete agreement and business dispute lawyers take cases from Gurnee and Libertyville 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 (833) 306-4933 today.
Lubin Austermuehle’s Oak Brook, Naperville and Waukegan 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 Skokie and Glencoe, we serve clients throughout Illinois and the Midwest.