Chicago Business Litigation Lawyer Blog

Legit Enough to Quit? Restrictive Covenants and Legitimate Business Interests

January 22, 2015 | Peter S. Lubin and James V. DiTommaso

Legit Enough to Quit?
Restrictive Covenants and Legitimate Business Interests

As means of protecting ones business, it may seem that a restrictive covenant is one of the most secure. However, a restrictive covenant does not always provide the magnitude of protection wanted by those who enter into such an agreement. A three prong test of reasonableness must be satisfied. The covenant must serve a legitimate business interest, it must not impose an undue hardship and it must not be injurious to the public. Without a legitimate business interest, a restrictive covenant may not be enforceable.

A prime example of the necessity of a legitimate business interest to sustain a restrictive covenant can be seen in Gastroenterology Consultants of North Shore, S.C. v. Meiselman, 2013 IL App (1st) 123692, 989 N.E.2d 1126 appeal denied, 996 N.E.2d 12 (Ill. 2013). To achieve such a result, the company enforcing the non-solicitation agreement must demonstrate a legitimate business interest exists for such an agreement.

The Court takes a close look at the enforceability of a restrictive covenant when a doctor enters into such an agreement upon Plaintiff and later decides to take his professional work elsewhere. Plaintiffs try to enforce their restrictive covenant; however, the Court determines that the absence of a “legitimate business interest” renders the covenant unenforceable. Continue reading ›

How Long is Long Enough: Substantial Employment Standard for Non-Compete Agreements — Our Chicago Non-Compete Agreement Attorneys Litigate Non-Compete Agreement Cases Throughout the Chicago Area

January 21, 2015 | Peter S. Lubin and James V. DiTommaso

How Long is Long Enough: Substantial Employment Standard
for Non-Compete Agreements

Non-Compete covenants are among the strongest ways to protect against an employee potentially walking away with vital and, even more importantly, confidential information of the employer. Though it has long been established that timing plays a large role in whether or not an employment agreement is enforceable, a new holding has established that timing may not be everything when it comes to a post employment non-compete agreement.

A two-year time frame was considered to be the main threshold to satisfy “substantial” employment, however, the ruling in Montel Aetnastak, Inv.v. Miessen, 998 F. Supp. 2d 694 (N.D. Ill. 2014), demonstrates that because of inconsistencies between both lower Illinois courts and the Illinois Supreme Court, the implementation of a bright-line rule is not the determining factor when it come making a decision whether employment was “substantial”. Also, the Court determines that over broad post-employment non-compete covenant is not for the Court to narrow under the facts in that case. Continue reading ›

Claims Against Apple Relating to Apple Messenger Losing Texts Can Proceed

January 20, 2015 | Peter S. Lubin and James V. DiTommaso

Communicating with other people is arguably the only reason we own and maintain phones. As soon as cell phones became widely available, text messages became a primary means of communication between friends and family. It is therefore understandable that a cell phone user would become upset if prevented from accessing her text messages. This is allegedly the case with people who had an iPhone and switched to an Android or another non-iOS phone.

According to a recent class action lawsuit against Apple, the company allegedly prevented iMessages from being delivered to non-iOS phones, even though the sender of the message would see the status of the message as “Delivered”. Instead of going to the recipient’s new phone, the messages were being rerouted to their iMessage account.

Apple has released a statement saying that the best way to avoid the problem is for users to deactivate their iMessage account and completely disassociate their number from their iMessage account. That is not stopping Adrienne Moore from pursuing her class action lawsuit against the tech giant.

Moore alleges that Apple’s message blocking interfered with her contract with Verizon Wireless for wireless service, which she kept after switching from an iPhone 4 to a Samsung Galaxy S5. She alleges that Apple interfered with her contract with Verizon because her contract allowed her to send and receive text messages, which Apple allegedly prohibited. Continue reading ›

Odometer Fraud a Widespread Problem With Used Car Sales — Our Chicago Autofraud Lawyers Sue for Used Car Fraud

January 19, 2015 | Peter S. Lubin and James V. DiTommaso

Class Action Filed Against Linkedin for Alleged Privacy Violations of the Fair Credit Reporting Act

January 15, 2015 | Peter S. Lubin and James V. DiTommaso

The Fair Credit Reporting Act was enacted in 1970 to protect consumers from being unfairly denied a mortgage, rental apartment, or job based on incorrect credit histories. With the advent and growth of the Internet and social media, the Act has all sorts of applications that its creators could never have dreamed of.

Although, like most social media, LinkedIn provides many of its services for free, it also offers a service call “Reference Search” to its premium account holders who pay a monthly fee. This service allows an employer or recruiter to generate a list of people in its own network who worked at the same company at the same time as a job candidate. It also allows premium members to contact the people who appear on those lists using the site’s messaging system. All this can be done without the job candidate ever knowing.

Tracee Sweet, the lead plaintiff in the class action lawsuit against LinkedIn, applied for a job at a hotel chain via the social media site. She claims she was denied the job because the hotel company, without telling her in advance, used the site’s reference search to locate references on her.

Joseph Roualdes, a spokesman for LinkedIn, said the company takes its member privacy very seriously and that it intends to fight the lawsuit, which it insists has no merit. He said that, “A reference search, which is only available to premium account holders, simply lets a searcher locate people in their network who have worked at the same company during the same time period as a member they would like to learn more about. … A reference search does not reveal that member’s nonpublic information.” Continue reading ›

Breach of Employment Contract (Non-Renewal Option) — “Breaching Party Cannot Take Advantage of Contract It Breached”

January 14, 2015 | Peter S. Lubin and James V. DiTommaso

Breach of Employment Contract (Non-Renewal Option): Assaf v. Trinity Med. Ctr., 696 F.3d 681, 685-86 (7th Cir. 2012)

As the Seventh Circuit articulated in Assaf v. Trinity Med. Ctr., 696 F.3d 681, (7th Cir. 2012), Illinois forbids a party in material breach of a contract from taking advantage of terms in that contract which benefit him. The Seventh Circuit stated: “the simple rationale behind the Illinois rule, a classic rule of contract law, is that a party should be prevented from benefitting from its own breach.” Assaf v. Trinity Med. Ctr., 696 F.3d 681, 686 (7th Cir. 2012).

In Assaf, the plaintiff-appellant, Dr. Bassam Assaf was terminated from his position as director of the epilepsy clinic at Trinity Medical Center in Rock Island, Illinois. Dr. Assaf then sued Trinity in Illinois state court. The case was removed from state court to federal court on the basis of diversity jurisdiction. Continue reading ›

Uber Files Alleged Trade Secret Theft Case Against Former Executive

January 12, 2015 | Peter S. Lubin and James V. DiTommaso

Non-compete agreements are are commonly included in employment contracts, especially contracts for high-level executives. These agreements often require the employee to promise not to work for a competitor for a certain amount of time after leaving the company’s employment. They also usually require the employees to promise to protect the company’s trade secrets. Companies tend to be even more protective of their trade secrets when they are involved in a heated competition with another company.

One such company that has been kept on its toes is Lyft, a San Francisco-based ride-hailing company that allows customers to order a personal car using an app on their smartphone. Lyft has been in stiff competition with Uber, which provides similar products and services. The competition got tighter when Travis VanderZanden, Lyft’s former chief operation officer, left his position at the company, then went to work for Uber a mere two months later. Continue reading ›

20/20 Expose on Alleged Used Car Fraud at CarMax

January 12, 2015 | Peter S. Lubin and James V. DiTommaso

Consumers are complaining about alleged car fraud according to 20/20.

https://www.youtube.com/watch?v=iPfR0IicN-0#action=share

Claim for Failure to Pay Bonus Did Not Fall Within Illinois Wage Payment Act

January 10, 2015 | Peter S. Lubin and James V. DiTommaso

Freehauf v. TCB Design/Build, LLC, 2014 IL App (1st) 132928-U

“Claim for Failure to Pay Bonus Did Not Fall Within Illinois Wage Payment Act”

On September 5, 2014, the Illinois Appellate Court (1^stDistrict) affirmed the circuit court’s finding that the individual defendant, Mark Vandenberg, had not violated the Illinois Wage Payment and Collection Act.

The Plaintiff, Gregory Freehauf, had been employed by TCB Design/Build, LLC, whose sole manager was Vandenberg. Freehauf’s complaint alleged that on April 11, 2006, he was offered a promotion to become president of TCB, which he accepted. The complaint further alleged that in a letter dated August 24, 2006, TCB guaranteed him a year-end bonus of no less than $200,000.00.

Freehauf left TCB in June 2008 and claimed that TCB owed him $232,297.50 in unpaid bonus earnings for 2006, 2007, and a pro-rata portion of 2008. In 2010, Freehauf filed a complaint against TCB and Vandenberg for breach of contract and violation of the Wage Act for allegedly failing to fully compensate him for his bonus earnings. Continue reading ›

“You’re Hired: Now Hand Over the Goods”

January 8, 2015 | Peter S. Lubin and James V. DiTommaso

Trade Secrets: Buckley v. Abuzir, 2014 IL App (1st) 130469

“You’re Hired: Now Hand Over the Goods”

In addition to potential tax advantages, the principal reason to create a corporation is limited personal liability, which means that the debts and liabilities of the corporation are distinct from those of its shareholders. However, in certain circumstances, courts are empowered to ‘pierce the corporate veil’ and impose personal liability on the officers and potentially even the shareholders of a corporation if there has been gross undercapitalization of the corporation, or if corporate funds have been improperly comingled with non-corporate funds, or if it finds that a ‘sham’ corporation has been designed to improperly shield the individual directors or shareholders from personal liability.

What if, in order to obtain proprietary information, an employer created a sham corporation, hired you as an employee, and then claimed your former business’s lifeblood — all its proprietary trade secrets? That is what is alleged in the April 2014 Illinois appellate case, Buckley v. Abuzir, 2014 IL App (1st) 130469. Continue reading ›