Chicago Business Litigation Lawyer Blog

Understanding LLC Member Oppression in Illinois: Rights, Remedies, and Legal Recourse

December 4, 2023 | Peter S. Lubin and James V. DiTommaso

Limited Liability Companies (LLCs) have become a popular choice for business owners due to their flexibility and liability protection. However, in the realm of LLCs, disputes among members can arise, leading to conflicts and, in some cases, member oppression. In the state of Illinois, LLC member oppression is a serious issue that demands attention and understanding to navigate legal complexities and seek appropriate remedies.

Understanding LLC Member Oppression: LLC member oppression refers to situations where the majority members of an LLC engage in conduct that unfairly prejudices the rights or interests of minority members. These oppressive actions can take various forms, such as excluding minority members from decision-making, withholding crucial information, mismanagement of company affairs, or diverting opportunities that could benefit the LLC.

In Illinois, LLCs are governed by the Illinois Limited Liability Company Act (805 ILCS 180). This act provides a legal framework outlining the rights and responsibilities of LLC members and offers avenues for minority members who face oppression within the company.

Rights of LLC Members in Illinois: Under Illinois law, LLC members possess certain rights, including the right to access company records, participate in management decisions (unless otherwise specified in the operating agreement), and the right to fair treatment without discrimination or oppression. However, these rights can sometimes be compromised when majority members wield their power to the detriment of minority stakeholders. Continue reading ›

Navigating Internet Libel: Defending Review Posters’ Rights and Responsibilities Online

November 28, 2023 | Peter S. Lubin and James V. DiTommaso

In today’s digital era, online reviews wield substantial influence, helping consumers make informed decisions about products, services, and businesses. However, the power of user-generated reviews can sometimes lead to contentious situations, particularly when individuals or entities face accusations of internet libel due to their posted reviews. Understanding the defense mechanisms available to individuals posting online reviews is essential in safeguarding their rights while responsibly exercising their freedom of expression.

The Impact of Online Reviews:

Online reviews play a pivotal role in consumer decision-making. They offer insights, opinions, and firsthand experiences that influence potential customers’ perceptions. However, negative reviews can occasionally lead to accusations of libel if they’re perceived as defamatory or damaging to a business or individual. Continue reading ›

Unleashing Economic Freedom: The Illinois Freedom to Work Act

November 27, 2023 | Peter S. Lubin and James V. DiTommaso

In a dynamic world where the nature of work is evolving rapidly, the Illinois Freedom to Work Act stands as a beacon of hope for both employees and employers alike. This legislation, enacted in 2017, brought about significant changes in Illinois’ labor laws, fostering a more flexible and worker-friendly environment. In this blog post, we will delve into the key provisions of the Illinois Freedom to Work Act and explore how it has reshaped the employment landscape in the state.

Understanding the Illinois Freedom to Work Act

The Illinois Freedom to Work Act is a landmark piece of legislation designed to empower workers and enhance economic freedom. It eliminates the use of non-compete agreements for low-wage employees, providing them with the opportunity to seek employment without restrictions after leaving a job. The act was signed into law by then-Governor Bruce Rauner and has since created a more level playing field for employees in Illinois.

Key Provisions of the Act

Non-Compete Agreements Limited: One of the primary aims of the Illinois Freedom to Work Act is to restrict the use of non-compete agreements for low-wage employees. This means that workers in lower-income positions are no longer bound by these restrictive covenants that prevented them from pursuing similar roles in the same industry after leaving their current job.
Minimum Wage Threshold: To be considered a low-wage employee under the act, the individual’s earnings must not exceed the greater of either the applicable federal, state, or local minimum wage. This ensures that the legislation targets those who are most vulnerable to exploitation in the labor market.
You must be given 14 days to review the agreement and told you have an opportunity for lawyer to review of the agreement.
Protecting Employee Rights: The Act empowers workers by allowing them to challenge non-compete agreements in court. If an employer enforces an invalid non-compete agreement against a low-wage employee, the employee can seek legal remedies, including injunctive relief and damages.

Learning About Non-Compete Agreements in Illinois: What You Need to Know

November 27, 2023 | Peter S. Lubin and James V. DiTommaso

Non-compete agreements, often called restrictive covenants, are common legal tools used by employers to protect their business interests. In the state of Illinois, these agreements are subject to specific rules and regulations that both employers and employees should understand. This blog post will provide an overview of non-compete agreements in Illinois, including their purpose, enforceability, and key considerations.

Purpose of Non-Compete Agreements

Non-compete agreements serve as legal contracts between employers and employees. The primary purpose of these agreements is to protect the employer’s legitimate business interests. These interests may include safeguarding trade secrets, customer relationships, and preventing unfair competition. Non-competes are typically used in industries where employees have access to sensitive information and trade secrets, such as technology, healthcare, and finance.

Enforceability in Illinois

Illinois, like many states, has specific laws and regulations regarding non-compete agreements to balance the interests of both employers and employees. In general, for a non-compete agreement to be enforceable in Illinois, it must meet the following criteria:

Legitimate Business Interest: The non-compete must protect a legitimate business interest, such as confidential information, trade secrets, customer relationships, or specialized training.
Reasonable Scope: The agreement’s restrictions must be reasonable in terms of geographic scope, duration, and the nature of the activities restricted. Overly broad restrictions may be deemed unenforceable.
Adequate Consideration: The employee must receive adequate consideration in exchange for signing the agreement. This can include a job offer, a raise, or other benefits.
Public Policy: The agreement must not violate public policy or statutory law. For example, non-competes cannot prevent employees from pursuing their livelihood or career.
Special Provisions for Low-Wage Employees: Illinois law contains special provisions that limit the use of non-compete agreements for low-wage employees, making it more difficult for employers to enforce them in these cases.

Good Faith and Fair Dealing Requirements for Corporate Managers Impacts Oppression Litigation

November 26, 2023 | Peter S. Lubin and James V. DiTommaso

In Illinois, as in many other jurisdictions in the United States, co30-333rporate or LLC oppression lawsuits typically involve allegations of minority shareholders or members being treated unfairly or in bad faith by the majority shareholders or members. These lawsuits are often brought under various legal theories, such as breach of fiduciary duty or breach of the implied covenant of good faith and fair dealing. Below are some key points related to fairness and good faith in Illinois corporate or LLC oppression lawsuits:

Fiduciary Duties: Shareholders in corporations and members in LLCs owe certain fiduciary duties to the company and to each other. These duties include the duty of loyalty and the duty of care. Majority shareholders or members have a duty to act in good faith and fairness when dealing with the company and minority shareholders or members.
Business Judgment Rule: Illinois, like most states, applies the business judgment rule, which generally provides protection to corporate or LLC directors and officers for their decisions as long as they are made in good faith, with due care, and in the best interests of the company. However, the rule does not shield them from liability for self-dealing or actions taken in bad faith.
Oppression Claims: Minority shareholders or members may bring oppression claims if they believe that the majority has engaged in oppressive, fraudulent, or unfairly prejudicial conduct that harms their rights and interests. Courts will examine whether the conduct was done in bad faith and whether it resulted in oppression or unfair treatment.
Judicial Remedies: If a court finds that oppression or unfair treatment has occurred, it may order a variety of remedies, such as a buyout of the minority’s interest, a dissolution of the company, or other equitable relief designed to rectify the harm and protect the minority’s rights.
Operating Agreements and Shareholder Agreements: The terms of the operating agreement (for LLCs) or the shareholder agreement (for corporations) often play a significant role in determining the rights and obligations of the parties involved. These agreements may contain provisions related to governance, dispute resolution, and protections against oppression.
Good Faith and Fair Dealing: In addition to specific statutory and fiduciary duties, Illinois law recognizes the implied covenant of good faith and fair dealing in contracts, including operating agreements and shareholder agreements. This implies that parties must act honestly and fairly in their dealings with each other, and they should not act to undermine the other party’s reasonable expectations.

Fair Reporting Privilege Defense in Illinois: A Shield Against Libel Claims

November 12, 2023 | Peter S. Lubin and James V. DiTommaso

The First Amendment right to freedom of the press is fundamental to a democratic society, but it’s not absolute. Journalists and media organizations must strike a balance between reporting the news accurately and protecting individuals’ reputations. In Illinois, the fair reporting privilege defense serves as a crucial legal safeguard against libel claims when reporting on matters of public interest. In this blog post, we’ll explore the fair reporting privilege in Illinois, its significance, and how it applies to libel cases.

Understanding the Fair Reporting Privilege

The fair reporting privilege is a legal doctrine that protects journalists and media outlets from defamation claims when reporting on matters of public interest. It recognizes the importance of a free press in informing the public and encourages open and honest reporting. The privilege allows reporters to cover governmental proceedings, official statements, and public documents without fear of defamation liability, even if the information later proves to be incorrect.

Key Elements of the Fair Reporting Privilege in Illinois

To successfully assert the fair reporting privilege defense in Illinois, several key elements must be met:

Public Interest: The report must involve a matter of public interest. This typically includes governmental actions, public meetings, official statements, and other topics that are of concern to the public.
Accuracy: While the privilege protects reports that are substantially accurate, it does not cover intentionally false statements or reckless reporting. Journalists must still exercise reasonable care in verifying the information they report.
Fair and Neutral Reporting: The report should be fair and neutral, presenting the facts without undue bias or distortion. Deliberate attempts to harm someone’s reputation with willful false statements will not be protected.

Navigating Non-Compete Agreements: Key Illinois Court Decisions

November 10, 2023 | Peter S. Lubin and James V. DiTommaso

Non-compete agreements are a common tool used by employers to protect their business interests. However, these agreements must strike a balance between safeguarding legitimate business concerns and respecting an employee’s right to pursue their career. Over the years, Illinois courts have issued several crucial decisions that provide guidance on the enforceability of non-compete agreements. In this blog post, we’ll explore some of these key Illinois court decisions and their implications for both employers and employees.

Recent Illinois decisions on non-compete agreements have clarified several important points:

1) Non-compete agreements under Illinois law are only enforceable if they protect a party’s legitimate business interests, as determined from the totality of the circumstances. This includes the near-permanence of customer relationships, the employee’s acquisition of confidential information through their employment, and time and place restrictions. Illinois law requires that in order be enforceable, a covenant not to compete must secure a “protectable interest” of the employer. Illinois courts recognize at least two such protectable interests: (1) where the customer relationships are near-permanent and but for the employee’s association with the employer the employee would not have had contact with the customers; and (2) where the former employee acquired trade secrets or other confidential information through his employment and subsequently tried to use it for his own benefit.

2) Non-compete provisions in employment agreements, which restricted distributor’s employees from engaging in post-employment activities of soliciting or inducing other employees to leave distributor’s employment, were found invalid restraints on trade, in that, provisions did not serve to protect any legitimate business interest recognized under Illinois law.

3) Non-compete clauses in employment agreements are unenforceable when they (1) impose restrictions greater than those necessary to protect legitimate interests of the protected party, (2) are oppressive to the restricted party, or (3) are harmful to the general public. Such was the case in Mickey’s Linen v. Fischer where Illinois decisions supported modifying a non-solicitation provision to cover only those customers for which the former employee had responsibility, and that the severability provision in Fischer’s Employment Agreement makes that result particularly appropriate.

4) In Unisource Worldwide, Inc. v. Carrara, the court ruled that where an employment contract is ambiguous and unintelligible, the non-compete clause in the agreement is unenforceable because there is no definite agreement on the essential terms of the restrictive covenant.

5) Lastly, in Vencor, Inc. v. Webb, the court found that a non-competition agreement is not contrary to the fundamental public policy of the state of Illinois, and thus Illinois law must govern this dispute. Here, both parties elected to have the agreement governed by Kentucky law, and the court discerned no reason why an Illinois court would find the agreement to be contrary to Illinois public policy.

Conclusion

Illinois court decisions on non-compete agreements have evolved to strike a balance between safeguarding legitimate business interests and protecting the rights of employees. Employers must carefully craft non-compete agreements that are reasonable in terms of duration, geographic scope, and the scope of activities restricted. Adequate consideration is a crucial factor, especially when entering into non-compete agreements with at-will employees.

For employees, understanding the enforceability of non-compete agreements and their rights is essential. Consulting with legal counsel is advisable when faced with the prospect of signing a non-compete agreement or when challenging the enforceability of an existing agreement.

These court decisions have helped shape the landscape of non-compete agreements in Illinois, emphasizing the importance of fairness and reasonableness in these contractual arrangements. It’s crucial for both employers and employees to stay informed about these legal developments to ensure that their rights and interests are protected. Continue reading ›

Navigating the Legal Landscape: Recent Consumer Fraud Act Opinions in Illinois Courts

November 1, 2023 | Peter S. Lubin and James V. DiTommaso

Consumer protection is a cornerstone of the legal system, and the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) plays a pivotal role in safeguarding consumers from deceptive practices. Recent opinions from the Illinois Supreme Court and various state and federal courts in Illinois have provided crucial guidance on the interpretation and application of the ICFA. In this blog post, we will explore some of these significant opinions and their implications for consumers and businesses.

“Here are some recent Illinois consumer fraud decisions and their key holdings:

1. “Cellular Dynamics, Inc. v. MCI Telecommunications Corp.” (Decided on April 12, 1995). The court held that under the Illinois Consumer Fraud Act, a single deceptive act is sufficient to support recovery and the plaintiff’s failure to allege a public wrong is not fatal to its claim [2].

2. “Barbara’s Sales, Inc. v. Intel Corp.” (Decided on November 29, 2007). The court determined that the Illinois Consumer Fraud and Deceptive Business Practices Act applies only to fraudulent transactions which take place primarily and substantially in Illinois [3, 4].

3. “Costa v. Mauro Chevrolet, Inc.” (Decided on July 18, 2005). The court ruled that assignee of retail installment contract for car sale had no derivative liability under the Illinois Consumer Fraud Act . The court also noted that the FTC Holder Notice has been largely superseded by subsequent federal legislation, namely, section 1641(a) of TILA.

4. “Camasta v. Jos. A. Bank Clothiers, Inc.” (Decided on August 1, 2014). The court found that to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act, a plaintiff must show: a deceptive or unfair act or promise by the defendant; the defendant’s intent that the plaintiff rely on the deceptive or unfair practice; and that the unfair or deceptive practice occurred during a course of conduct involving trade or commerce. In a private action under this act, the element of actual damages requires that the plaintiff suffer actual pecuniary loss.

5. “Rudy v. Family Dollar Stores, Inc.” (Decided on February 4, 2022. The court emphasized that the Illinois Consumer Fraud and Deceptive Business Practices Act is designed to protect consumers, borrowers, and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices.

6. “Landau v. CNA Financial Corp.” (Decided on March 26, 2008). This case reiterated that the Illinois Consumer Fraud and Deceptive Business Practices Act does not have extraterritorial effect and does not apply to fraudulent transactions that take place outside Illinois.

7. “Avery v. State Farm Mut. Auto. Ins. Co.” (Decided on August 18, 2005). The court held that the Illinois Consumer Fraud Act could be applied to consumers residing out-of-state if the deceptive acts and practices were perpetrated in Illinois.

8. “Freeman v. MAM USA Corporation” (Decided on March 23, 2021). The court provided a refined explanation of what a plaintiff must allege in order to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act.

9. “Dwyer v. American Exp. Co.” (Decided on June 30, 1995). This case added that in order to successfully claim under the Illinois Consumer Fraud Act, plaintiffs must also show how they were damaged.

10. “Troutt v. Mondelēz Global LLC” (Decided on October 31, 2022). This case reiterated the broad prohibitions of the Illinois Consumer Fraud Act against unfair or deceptive acts or practices in the conduct of trade or commerce.

11. “Sneed v. Ferrero U.S.A., Inc.” (Decided on February 15, 2023). The court stated that an accurate ingredient list does not immunize a defendant from a deceptive front label under the Illinois Consumer Fraud Act, but it is relevant to determining whether reasonable consumers would be misled

Implications for Consumers and Businesses

These opinions from Illinois courts highlight the continued significance of the ICFA in protecting consumers from deceptive and fraudulent business practices. For consumers, these opinions underscore their rights to pursue legal action when they believe they have been victims of consumer fraud.

For businesses, these opinions serve as a reminder of the importance of conducting business practices in a transparent and ethical manner. Adhering to the ICFA and avoiding deceptive practices is not only legally required but also crucial for maintaining a positive reputation and avoiding costly legal battles.

In conclusion, the Illinois Consumer Fraud and Deceptive Business Practices Act remains a critical tool for consumer protection in Illinois. Recent opinions from both state and federal courts in Illinois reinforce the Act’s role in safeguarding consumers and promoting fair and honest business practices. It is essential for both consumers and businesses to stay informed about these developments and seek legal guidance when necessary to ensure compliance with the ICFA.

Recent llinois Supreme Court Decisions: Highlights

October 30, 2023 | Peter S. Lubin and James V. DiTommaso

The Illinois Supreme Court plays a crucial role in shaping the legal landscape of the state. June 2021 saw the release of several significant decisions that have far-reaching implications for Illinois residents, businesses, and the legal community. In this blog post, we will explore some of the notable recent Illinois Supreme Court decisions.

1. People v. Aguilar, 2013 IL 112116: The court addressed the Second Amendment to the United States Constitution and found a statute, which prohibits the possession and use of an operable firearm for self-defense outside the home, unconstitutional, thus reversing the defendant’s aggravated unlawful use of weapons conviction.

2. People v. Burns, 2015 IL 117387: This case also addressed a similar Second Amendment issue.

3. People v. Chairez, 2018 IL 121417: This decision pertained to a different statute, but the specific ruling is not mentioned.

4. Yakich v. Aulds, 2019 IL 123667: The court clarified that the circuit and appellate courts of the State of Illinois must apply binding precedent from the Illinois Supreme Court.

5. People ex rel. Daley v. Datacom Sys. Corp., 585 N.E.2d 51 (Ill. 1991): The court agreed that “only the Department (of Financial and Professional Regulation) had standing to pursue civil violations of the Collection Agency Act”.

6. Maksimovic v. Tsogalis, 177 Ill.2d 511: The court clarified that preemption by the Illinois Human Rights Act (“IHRA”) is limited to situations where the claim made is dependent on a legal duty imposed by the IHRA. If the claim exists independent of any legal duty of the IHRA, the claim is not preempted.

7. Hale v. Committee on Character and Fitness for State of Illinois: The court allowed to stand a decision by the state bar character and fitness committee’s rejection of a bar applicant’s application. The court affirmed that the proceedings were “judicial proceedings,” and that the decision was an “adjudication” in which the applicant was able to litigate his constitutional challenges.

8. Blumenthal v. Brewer, 2016: In this case, the court affirmed that the appellate court does not have the authority to overrule a decision by the Illinois Supreme Court and discussed the implications of such an attempt

Conclusion

The Illinois Supreme Court decisions issued in June 2021 reflect the court’s commitment to upholding constitutional rights, clarifying legal principles, and ensuring fairness in various areas of law, from criminal procedures to civil litigation and attorney discipline. These rulings have a lasting impact on the legal landscape in Illinois and serve as important precedents for future cases. It is essential for legal professionals, scholars, and anyone with an interest in the law to stay informed about these decisions and their implications.

Alex Jones Can’t Use Bankruptcy to Avoid Paying Sandy Hook Families

October 29, 2023 | Peter S. Lubin and James V. DiTommaso

You’ve probably already heard of Alex Jones, but if you haven’t, or you need a refresher, he’s the right-wing conspiracy theorist who has used his media company, InfoWars, to promote the idea that the Sandy Hook Elementary School shooting was a giant hoax created and promoted by anti-gun activists. Among other things, Jones claimed the grieving families and survivors of the massacre were “crisis actors” who were paid to lie about the mass shooting.

Jones has built a huge following, and many of them believe his lies. Many of his listeners even reached the point of actively seeking out Sandy Hook survivors and the families of those slaughtered, threatening and harassing them for their alleged lies.

The families sued Alex Jones for defamation and were collectively awarded $1.1 billion in damages.

Soon after that ruling, Jones filed for Chapter 11 bankruptcy, which would have allowed him to restructure his business and potentially avoid paying the money he owes those families.

A judge recently ruled that Jones could not use bankruptcy as a means to avoid paying the $1.1 billion payments. The families took this as a victory, but Jones says he isn’t done fighting.

Jones’s net worth was valued at $14 million, yet he claims he has no money. He says he is $1 million in debt, and that the millions of dollars generated by his media company go to pay the bills, making the $1.1 billion ruling hypothetical. He also says he will continue to appeal the decision.

Meanwhile, he is asking his listeners to make donations to help him pay his legal bills. But those bills and the huge ruling against him have not stopped him from spending close to six figures in one month, much of it on lavish meals and entertainment. Continue reading ›