The Future of Covenants Not to Compete in Illinois is Up in the Air

Recently, in Reliable Fire Equipment Company v. Arredondo, at al., the Illinois Supreme Court reviewed a case regarding non-compete agreements. The Court initially reviewed the case in 2011, but the parties requested that the Supreme Court again review the case. In March 2012, the Court denied re-examining the case.The Future of Covenants Not to Compete in Illinois is Up in the Air

According to the Supreme Court’s opinion, Reliable Fire Equipment Company sued two of its former employees and the former employees’ new employer, alleging that the employees violated a non-compete contract that restricted their employment. Reliable Fire filed the original lawsuit in 2004, claiming that the former employees solicited Reliable Fire’s clients and recruited other Reliable Fire employees after leaving the employment of Reliable Fire. The trial court ruled that the covenant not to compete was unenforceable. The case was appealed and appealed again until it came before the Illinois Supreme Court.

The Court reviewed the state’s non-compete law and clarified the law stating that a trial court must consider the following in determining whether a non-compete agreement is an enforceable, valid contract: 1) the restraint in question is necessary to protect a legitimate interest of the employer; (2) the restraint imposes a hardship on the employee or the public; and (3) the extent or scope of the restraint is otherwise reasonable. The Court handed the case back to the lower court for further analysis and the trial court has not yet made its, what we hope, is a final determination as to whether the contract in question is enforceable, and if so, whether the former employees breached the contract.

If you are finding yourself in the middle of dispute regarding a covenant not to compete, you should hire a top notch Illinois business attorney who is quite familiar with this area of the law. The Gierach Law Firm in Naperville, Illinois, has skilled business lawyers who can advise you on how to handle your case.