Governor Pritzker has signed a bill creating Illinois’ first comprehensive statute regulating the use of non-compete and non-solicit covenants. The law establishes bright-line rules regarding which employees can be required to sign such covenants and creates a mandatory pre-signature process designed to protect employees. The statute also codifies existing Illinois case law without changing it substantially.Continue reading
Bad facts make bad law, the saying goes. In the non-compete world, it might more aptly be said that filing a weak lawsuit against a sympathetic defendant makes bad law.
A recent decision by the Illinois Appellate Court is a good example. The court refused to enforce a non-solicitation agreement that many judges would have upheld under the right circumstances. The likely (if unspoken) reason? The defendant was a low-wage employee who fixed car dents for a living and who hadn’t done anything particularly wrong after quitting his job.Continue reading
It is well-settled that a non-compete must include a reasonable time limitation in order to be enforceable. Most employers understand this requirement and limit the duration of the their non-competes (and non-solicits) to 2 years or less.
But what about confidentiality/non-disclosure provisions in employment agreements? Must they also contain time limitations?Continue reading
Can a former employee be sued for violating a non-competition agreement in a State the employee has never set foot in? The answer, according to the U.S. District Court for the Northern District of Illinois in Tekway, Inc. v. Agarwal, 19-CV-6867 (Oct. 7, 2020), is quite likely “Yes” if that State is where the employer is based and the employee has “directed” conduct to that State.Continue reading
A recent federal court decision is good news for Illinois companies looking to use a “no-recruit” agreement to prevent employees from soliciting co-workers to join a competitor.Continue reading
A new decision from the U.S. Court of Appeals for the 6th Circuit reminds us how important choice-of-law can be in non-compete agreements. In this case, the choice of law clause was likely the difference between success and failure for an employer seeking an injunction enforcing its non-compete. Continue reading
Does a new hire having a non-compete expose the hiring firm to liability for improper interference, even where the new hire contacted the firm in response to general advertising and there was no targeted recruiting? The answer appears to be yes, at least according to a recent decision by the U.S. Court of Appeals for the Eighth Circuit. Continue reading
In a decision that may contain some useful reminders as businesses rehire employees who were let go during the coronavirus pandemic and economic downturn, the U.S. Court of Appeals for the First Circuit recently handed down a decision affirming the denial of a former employer’s request to enforce a non-competition agreement against an employee it had terminated and then rehired. Russomano v. Novo Nordisk Inc., No. 20-1173 (Ist. Cir. June 2, 2020).
The employer did not have the employee sign a new agreement upon rehire, but instead tried to rely on the his original agreement. The First Circuit held that the non-compete ran from the date of the employee’s original termination and expired one year into his rehire, leaving him free to compete after its expiration. Continue reading
When it comes to non-competes in the health care industry, the doctor/patient relationship has sometimes taken a back seat to business considerations. That is changing in Indiana, where a new law adds requirements for physician non-competes that will make it easier for patients to follow their doctor to a new practice group or medical center. Continue reading
Many believe that a non-compete agreement is never enforceable in California. A recent decision by the California Court of Appeal shows that there may be some protection afforded by such an agreement, at least as against competition during the employment relationship. Continue reading