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, compensation-based 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.
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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.
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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.
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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.
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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
A common issue when advising an employee changing jobs is how to deal with company information on the employee’s phone or personal laptop. Should the employee simply delete it? Or should a forensic copy be made before deletion to preserve evidence in anticipation of litigation?
A recent decision by U.S. District Court for the Northern District of Illinois gives comfort to those who opt for the more pragmatic approach of simply deleting the data. Even so, the case suggests steps that could have been taken to avoid litigation and a claim of destruction of evidence. Continue reading
In Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F. Supp.3d 888 (N.D. Ill., 2019), U.S. District Court Judge Tharp of the Northern District of Illinois provides a virtual checklist of the steps a company should consider if it wants its important information to be treated as a trade secret. Alternatively, the decision serves as a valuable reminder of what happens if an employer fails to implement appropriate protective measures. Continue reading
In reversing the trial court’s grant of a preliminary injunction, the Illinois Appellate Court in Archer Daniels Midland Company v. Sinele et al., (2019 IL App 4th 180714, decided February 1, 2019) reminds employers that the doctrine of inevitable discovery is not a foolproof substitute for enforceable post-employment restrictions on competition. Continue reading
A federal court, in a non-competition setting, had to untangle the relationship between three separate agreements. One contained an arbitration provision but the others did not. Ultimately, the court determined that some parties had to arbitrate some claims but that others did not have to arbitrate. Continue reading
A recent federal decision from the Northern District of Illinois again illustrates the perils of drafting and attempting to enforce overbroad restrictive covenants. In the case of Medix Staffing Solutions, Inc. v. Dumrauf, 17-cv-6648, 2018 WL 1859039 (N.D.Ill. Apr. 17, 2018)(Ellis, J.), Medix, a pharmaceutical, biotech and medical device company, attempted to enforce a non-compete agreement against its former Director, Dumrauf, who had been responsible for its medical sales and recruiting strategies and who had left to work for a direct competitor, ProLink. Continue reading
H2 Non-Compete & Trade Secrets Law Blog 