All employers doing business in Illinois must be aware of a special rule regarding the enforceability of covenants not to compete, which may apply, depending on where their business is located. In Fifield v. Premier Dealer Servs., 2013 IL App (1st) 120327, the Illinois First District, which covers Cook County (including Chicago), held that an employee must generally remain employed for at least two years in order for a restrictive covenant to be enforceable. That decision applies in Cook County, and has also since been followed in the Illinois Third District, which covers 20+ counties in North-Central Illinois.
Federal courts in Chicago and Central Illinois have since split on whether to follow this rule. Recently, the Northern District of Illinois (federal), in Traffic Tech, Inc. v. Kreiter, 2015 WL 9259544, at * 5 (N.D. Ill. Dec. 18, 2015), did not follow Fifield, and refused to find a lack of consideration as a matter of law where the employee, among other things, worked for nine months. Accordingly, there remains a lack of uniformity in Illinois regarding the application of the two year rule, and employers must be careful to understand whether it applies to a specific employee.
Illinois employers – and non-Illinois companies with employees in Illinois – must also be careful regarding the language used in “non-solicitation” covenants. In Capstone Fin. Advsrs. v. Plywaczynski, 2015 Il App. (2d) 150957, the Illinois Second District drew a distinction between “solicitation” and “contact” of clients. In the case, Defendant Plywaczynski, who was a certified financial planner, resigned and telephoned each of his former customers using a script. Pursuant to the script, he provided new contact information. Then, if the customer asked about moving business to his new employer, he told them how to do so. If the customer asked about remaining with Capstone, he gave them that information instead. The Second District denied the former employer’s motion for a temporary restraining order, distinguishing “solicit” from “contact,” and finding that not every client “contact” constitutes a “solicitation.” The court determined that the Defendant’s initial conversation was merely a “contact,” and that any business discussion would have been initiated by the client, rendering the information regarding moving of business not a solicitation.