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Non-Compete Clauses

Often time’s employers require their employees to sign a non-compete agreement or a non-solicitation of customers. This requires the employee to refrain from working for a given amount of time. Generally, the agreements favor the employer and seem to hurt the employee. An employer’s reasoning for enforcing these agreements is to protect their interests. They also prevent an employee from learning all of their secrets and opening a competing business across the street. What is required when creating these agreements?


Illinois, as a general rule, disfavors employers restrictions placed on former employees. This does not mean they are not allowed. A non-compete needs four things; (1) there needs to be consideration; (2) ancillary to a valid employment contract or relationship; (3) protect a legitimate business interest; (4) impose reasonable restrictions.


A non-compete clause needs consideration. Illinois courts are full of litigation over whether or not something is enough consideration in the employment context. An employer must give the employee something; this can range from continuing employment to access to confidential files and the list goes on.


The agreement must be ancillary to a valid employment contract or relationship. Illinois requires non-competes to not be the only agreement. A business cannot have people who walk in the door sign non-competes without having a association with that person.


Employers must be protecting a legitimate business interest. Generally, only the employees with enough knowledge to directly compete with the business are made to sign a non-compete. This is because your average temporary employee does not have any information that could damage their former employer. Sometimes an employer makes it standard protocol to have all employees sign a non-compete. If an employer is only doing that so employees feel as if their forced to stay a court may disallow the agreement.


A non-compete must impose reasonable restrictions. An agreement can only reasonably restrict the geographic area, temporal cope, activity restrained, effect on general public, and hardship on the employee. This all relates to the interest the employer is trying to protect. Your local mom-and-pop shop cannot prevent you from working in any job across the country for ten years.


Non-compete agreements are often a paragraph long and can sometimes cause of distress and litigation. As with most documents in the professional setting it is best to have a lawyer assist you whether you are the employee or the employer.


The choice of a lawyer is an important one and should not be based solely on advertisement. Any information provided on this website should only be utilized to inform and should not be thought of as legal advice. This website does not create an attorney-client relationship. Every claim is different and any examples, stories, or descriptions of past cases is not indicative or a guarantee of results.

© 2019 by Marshall Rinderer

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