Employees often sign non-compete agreements as a matter of course when they take a job. They then work for a period of time for the employer without concern about the non-compete agreement. At some point the employee leaves the job. Whether this is because she saw a better opportunity, was no longer happy at the job, or because the employer decided to end the employment relationship, the employee now has to contend with the non-compete agreement.
Illinois law does not look favorably on non-compete agreements because they interfere with the public policy of free commerce. As a result, non-compete agreements must be narrowly tailored to protect a specific employer interest. That means that there are at least two important questions a court will consider in determining whether the agreement is enforceable at all: 1) Is the interest identified by the employer protectable under the law; and 2) Is the non-compete agreement limited to that interest or does it “gratuitously “ interfere with the employee’s ability to work?
Unfortunately, employers often fail to achieve that balance with their non-compete agreements. Most non-compete agreements include a clause which allows courts to “re-write” or “Blue Line” the non-compete agreement in the event is overbroad to be more narrow, but still enforceable.
This creates dramatic uncertainty and there is a movement to eliminate the efficacy of limiting clauses such that a court can find the agreement enforceable or not enforceable, but not rewrite it. Thus, employers will be incentivized to have their non-compete agreements narrowly tailored to the issues that are of concern and specific to the employee at issue.
But employers often do not care whether the non-compete agreement is overbroad because they know that its mere existence and the possibility that they might file a suit to enforce it will prevent a future employer from hiring the employee. For example, a non-compete agreement that says the employee cannot work for a competitor in any role at all is almost certainly overbroad. It would effectively prohibit a computer programmer at one company from becoming a human resource manager at another simply because the second company competes in the same business. More realistically, it might prohibit a sales person from taking a position at a new company selling a product that his first company does not sell at all, again simply because the new company may sell a product that is competitive — even the employee has nothing to do with that product at the new company.
Unfortunately, because the employer can have a cause of action not only against the former employee for breach of the non-compete agreement, but also against the new company for the tort of interference with a contract (the non-compete), the new company has a significant incentive not to hire the employee, irrespective of how obviously overbroad the non-compete agreement is. As a result, the prospective employer will not hire those applicants with a non-compete. In this scenario, the non-compete is acting as a de facto restraining order. It has the same effect as if a court had enforced the non-compete — the employee cannot get the job.
If you have a non-compete agreement, there are generally two ways that your attorney can resolve the issue: 1) negotiate with the former employer to change it; and 2) have a court declare it invalid. A Chicago Employment Lawyer can help you navigate the nuances non-compete law and the understanding of what is reasonable under the law. That is critical both to filing a case and to negotiating with the former employer to identify what are the real concerns.
Where negotiation fails, the employee may have to ignore the non-compete agreement and instead focus on not affecting any of the former employer’s a protectable interests. Again, in this situation a Chicago Non-Compete attorney can assist you when deciding on your next job.
At some point, a former employer may choose to sue the former employee. More often than not, your Chicago Employment attorney can negotiate a resolution. But sometimes the former employer is simply motivated by anger and wants to use the system to make the employee’s life difficult.
If you are facing a non-compete agreement and would like legal advice, be sure to contact an employment attorney immediately.
The employment attorneys at Maduff & Maduff have been specializing in non-compete agreements, discrimination, sexual harassment, and wage and overtime theft for more than 20 years. Contact us with your employment law needs today.