Non-compete agreement brief
Discussion
An Illinois court probably won’t enforce the non-compete agreement in Mr. Gold’s restrictive covenant but it will most likely sever the non-compete and enforce the non-solicitation agreement.
A court will enforce a restrictive covenant if it is: (1) ancillary to a valid employment relationship; (2) supported by adequate consideration, and (3) reasonable. Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d 393, 396 (Ill. 2011).
I. Ancillary to a Valid Contract
A court will most likely find that the restrictive covenant was ancillary to a valid employment relationship. See Lawrence & Allen, Inc. v. Cambridge Hum. Res. Group, Inc., 685 N.E.2d 434, 440 (Ill. App. 2 Dist. 1997).
Mr. Robert Gold was an employee of Chicago Bioscience Inc. and the restrictive covenant is a part of and therefore ancillary to his employment contract.
II. Adequate Consideration
A court will most likely find that the restrictive covenant was supported by adequate consideration.
When at will employment is the only consideration offered in support of a restrictive covenant, Illinois courts have regularly held that there must be at least a substantial time of two years of continued employment after the restrictive covenant is signed in order to constitute adequate consideration. Fifield v. Premier Dealer Serv., Inc., 2013 IL App (1st) 120327, ¶ 19 (holding that three months of continued employment did not constitute adequate consideration in support of a restrictive covenant). This rule applies regardless of whether the employee signed the agreement prior to commencing new employment or after already being employed and whether employee resigns or is terminated. Id. at ¶ 18-19.
However, when additional benefits are conferred in support of a restrictive covenant, they will most likely be considered when measuring adequacy of consideration. Id. at ¶ 16 (stating in dicta that the benefits conferred might have constituted adequate consideration but for lack of evidence).
An Illinois court probably won’t enforce the non-compete agreement in Mr. Gold’s restrictive covenant but it will most likely sever the non-compete and enforce the non-solicitation agreement.
A court will enforce a restrictive covenant if it is: (1) ancillary to a valid employment relationship; (2) supported by adequate consideration, and (3) reasonable. Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d 393, 396 (Ill. 2011).
I. Ancillary to a Valid Contract
A court will most likely find that the restrictive covenant was ancillary to a valid employment relationship. See Lawrence & Allen, Inc. v. Cambridge Hum. Res. Group, Inc., 685 N.E.2d 434, 440 (Ill. App. 2 Dist. 1997).
Mr. Robert Gold was an employee of Chicago Bioscience Inc. and the restrictive covenant is a part of and therefore ancillary to his employment contract.
II. Adequate Consideration
A court will most likely find that the restrictive covenant was supported by adequate consideration.
When at will employment is the only consideration offered in support of a restrictive covenant, Illinois courts have regularly held that there must be at least a substantial time of two years of continued employment after the restrictive covenant is signed in order to constitute adequate consideration. Fifield v. Premier Dealer Serv., Inc., 2013 IL App (1st) 120327, ¶ 19 (holding that three months of continued employment did not constitute adequate consideration in support of a restrictive covenant). This rule applies regardless of whether the employee signed the agreement prior to commencing new employment or after already being employed and whether employee resigns or is terminated. Id. at ¶ 18-19.
However, when additional benefits are conferred in support of a restrictive covenant, they will most likely be considered when measuring adequacy of consideration. Id. at ¶ 16 (stating in dicta that the benefits conferred might have constituted adequate consideration but for lack of evidence).