Illinois Employers Face Decision as Appellate Court Limits Offer of At-Will Employment as Consideration for Competition Restrictions

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The First District of the Illinois Appellate Court (which covers Cook County) recently ruled that at-will employment is inadequate consideration for a new hire’s agreement to post-termination competition restrictions, unless the employment lasts two years. The ruling extends prior decisions that imposed the same two-year requirement when an existing employee signs post-termination competition restrictions. The restrictions are unenforceable if employment ends before two years, regardless of whether the employee quits or is fired with or without cause.

The new decision, Fifield v. Premier Dealer Svcs, Inc., upends a long-standing assumption that hiring an employee on a terminable at-will basis is adequate consideration for post-termination restrictions signed at the time of hiring. The decision is still subject to reconsideration by the First District or appeal to the Illinois Supreme Court, but does not appear to conflict with any prior court decisions.

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