Illinois Supreme Court Declines To Review Fifield, Leaving Illinois Employers With Questions About The Enforceability Of Non-Competes

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On June 24, 2013, in Fifield v Premier, the Illinois Appellate Court for the First District ruled that an offer of at-will employment is not adequate consideration to support a restrictive covenant agreement (i.e., non-solicitation and/or non-competition agreement), unless the new employee works for the employer for two years after the employee signs the restrictive covenant.  Before Fifield, it had long been an accepted practice that a job offer to an applicant or newly hired employee alone was adequate consideration to support a restrictive covenant agreement regardless of the duration of their employment.  Numerous business groups, including the Illinois Chamber of Commerce, petitioned the Illinois Supreme Court to accept the case for hearing in the hopes that it would overturn Fifield. However, the Illinois Supreme Court declined to hear the case last week.  The Appellate Court’s unprecedented ruling, combined with the Illinois Supreme Court’s decision not to review the case, presents a quagmire for Illinois employers.  It is not clear if courts outside of the First District (which includes only Cook County) will follow Fifield.  Furthermore, Fifield did not discuss whether alternative consideration, such as signing bonuses, will be adequate consideration to support a restrictive covenant signed by a new employee who does not subsequently work for the employer for two years.  Employers should evaluate their restrictive covenant agreement in light of Fifield and ensure they are taking a "belts and suspenders" approach in the face of the questions raised by the case.  Otherwise, such employers may find themselves without adequate protection if key employees who could damage their business join a competitor.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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