Knowledge Center

Friday, August 09, 2013

Illinois Supreme Court: Declines to Review Fifield, Leaving Intact Illinois Appellate Court Holding That Less Than Two Years of Continued Employment is Insufficient Consideration to Enforce a Restrictive Covenant

On June 24, 2013 the Illinois Appellate Court, First District held that absent other consideration, in order for a post-employment restrictive covenant to be enforceable, "there must be at least two years or more of continued employment to constitute adequate consideration in support of a restrictive covenant."  The court further held that this rule applies even if the restrictive covenant is signed at or prior to the commencement of the at-will employment, and also applies "even if the employee resigns on his own instead of being terminated."  Fifield v. Premier Dealer Services, Inc., 2013 Il App (1st) 120327' 2013 Ill. App. LEXIS 424 (June 24, 2013).  See the Client Alert dated August 9, 2013. 

After the Fifield opinion circulated, numerous business organizations, including the Illinois Chamber of Commerce, petitioned the Illinois Supreme Court to review and overturn the First District ruling. However, the Illinois Supreme Court declined to hear the case on September 25, 2013.

As a result, many restrictive covenants in Illinois are at-risk for non-enforcement.  We recommend that Illinois employers review their restrictive covenants to ensure that their business interests are protected. 

To discuss specific questions or recommendations, please contact Hal Wood at (312) 606-3219, Shelley Koren at (312) 606-3244 or any of the attorneys in the Business and Finance or Litigation Groups at Horwood Marcus & Berk Chartered.

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