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Thursday, July 16, 2015

HMB's Hal Wood Quoted in Law360 Article on Winning Seventh Circuit Appeals Case Regarding Restrictive Covenants

"7th Circ. Shoots Down Tech Staffing Co.'s Noncompete Pacts"

By Shayna Posses

Law360

July 15, 2015

A Chicago-based information technology staffing firm's noncompete agreements unreasonably forbid several employees from poaching clients and co-workers, the Seventh Circuit ruled Tuesday, holding that Illinois Supreme Court precedent supports the determination the pacts are unenforceable.

The three-judge appellate panel unanimously upheld an Illinois federal judge's decision that five former Instant Technology LLC workers who left to found Connect Search LLC didn't misuse proprietary information or interfere with customer relationships, ruling that the findings are enough evidence to render the employment agreements invalid under a 2011 decision by Illinois' top court.

Hal J. Wood of Horwood Marcus & Berk Chtd., who represents the employees, told Law360 on Wednesday that he's very pleased with the result.

"We think it's an important decision on how Illinois courts should apply the totality of circumstances standard," he said.

U.S. District Judge James Holderman ruled in favor of the ex-employees - among them Instant Technology's former vice president of sales and operations - in May 2014, finding the noncompete agreements' requirements not to solicit the company's clients and not to recruit its employees do not serve a "legitimate business interest."

The appellate panel agreed Tuesday, pointing out that clients have little allegiance to staffing agencies and that Instant Technology itself did not have a stable workforce. Large companies regularly reach out to five to 10 firms at once, the opinion says.

The case is Instant Technology LLC v. DeFazio, et al., case numbers 14-2132 and 14-2243, in the U.S. Court of Appeals for the Seventh Circuit.

Additional reporting by Lance Duroni. Editing by Richard McVay and Kelly Duncan. Copyright 2015 Portfolio Media, Inc.


 

 

 

 

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