Douglas A. Albritton wrote this post.
In a recent decision, the Illinois State Appellate Court with jurisdiction over Chicago and Cook County announced a new, two-year employment rule applicable in at-will employee restrictive covenant cases. The rule, which would apply whether (i) the employee resigned or was terminated, and/or (ii) the covenant was signed at the inception of employment or thereafter, requires two years of employment before a restrictive covenant is enforceable where the only consideration is employment or continued employment. Fifield v. Premier Dealer Servs., Inc., No. 10 CH 9204, 2013 WL 3192931 (Ill. App. Ct. June 24, 2013).
The appellate opinion does not describe any other arguments that Premier may have advanced on the consideration question (other than rejecting the argument that the one-year “for cause” term that Fifield negotiated for did not separately provide sufficient consideration), nor whether there were separate trade-secret arguments. On the question of what else can provide consideration to support an at-will employee’s restrictive covenant, at least one Illinois decision refused to consider whether access to confidential information (accepted in many states) would be sufficient. See Gallagher Basset Servs., Inc. v. Vacala, No. 2-11-1175, 2012 WL 6969297, at * 6 (Ill. App. Ct. Aug. 29, 2012) (a Second District case). This outcome is different from what may have resulted in other states.
On July 29, Premier filed a Petition for Leave to Appeal the Fifield decision to the Illinois Supreme Court. A PLA is a discretionary request for review that the Illinois Supreme Court is not obligated to grant. There is no fixed time for a decision from the court on the request.
Parties with restrictive covenant agreements in Illinois should continue to monitor this case.