Many employment agreements contain non-competition, non-solicitation, and confidentiality provisions. These provisions are commonly called restrictive covenants or post-employment restrictions since they act as a restraint on trade or one’s ability to work.
These provisions seeks to limit the employee’s ability to compete, directly or indirectly, with the employer or to prohibit the employee from joining a competitor of the employer during employment or for a set period of time following employment.
These provisions prohibit the employee from taking or actively recruiting other employees or clients of the employer during employment or for a set period of time after employment.
These agreements limit an employee’s ability to disclose or discuss confidential or proprietary information that the employee may have learned during his or her employment, such as trade secrets or particular customer information. These provisions typically prohibit the disclosure of such information both during employment and after the employment relationship ends.
Since post-employment restrictions limit competition and an employee’s ability to use his or her skills in the market, courts in Illinois and elsewhere look at these provisions with some skepticism. In fact, many courts have determined that the provisions are contrary to public policy and therefore void unless they are reasonable in their scope, properly drafted, and proven to be necessary.
In evaluating the reasonableness of a restrictive covenant, courts look to such factors as the reasonableness of the time and territory restrictions on the employee as well as whether the restriction is drafted to protect the employer’s legitimate business interests. Restrictive covenants that are overbroad in scope and which exist solely for the purpose of limiting competition for the benefit of the employer are therefore likely to be deemed unenforceable.
If your current employment agreement contains post-employment restrictions or you have been asked to sign a new employment agreement which includes restrictive covenants, contact the Nolan Law Office immediately to learn more about your rights and the enforceability of the restrictive covenants in Illinois.