Non-Compete Agreements (a/k/a Covenants Not to Compete)
Generally speaking, non-compete agreements prohibit employees from competing with their employer, both during their employment and for a period after their employment. Competing includes working for a direct competitor or starting a company that competes with the employer for the same customers. Similar agreements, collectively known as restrictive covenants, likewise seek to limit an employee’s ability to compete with the employer by prohibiting solicitation of the employer’s customers or using certain information obtained from the employer. The enforceability of these restrictive covenants varies greatly from jurisdiction to jurisdiction and require the involvement of an experienced attorney at all stages from drafting to enforcement.Enforceability of Non-Compete Agreements
The enforceability of a covenant not to compete is determined in large part by three specific features of the covenant:
- Specificity: A non-compete agreement must be specific about the activities it prohibits. Additionally, the covenant must clearly articulate what activities are considered competing and those activities must be substantially similar or related to the work the employee performed for the employer.
- Duration: The prohibition may only be for a reasonably limited duration.
- Geographic scope: The covenant must articulate the geographic area where the employee is prohibited from competing. Additionally, the geographic area in the covenant must be reasonable (i.e. the minimum geographic area necessary to protect the employer) which is based in large part on the employer’s size and type of business.
An employer who believes that a current or former employee has breached a non-compete agreement or is going to do so soon must act quickly. Sometimes monetary damages, which take time to receive and are only available to compensate for harm already inflicted, are insufficient to remedy breaches of restrictive covenants. In these instances, employers must act fast to prevent great and irreparable harm to their interests. To prevent this irreparable harm, we act swiftly to take emergency measures such as temporary restraining orders or preliminary injunctions. These measures take place at the outset of litigation and protect an employer’s interests by preventing the employee from competing or otherwise continuing to breach the restrictive covenant during the pendency of the litigation.Litigation of Non-Compete Agreement Disputes
On the opposite side of the coin, a former employee who believes an employer is wrongfully trying to enforce a restrictive covenant may take the initiative and seek a court order, known as a declaratory judgment, holding that a non-compete agreement does not prohibit a new job or other action. Before the court enters this type of order, the employer is given an opportunity to present a defense to the former employee’s claims.
At DiTommaso, our business litigation attorneys represent employers and employees throughout Chicago and the surrounding counties in disputes involving non-compete agreements and other restrictive covenants. We can help you no matter what stage of a dispute you are in. From advising clients on the enforceability of covenants, to emergency litigation, to trial, we engage in the process with deftness and skill that come only from years of experience. Contact us today online or locally at 630-333-0000 to schedule a consultation with our team at one of our offices in Chicago or Oakbrook Terrace, Illinois.