Last fall the Illinois Supreme Court decided to not review an appellate court’s decision holding that (absent other conditions) two years of employment is required for a restrictive covenant to be deemed supported by adequate consideration – even where the employee signed the restrictive covenant as a condition of his employment offer and even where the employee voluntarily resigned.
Illinois used to be like Ohio and many other states in consistently holding that an offer of employment by itself is sufficient consideration for a restrictive covenant. But now Illinois has this one outlier case that will likely trip up a lot of unsuspecting and well-intentioned employers
Illinois employers hoping to enforce restrictive covenants within two years of the signing date should provide some consideration in addition to the offer of employment or continued employment in the case of current employees. Alternatively, employers could also consider offering a mandatory notice period at the end of employment during which the employee remains on the payroll (and therefore owes a fiduciary duty of loyalty of the employer when paying her) but is not expected to perform any services.
Without a doubt, this rogue decision is not welcome news to companies with employees in Illinois.
Matt Austin is a Columbus, Ohio lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. Austin Legal’s Concierge Legal Services program is relied upon by companies to remain compliant and competitive. If you have employees, you need Concierge Legal Services. You can call Matt at (614) 285-5342 or email him at Austin@LaborEmploymentOSHA.com.