Non-compete agreements were initially included in employment contracts with high-level executives at tech companies, but in recent years employers have increasingly been including them in their contracts with almost all their workers.
Non-compete agreements were designed to protect the company’s legitimate business interests by preventing executives with trade secrets and/or valuable relationships with customers from taking those resources to a competitor across the street. However, in an attempt to make their employment contracts air tight, some employers have gotten a little carried away and created non-compete agreements that make it unreasonably difficult for their workers to find any other form of employment at all.
Despite the increased propensity for and strictness of these agreements, many companies don’t bother to enforce them when their lower-level workers start working for a competitor in another region. But when an employer does try to enforce what might be considered an overly restrictive non-compete agreement, workers have been known to fight back, arguing that the agreement is too strict to be legally enforceable.
Different courts have provided different rulings for cases of challenged non-compete agreements, but most agree that the duration and geographic limitations of the agreement are the best indicators for determining whether a non-compete agreement can reasonably be enforced. Depending on the industry, a reasonable time limit for a non-compete agreement is generally considered to be six months to a year, while the geographic limit is more subject to the industry and job title in question.
As employers work to make their non-compete agreements increasingly restrictive, legislators have been reacting by reforming labor laws to either ban or restrict non-compete agreements. Recently, both Connecticut and Rhode Island passed restrictions on the types of non-compete agreements that can restrict physicians in those states.
Connecticut recently passed legislation that made non-compete agreements with physicians unenforceable if they lasted longer than one year and extended beyond 15 miles of the physician’s “primary site,” meaning the location where most of the physician’s revenue is generated. The new law further stated that non-compete agreements with physicians will only be recognized by Connecticut law when made with the expectation of agreement involving ownership and/or partnership or if the employer terminates the physician’s employment for cause.
Rhode Island passed a much harsher law that prohibits any non-compete agreements at all between physicians and their employers, including prohibiting any agreements that prevent physicians from marketing themselves or establishing relationships with any of their employer’s clients. The only exception provided by the new law are agreements concerned with buying and selling physician practices, so long as those non-compete agreements last for less than five years.
Massachusetts also had a recent attempt at passing new legislation to monitor non-compete agreements in that state, but those measures failed. They will probably try again, but it is encouraging for physicians to know there are states that are protecting their interests as workers. While these new state laws are no doubt a victory for employees and their advocates, we can only hope these states and others will continue to extend these same employment rights to workers in all industries.
Our Chicago employment, non-compete agreement and business dispute attorneys have defended high level executives in covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago business. You can view that article by clicking here.
Lubin Austermuehle a firm of Chicago business dispute lawyers handles litigation over non-compete clauses for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Our Chicago business lawyers with offices near Evanston, Des Plaines, Oak Brook and Chicago have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results. We have successfully represented a number of doctors in non-compete, partnership and other business disputes. We understand the complexities of physician partnership and non-compete agreements.
Lubin Austermuehle a Chicago business litigation law firm represents both plaintiffs and defendants in such cases, and can also help stop litigation before it starts by reviewing contracts to look for covenants and clauses that could create problems later. Our firm has also handled many shareholder and LLC disputes between owners of closely held corporations, and LLCs.
Based in Oakbrook Terrace and downtown Chicago, our Lake Bluff and Deerfield non-compete clause and business dispute lawyers take cases from Gurnee and Waukegan and many other cities throughout Illinois, as well as in Indiana, Wisconsin and the entire United States. To learn more or set up a free consultation, please contact one of our Chicago business dispute lawyers through the Internet or call toll-free at 630-333-0333 today.