Articles Posted in Non-Compete Agreement / Covenant Not to Compete

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It has become increasingly common over the past few years for employers to include non-compete agreements in their employment contracts. In most cases, they are required to have geographic and time limits, meaning they can only be enforced in a certain geographical area for a certain period of time (usually six months to a year after termination of employment).

The restrictions on non-compete agreements vary from state to state, with a few states, such as California, refusing to recognize any non-compete agreements, even those signed in states that do recognize such contracts.

In one recent case against a realtor in Connecticut, Century 21 Access America successfully sued a former employee and obtained an injunction against her. Under Connecticut state law, non-compete agreements are recognized and enforceable.

Vassilia Mazzotta’s employment agreement with Century 21 stated that she would not work for a competitor or solicit clients within 15 miles of Century 21’s offices for a period of two years after termination of her employment with Century 21.

Shortly after resigning from her position as a real estate broker with Century 21, Mazzotta went to work for a competing real estate company and continued to provide services and solicit clients within 15 miles of Century 21’s offices. Continue reading ›

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When non-compete agreements first started to be used, they needed to establish a geographic perimeter in order to be enforceable. Non-compete agreements were intended to prevent workers from going to work for the competitor across the street and taking clients, vendors, and/or proprietary secrets with them. In order to stay fair to workers while still protecting the employer, most non-compete agreements were restricted to a certain geographical range – for example, the employee could not go to work for a competitor less than 20 miles away from the employer.

Over the past few years, employers have started expanding the geographical limits in their non-compete agreements until they didn’t bother putting them in at all – in a few cases, they actually specified that the non-compete agreement was effective worldwide.

With the dawn of the Digital Age, businesses started expanding their reach across the globe, making it increasingly difficult to specify a geographical area in which they conduct business. For this reason, some U.S. courts have ruled that it’s OK for companies to leave out the geographical restrictions on a non-compete agreement, but the Nevada Supreme Court recently stated otherwise. Continue reading ›

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download-300x150download-1-300x150Super Lawyers named Chicago and Oak Brook non-compete agreement attorney Peter Lubin a Super Lawyer in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Patrick Austermuehle of the Firm was named a Rising Star again and has a great deal of experience as a Chicago restrictive covenant and non-compete agreement Attorney.  Peter Lubin and Patrick Austermuehle have achieved this honor for many years which is only given to 5% of Illinois’ attorneys each year.  You can review their record of accomplishment here. You can look at reviews by the clients here.

Lubin Austermuehle’s Oak Brook and Chicago employment and non-compete agreement trial lawyers have over thirty years experience in litigating employment, restrictive covenant and non-compete agreement lawsuits.  Our Chicago non-compete agreement and trade secret theft attorneys prosecute and defend many types of employment practice and emergency business lawsuits involving injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud.



Lubin Austermuehle’s Wheaton and Waukegan non-compete agreement lawyers have more than two and half decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action, and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Schaumburg and Orland Park, we serve clients throughout Illinois and the Midwest.

Continue reading ›

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Non-compete agreements were originally intended to prevent high-level executives from taking trade secrets and client relationships to a competitor, but companies have recently been expanding their use of non-compete agreements to almost all their employment contracts, even with workers earning minimum wage. It has become a way to lock low-wage employees into their current jobs because the terms of their non-compete contract often make it impossible for them to find work in a related field.

At the same time, while non-compete agreements might not do much harm to employees at the executive level because they have more bargaining power, workers at the lower levels often have little-to-no bargaining power and are often unaware of their options when it comes to their employment contracts. Whether that means negotiating the terms of their contract, or recognizing when the contract is invalid, low-wage workers tend to have fewer options than those higher up the ladder.

While there is no federal law putting limitations on when companies can use non-compete agreements, there are a variety of state laws that either ban or limit non-compete agreements within the state. California is famous for their total ban on non-compete agreements, while other states, like Washington, have recently added limitations to when companies can use non-compete clauses and what terms can be included in those contracts. Continue reading ›

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Recently, a unanimous U.S. Third Circuit appellate court upheld payroll company Automatic Data Processing’s (“ADP”) non-compete agreements but remanded the case to the district court for tailoring. The federal appeals court reversed a decision by the district court which had found the covenants not to compete to be unenforceable. In reversing the lower court, the Third Circuit found that the non-compete agreements were necessary to protect ADP’s client relationships and goodwill, interests that New Jersey courts, “consistently recognize as legitimate.”

According to the Third Circuit’s opinion, ADP requires certain high-performing employees to sign non-compete agreements and similar pledges in order to qualify for stock option awards. These restrictive covenants prohibit employees who received stock options from working for a competitor for one year and from soliciting ADP’s current or prospective clients for two years after leaving ADP. Two former ADP employees challenged ADP’s practice, alleging that the restrictive covenants were more onerous than they needed to be. The Third Circuit found that the solution in such circumstances is to amend, or “blue pencil” the non-compete agreements, not find them entirely unenforceable. Continue reading ›

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download-300x150download-1-300x150Super Lawyers named Chicago and Oak Brook shareholder oppression attorney Peter Lubin a Super Lawyer in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Patrick Austermuehle of the Firm was named a Rising Star again and has a great deal of experience as a Chicago Defamation Libel and Slander Lawyer.  Peter Lubin and Patrick Austermuehle have achieved this honor for many years which is only given to 5% of Illinois’ attorneys each year.

Lubin Austermuehle’s Oak Brook and Chicago business dispute lawyers have over thirty years experience in litigating defamation, breach of fiduciary duty and shareholder oppression lawsuits.  Our Chicago non-compete agreement and trade secret theft lawyers prosecute and defend many types of unfair business practices and emergency business lawsuits involving injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud.



Lubin Austermuehle’s Wheaton, Schaumburg, and Evanston business litigation attorneys have more than two and half decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action, and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Naperville and Aurora, we serve clients throughout Illinois and the Midwest.

Continue reading ›

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Have you ever been so excited to receive a job offer that you signed the employment contract without doing much more than skimming it (if that)? It’s a common story, and there’s a reason the employment contract tends to be the last step in the process – sometimes even coming after the employee has already started working their new job.

If you’ve ever found yourself in the situation described above and you weren’t working in a state like California (which bans non-compete agreements), then the employment contract you signed probably included a clause forbidding you from going to work for a competitor. How much your contract prohibited any chances of employment you had in the future would have depended on the company, but many employers (especially large corporations) have been getting increasingly aggressive with their non-compete agreements in recent years and legislators all over the country have been retaliating. Continue reading ›

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The Illinois Appellate recently affirmed a two-year bright-line continued employment rule for adequate consideration in non-compete cases if the only consideration is continued employment. Many, but not all, of the federal district courts in Illinois, do not follow this bright-line rule predicting that the Illinois Supreme Court will not follow it.  The Illinois Supreme Court has not yet addressed the issue. You can read the most recent Illinois Appellate decision here.  You can also listen below to the oral argument held in the Appellate Court before it reached this decision:

. Continue reading ›

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New Washington Law Makes Sweeping Changes to Non-Compete Agreement Law 

Non-compete law in the state of Washington underwent sweeping changes last week with the signing into law of HB1450 (“Washington Non-Compete Act”) which targets the use of restrictive covenants within the state. The new law regulates the use and scope of non-competition agreements with both employees and independent contractors and restricts the use of non-poaching agreements in franchise agreements as well as policies against moonlighting. The new law takes effect on January 1, 2020.

Under the new law, a non-competition covenant will be void and unenforceable unless the following criteria are met:

  1. If the covenant is entered into at the commencement of employment, it must be disclosed in writing to the employee by no later than the date of the employee’s acceptance of the offer of employment;
  1. If the covenant is entered into at the outset of employment but will not take effect until a later date due to a foreseeable change in the employee’s compensation, the agreement must specifically disclose that it may be enforceable at a future time;
  1. If the covenant is entered into after the commencement of employment, it must be supported by additional consideration;
  1. The worker’s annual earnings must exceed $100,000 (in the case of an employee) or $250,000 (in the case of an independent contractor)based upon the income reflected in Box 1 of an employee’s IRS Form W-2 or an independent contractor’s IRS Form 1099; and
  1. The post-separation duration of the non-compete must last no longer than 18 months unless the employer can show by clear and convincing evidence that a longer duration is necessary to protect its business or goodwill.

The new law defines the term “non-competition covenant” to expressly carve out certain types of restrictive covenants such as employee and customer non-solicitation covenants, confidentiality/non-disclosure covenants, and covenants relating to the purchase or sale of a business or franchise. Continue reading ›

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