https://www.youtube.com/watch?v=kdfJ8QniDC4
An excellent overview of Illinois law describing various legal entities that a business can choose to use when it forms.
More and more businesses are utilizing employment agreements with new hires, and often those agreements contain arbitration dispute resolution clauses. As experienced wage and hour class action attorneys, Lubin Austermuehle is familiar with such agreements and our attorneys are always mindful of court rulings that affect this area of the law. The Northern District of Illinois, Eastern Division federal court rendered a decision affecting employment arbitration agreements recently, and we wanted to make our readers and clients aware of the court’s ruling.
Brown v. Luxottica Retail North America Inc. pits a class of salaried retail, lab, and general managers against their employer Lenscrafters. Plaintiffs argued that they were non-exempt employees, and therefore were entitled to overtime compensation. The employees filed suit alleging violations of the Fair Labor Standards Act (FLSA), Illinois Minimum Wage Law (IMWL), and Illinois Wage Payment and Collection Act (IWPCA) for unpaid overtime wages. In response, Defendant moved to compel one of the named plaintiffs to arbitrate her claims and stay the proceedings with respect to that plaintiff. Defendant so moved pursuant to a dispute resolution agreement contained within the employee handbook Plaintiff was given while still employed by Defendant. Defendant required Plaintiff to accept the terms of the handbook in order to continue her employment. The agreement contained a form to allow the employee to opt-out of the arbitration clause and instructions how to fill it out, but Plaintiff had failed to sign the form. Plaintiff objected to Defendant’s motion on the grounds that it was unconscionable and unenforceable.
In considering Plaintiff’s arguments, the Court evaluated the procedural and substantial unconscionability of the agreement. The Court found no procedural unconscionability because the arbitration language was “clearly set off” from the rest of the employee handbook and was easy to find by those who actually read the entire handbook. Next, the Northern District held that there was no substantive unconscionability due to the existence of the opt-out clause and the fact that the Plaintiff chose not to exercise her right to opt-out even though she signed a document stating she had read and accepted the terms of the handbook. Finally, the Court ruled that nothing in the FLSA precludes an agreement to arbitrate an FLSA claim, and granted Defendant’s motion to compel arbitration.
https://www.youtube.com/watch?v=HLvhcNrJ3u8
The above video provides an excellent overview of Illinois non-compete contract law.
Our Chicago non-compete agreement 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.
https://www.youtube.com/watch?v=sS9jANqRpxQ
We bring suit for odometer fraud and other car dealer scams such as selling rebuilt wrecks as certified used cars. Super Lawyers has selected our DuPage and Cook County auto-fraud and lemon law attorneys as among the top 5% in Illinois. We only collect our fee if we win or settle your case. For a free consultation call us at our toll free number 630-333-0333 or contact us on the web by clicking here.
https://www.youtube.com/watch?v=0xEM_ct6RJQ
We bring suit for odometer fraud and other car dealer scams such as selling rebuilt wrecks as certified used cars. Super Lawyers has selected our DuPage and Cook County auto-fraud and lemon law attorneys as among the top 5% in Illinois. We only collect our fee if we win or settle your case. For a free consultation call us at our toll free number 630-333-0333 or contact us on the web by clicking here.
Lubin Austermuehle is a commercial law firm based in Chicago and Oakbrook Terrace, Illinois that focuses on handling all of the legal issues confronting businesses in today’s world. We represent both plaintiffs and defendants, and we have experience representing clients in matters ranging from contract disputes to fraud. Our Chicago business law attorneys have over two and half decades of experience in business lawsuits and have won favorable verdicts in “bet the business” lawsuits. Lubin Austermuehle has Chicago business litigation attorneys who can identify and understand the legal issues in a dispute, no matter how complex they may be. We will use our resources and knowledge to formulate a plan of action that will help further your interests, resolve your problems, and get you back to growing your business. Our focus with each client is to resolve the legal issues efficiently and with minimal costs, while still providing outstanding representation. If your business is being sued or you are seeking advice to stay out of court, call our Naperville business lawyers to discuss what Lubin Austermuehle can do for you. For a consultation, call 630-333-0333 or send us an email through our website.
Lubin Austermuehle has successfully litigated many business disputes, and in our many years of experience we have found that contract claims are among the most contentious conflicts. Because so many of our clients deal with breach of contract issues, our Elmhurst business attorneys are always mindful of new court decisions issued in this area of the law. In fact, our lawyers just discovered one such case, Jumpfly Inc. v. Torling, in the US District Court for the Northern District of Illinois.
Jumpfly Inc. v. Torling pits a Plaintiff employer against two former employees who allegedly violated the non-compete agreements signed when they were hired by Plaintiff. Plaintiff contends that Defendant Torling started a competing pay-per-click internet advertising side-business while in Defendant’s employ, and upon discovering its employee’s side-business, fired him and sent a cease and desist letter demanding that he stop violating the non-compete. The parties eventually negotiated a settlement allowing Torling to continue his business, but the agreement prohibited him from soliciting any of Plaintiff’s employees. Torling allegedly solicited Defendant Burke — who was working for Plaintiff at the time under a similar non-compete agreement — and got him to quit his position with Plaintiff to work for Defendant Torling.
Plaintiff then filed suit against the two individuals and the new company (Windy City) that they worked for — alleging rescission of a settlement agreement, breach of contract, violations of the Lanham Act and Illinois Deceptive Trade Practices Act, and intentional interference with contract based upon non-compete agreements between the parties. Plaintiff’s requested the Court to enjoin Defendants’ competitive business conduct and for monetary damages. In response, Defendants filed a motion to strike Plaintiff’s request for injunctive relief and filed a motion to dismiss under 12(b)(6).
The Court granted the motion to strike as to the breach of contract claim because the two year term of the non-compete agreement had already expired and an injunction would result in an unreasonable restraint of trade. The Court also noted that Plaintiff’s seven-month delay — after discovery of the illicit conduct — in asking for an injunction also weighed in favor of Defendants. The Court denied the motion to strike as to the statutory claims, however, because injunctive relief is provided by both laws which rendered the motion premature.
Next, the Court granted Defendants’ motion to dismiss the breach of contract and intentional interference with contract claims due to pleading insufficient facts that Defendant Windy City induced either of the individual Defendants to breach their contracts with Plaintiff. In dismissing Plaintiffs conspiracy to interfere with contract, the Court applied the Intracorporate Conspiracy Doctrine and declined to agree with Plaintiff’s argument that Defendants’ conduct fell with in an exception to the rule. Finally, the Court denied the motion to dismiss the settlement agreement breach claim as the effect of Defendants’ breaches had yet to be determined.
At Lubin Austermuehle, we pride ourselves on staying abreast of changes in the law that may affect our clients, especially those rendered by the highest court in the state. The Supreme Court of Illinois released a new decision not long ago that was picked up by our Lombard business litigation attorneys, and the case is of particular interest to business owners who have personally guaranteed a business loan. In JP Morgan Chase Bank, N.A. v. Earth Foods, Inc. the Court addressed the meaning of the term surety and whether a guarantor falls within that definition under the Illinois Sureties Act.
The initial dispute in JP Morgan Chase Bank, N.A. v. Earth Foods, Inc. arose from a line of credit extended by Plaintiff JP Morgan Chase Bank to Defendant Earth Foods. The loan was personally guaranteed by the three co-owners of Earth Foods, and three years after the line of credit was first extended, Earth Foods defaulted on the loan. Plaintiff then filed a lawsuit against both the company for breach of contract and the co-owners as guarantors of the defaulted loan. The individual Defendants asserted an affirmative defense that the guaranty obligation was discharged under the Sureties Act because the Act applies to both guarantors and sureties and the law does not distinguish between the two. Plaintiffs then filed a motion for summary judgment, which was granted by the trial court. In granting the motion, the court held that the individual Defendants were guarantors and the Act only applied to sureties. Defendants appealed the trial court’s decision, and the appellate court held that the term surety encompassed both a surety and a guarantor under the Act and remanded the case. Plaintiffs petitioned the Supreme Court to review the appellate court’s reversal.
On appeal, the Supreme Court performed an extensive statutory analysis of the Illinois Sureties Act. In performing this analysis, the Court first determined that dictionaries, treatises and past court decisions recognize a clear legal distinction between guarantors and sureties. They then went on to determine the legislative intent behind the Sureties Act through a discussion of other laws related to the same subject matter. Through their discussion, the Court held that a suretyship differs from a guaranty in that a suretyship is a primary obligation to ensure the debt is paid, while a guaranty is an obligation to pay the debt if the principal does not pay. The Court went on to say that the plain language of the Act indicates that the protections of the Sureties Act are not applicable to guarantors. Despite this ruling, the Court held that summary judgment was improperly granted in JP Morgan Chase Bank’s favor and remanded the case to the trial court due to genuine issues of fact regarding whether the parties intended the individual Defendants to be guarantors or sureties for the loan in question.
JP Morgan Chase Bank, N.A. v. Earth Foods, Inc. unequivocally answered the question whether the terms surety and guarantor are interchangeable for the purposes of the Illinois Sureties Act. Despite the fact that there is a clear distinction between the two, the Supreme Court allows for the intent of the parties to rule when including either term in a loan agreement. Therefore, business owners should be careful when drafting and negotiating the terms of a guarantor or a surety and be clear which role is intended by the parties to avoid a potential lawsuit down the road.
Business litigation is necessarily an adversarial process – the stakes are high and as such the opposing parties in most lawsuits will fight over many issues during the case. One of the most contentious segments of any case is the discovery process. Because the information obtained during discovery can make or break a case, it is important to understand the law in this area. In that vein, our Berwyn business attorneys would like to share a recent Illinois Appellate Court decision that may affect many of our clients the next time they go to court.
In Mueller Industries Inc. v. Berkman, Defendant Berkman worked for Plaintiff as president of a company owned by Plaintiff pursuant to an employment contract. During his employment, Defendant formed an investment partnership and obtained a 10% ownership interest in a company that was one of Plaintiff’s primary suppliers. Defendant’s lawyer – whose firm was also counsel for Plaintiff – advised him how to structure the investment venture so as to not run afoul of his employment contract with Plaintiff. The initial employment agreement subsequently expired, and a new open-ended agreement was consummated that contained a non-compete clause and other restrictive covenants governing outside financial interests and business opportunities. Defendant then had his attorney form a new company to compete with Plaintiff, and Defendant subsequently resigned his position with Plaintiff.
Plaintiff filed suit for breach of his employment contract and breach of fiduciary duty, alleging Defendant profited personally at the expense of Mueller through his investment partnership. A discovery dispute ensued when Defendant refused to produce documents related to his investment in the supply company and his creation of the competing company. Defendant refused production based upon the 5th amendment and attorney-client privileges. Plaintiff filed a motion to compel production, which was granted by the trial court.
Defendant appealed the trial court’s grant of the motion, and reasserted that the documents were privileged. The Appellate Court reversed in part, holding that Defendant’s pre-existing relationship with his lawyer kept all communication prior to the attorney’s firm’s representation of Plaintiff privileged. However, all communications after the dual representation began were no longer so protected because Defendant no longer had any reasonable expectation of confidentiality. Finally, the Court found that Defendant had failed to demonstrate that producing the requested documents would amount to incriminating testimony, but remanded the case with orders for the lower court to perform an in camera review of the disputed documents and urged the trial court to make a detailed record of its findings.
Below is a video describing that common practice of deceiving used car buyers into purchasing a rebuilt wreck.
https://www.youtube.com/watch?v=w2ykYxvB43M
If you have already fallen victim to this scam or other used car frauds our Chicago lemon law and auto fraud lawyers may be able to assist you.
Chicago Business Litigation Lawyer Blog
