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Non-compete agreements, often called restrictive covenants, are common legal tools used by employers to protect their business interests. In the state of Illinois, these agreements are subject to specific rules and regulations that both employers and employees should understand. This blog post will provide an overview of non-compete agreements in Illinois, including their purpose, enforceability, and key considerations.

Purpose of Non-Compete Agreements

Non-compete agreements serve as legal contracts between employers and employees. The primary purpose of these agreements is to protect the employer’s legitimate business interests. These interests may include safeguarding trade secrets, customer relationships, and preventing unfair competition. Non-competes are typically used in industries where employees have access to sensitive information and trade secrets, such as technology, healthcare, and finance.

Enforceability in Illinois

Illinois, like many states, has specific laws and regulations regarding non-compete agreements to balance the interests of both employers and employees. In general, for a non-compete agreement to be enforceable in Illinois, it must meet the following criteria:

  1. Legitimate Business Interest: The non-compete must protect a legitimate business interest, such as confidential information, trade secrets, customer relationships, or specialized training.
  2. Reasonable Scope: The agreement’s restrictions must be reasonable in terms of geographic scope, duration, and the nature of the activities restricted. Overly broad restrictions may be deemed unenforceable.
  3. Adequate Consideration: The employee must receive adequate consideration in exchange for signing the agreement. This can include a job offer, a raise, or other benefits.
  4. Public Policy: The agreement must not violate public policy or statutory law. For example, non-competes cannot prevent employees from pursuing their livelihood or career.
  5. Special Provisions for Low-Wage Employees: Illinois law contains special provisions that limit the use of non-compete agreements for low-wage employees, making it more difficult for employers to enforce them in these cases.

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In Illinois, as in many other jurisdictions in the United States, co30-333rporate or LLC oppression lawsuits typically involve allegations of minority shareholders or members being treated unfairly or in bad faith by the majority shareholders or members. These lawsuits are often brought under various legal theories, such as breach of fiduciary duty or breach of the implied covenant of good faith and fair dealing. Below are some key points related to fairness and good faith in Illinois corporate or LLC oppression lawsuits:

  1. Fiduciary Duties: Shareholders in corporations and members in LLCs owe certain fiduciary duties to the company and to each other. These duties include the duty of loyalty and the duty of care. Majority shareholders or members have a duty to act in good faith and fairness when dealing with the company and minority shareholders or members.
  2. Business Judgment Rule: Illinois, like most states, applies the business judgment rule, which generally provides protection to corporate or LLC directors and officers for their decisions as long as they are made in good faith, with due care, and in the best interests of the company. However, the rule does not shield them from liability for self-dealing or actions taken in bad faith.
  3. Oppression Claims: Minority shareholders or members may bring oppression claims if they believe that the majority has engaged in oppressive, fraudulent, or unfairly prejudicial conduct that harms their rights and interests. Courts will examine whether the conduct was done in bad faith and whether it resulted in oppression or unfair treatment.
  4. Judicial Remedies: If a court finds that oppression or unfair treatment has occurred, it may order a variety of remedies, such as a buyout of the minority’s interest, a dissolution of the company, or other equitable relief designed to rectify the harm and protect the minority’s rights.
  5. Operating Agreements and Shareholder Agreements: The terms of the operating agreement (for LLCs) or the shareholder agreement (for corporations) often play a significant role in determining the rights and obligations of the parties involved. These agreements may contain provisions related to governance, dispute resolution, and protections against oppression.
  6. Good Faith and Fair Dealing: In addition to specific statutory and fiduciary duties, Illinois law recognizes the implied covenant of good faith and fair dealing in contracts, including operating agreements and shareholder agreements. This implies that parties must act honestly and fairly in their dealings with each other, and they should not act to undermine the other party’s reasonable expectations.

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Document requests are a critical component of the discovery process in legal proceedings, enabling parties to obtain essential evidence and information to support their cases. The case of Elleby v. Forest Alarm Service, Inc., 2020 IL App (1st) 191597, offers valuable insights into the requirements and intricacies of document requests in Illinois. In this blog post, we will delve into the Elleby case and explore the key elements and considerations involved in making effective document requests. Continue reading ›

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The First Amendment right to freedom of the press is fundamental to a democratic society, but it’s not absolute. Journalists and media organizations must strike a balance between reporting the news accurately and protecting individuals’ reputations. In Illinois, the fair reporting privilege defense serves as a crucial legal safeguard against libel claims when reporting on matters of public interest. In this blog post, we’ll explore the fair reporting privilege in Illinois, its significance, and how it applies to libel cases.

Understanding the Fair Reporting Privilege

The fair reporting privilege is a legal doctrine that protects journalists and media outlets from defamation claims when reporting on matters of public interest. It recognizes the importance of a free press in informing the public and encourages open and honest reporting. The privilege allows reporters to cover governmental proceedings, official statements, and public documents without fear of defamation liability, even if the information later proves to be incorrect.

Key Elements of the Fair Reporting Privilege in Illinois

To successfully assert the fair reporting privilege defense in Illinois, several key elements must be met:

  1. Public Interest: The report must involve a matter of public interest. This typically includes governmental actions, public meetings, official statements, and other topics that are of concern to the public.
  2. Accuracy: While the privilege protects reports that are substantially accurate, it does not cover intentionally false statements or reckless reporting. Journalists must still exercise reasonable care in verifying the information they report.
  3. Fair and Neutral Reporting: The report should be fair and neutral, presenting the facts without undue bias or distortion. Deliberate attempts to harm someone’s reputation with willful false statements will not be protected.

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Non-compete agreements are a common tool used by employers to protect their business interests. However, these agreements must strike a balance between safeguarding legitimate business concerns and respecting an employee’s right to pursue their career. Over the years, Illinois courts have issued several crucial decisions that provide guidance on the enforceability of non-compete agreements. In this blog post, we’ll explore some of these key Illinois court decisions and their implications for both employers and employees.

Recent Illinois decisions on non-compete agreements have clarified several important points:

1) Non-compete agreements under Illinois law are only enforceable if they protect a party’s legitimate business interests, as determined from the totality of the circumstances. This includes the near-permanence of customer relationships, the employee’s acquisition of confidential information through their employment, and time and place restrictions. Illinois law requires that in order be enforceable, a covenant not to compete must secure a “protectable interest” of the employer. Illinois courts recognize at least two such protectable interests: (1) where the customer relationships are near-permanent and but for the employee’s association with the employer the employee would not have had contact with the customers; and (2) where the former employee acquired trade secrets or other confidential information through his employment and subsequently tried to use it for his own benefit.

2) Non-compete provisions in employment agreements, which restricted distributor’s employees from engaging in post-employment activities of soliciting or inducing other employees to leave distributor’s employment, were found invalid restraints on trade, in that, provisions did not serve to protect any legitimate business interest recognized under Illinois law.

3) Non-compete clauses in employment agreements are unenforceable when they (1) impose restrictions greater than those necessary to protect legitimate interests of the protected party, (2) are oppressive to the restricted party, or (3) are harmful to the general public. Such was the case in Mickey’s Linen v. Fischer where Illinois decisions supported modifying a non-solicitation provision to cover only those customers for which the former employee had responsibility, and that the severability provision in Fischer’s Employment Agreement makes that result particularly appropriate.

4) In Unisource Worldwide, Inc. v. Carrara, the court ruled that where an employment contract is ambiguous and unintelligible, the non-compete clause in the agreement is unenforceable because there is no definite agreement on the essential terms of the restrictive covenant.

5) Lastly, in Vencor, Inc. v. Webb, the court found that a non-competition agreement is not contrary to the fundamental public policy of the state of Illinois, and thus Illinois law must govern this dispute. Here, both parties elected to have the agreement governed by Kentucky law, and the court discerned no reason why an Illinois court would find the agreement to be contrary to Illinois public policy.

Conclusion

Illinois court decisions on non-compete agreements have evolved to strike a balance between safeguarding legitimate business interests and protecting the rights of employees. Employers must carefully craft non-compete agreements that are reasonable in terms of duration, geographic scope, and the scope of activities restricted. Adequate consideration is a crucial factor, especially when entering into non-compete agreements with at-will employees.

For employees, understanding the enforceability of non-compete agreements and their rights is essential. Consulting with legal counsel is advisable when faced with the prospect of signing a non-compete agreement or when challenging the enforceability of an existing agreement.

These court decisions have helped shape the landscape of non-compete agreements in Illinois, emphasizing the importance of fairness and reasonableness in these contractual arrangements. It’s crucial for both employers and employees to stay informed about these legal developments to ensure that their rights and interests are protected. Continue reading ›

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Consumer protection is a cornerstone of the legal system, and the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) plays a pivotal role in safeguarding consumers from deceptive practices. Recent opinions from the Illinois Supreme Court and various state and federal courts in Illinois have provided crucial guidance on the interpretation and application of the ICFA. In this blog post, we will explore some of these significant opinions and their implications for consumers and businesses.

“Here are some recent Illinois consumer fraud decisions and their key holdings:

1. “Cellular Dynamics, Inc. v. MCI Telecommunications Corp.” (Decided on April 12, 1995). The court held that under the Illinois Consumer Fraud Act, a single deceptive act is sufficient to support recovery and the plaintiff’s failure to allege a public wrong is not fatal to its claim [2].

2. “Barbara’s Sales, Inc. v. Intel Corp.” (Decided on November 29, 2007). The court determined that the Illinois Consumer Fraud and Deceptive Business Practices Act applies only to fraudulent transactions which take place primarily and substantially in Illinois [3, 4].

3. “Costa v. Mauro Chevrolet, Inc.” (Decided on July 18, 2005). The court ruled that assignee of retail installment contract for car sale had no derivative liability under the Illinois Consumer Fraud Act . The court also noted that the FTC Holder Notice has been largely superseded by subsequent federal legislation, namely, section 1641(a) of TILA.

4. “Camasta v. Jos. A. Bank Clothiers, Inc.” (Decided on August 1, 2014). The court found that to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act, a plaintiff must show: a deceptive or unfair act or promise by the defendant; the defendant’s intent that the plaintiff rely on the deceptive or unfair practice; and that the unfair or deceptive practice occurred during a course of conduct involving trade or commerce. In a private action under this act, the element of actual damages requires that the plaintiff suffer actual pecuniary loss.

5. “Rudy v. Family Dollar Stores, Inc.” (Decided on February 4, 2022. The court emphasized that the Illinois Consumer Fraud and Deceptive Business Practices Act is designed to protect consumers, borrowers, and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices.

6. “Landau v. CNA Financial Corp.” (Decided on March 26, 2008). This case reiterated that the Illinois Consumer Fraud and Deceptive Business Practices Act does not have extraterritorial effect and does not apply to fraudulent transactions that take place outside Illinois.

7. “Avery v. State Farm Mut. Auto. Ins. Co.” (Decided on August 18, 2005). The court held that the Illinois Consumer Fraud Act could be applied to consumers residing out-of-state if the deceptive acts and practices were perpetrated in Illinois.

8. “Freeman v. MAM USA Corporation” (Decided on March 23, 2021). The court provided a refined explanation of what a plaintiff must allege in order to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act.

9. “Dwyer v. American Exp. Co.” (Decided on June 30, 1995). This case added that in order to successfully claim under the Illinois Consumer Fraud Act, plaintiffs must also show how they were damaged.

10. “Troutt v. Mondelēz Global LLC” (Decided on October 31, 2022). This case reiterated the broad prohibitions of the Illinois Consumer Fraud Act against unfair or deceptive acts or practices in the conduct of trade or commerce.

11. “Sneed v. Ferrero U.S.A., Inc.” (Decided on February 15, 2023). The court stated that an accurate ingredient list does not immunize a defendant from a deceptive front label under the Illinois Consumer Fraud Act, but it is relevant to determining whether reasonable consumers would be misled

Implications for Consumers and Businesses

These opinions from Illinois courts highlight the continued significance of the ICFA in protecting consumers from deceptive and fraudulent business practices. For consumers, these opinions underscore their rights to pursue legal action when they believe they have been victims of consumer fraud.

For businesses, these opinions serve as a reminder of the importance of conducting business practices in a transparent and ethical manner. Adhering to the ICFA and avoiding deceptive practices is not only legally required but also crucial for maintaining a positive reputation and avoiding costly legal battles.

In conclusion, the Illinois Consumer Fraud and Deceptive Business Practices Act remains a critical tool for consumer protection in Illinois. Recent opinions from both state and federal courts in Illinois reinforce the Act’s role in safeguarding consumers and promoting fair and honest business practices. It is essential for both consumers and businesses to stay informed about these developments and seek legal guidance when necessary to ensure compliance with the ICFA.

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The Illinois Supreme Court plays a crucial role in shaping the legal landscape of the state. June 2021 saw the release of several significant decisions that have far-reaching implications for Illinois residents, businesses, and the legal community. In this blog post, we will explore some of the notable recent Illinois Supreme Court decisions.

1. People v. Aguilar, 2013 IL 112116: The court addressed the Second Amendment to the United States Constitution and found a statute, which prohibits the possession and use of an operable firearm for self-defense outside the home, unconstitutional, thus reversing the defendant’s aggravated unlawful use of weapons conviction.

2. People v. Burns, 2015 IL 117387: This case also addressed a similar Second Amendment issue.

3. People v. Chairez, 2018 IL 121417: This decision pertained to a different statute, but the specific ruling is not mentioned.

4. Yakich v. Aulds, 2019 IL 123667: The court clarified that the circuit and appellate courts of the State of Illinois must apply binding precedent from the Illinois Supreme Court.

5. People ex rel. Daley v. Datacom Sys. Corp., 585 N.E.2d 51 (Ill. 1991): The court agreed that “only the Department (of Financial and Professional Regulation) had standing to pursue civil violations of the Collection Agency Act”.

6. Maksimovic v. Tsogalis, 177 Ill.2d 511: The court clarified that preemption by the Illinois Human Rights Act (“IHRA”) is limited to situations where the claim made is dependent on a legal duty imposed by the IHRA. If the claim exists independent of any legal duty of the IHRA, the claim is not preempted.

7. Hale v. Committee on Character and Fitness for State of Illinois: The court allowed to stand a decision by the state bar character and fitness committee’s rejection of a bar applicant’s application. The court affirmed that the proceedings were “judicial proceedings,” and that the decision was an “adjudication” in which the applicant was able to litigate his constitutional challenges.

8. Blumenthal v. Brewer, 2016: In this case, the court affirmed that the appellate court does not have the authority to overrule a decision by the Illinois Supreme Court and discussed the implications of such an attempt

Conclusion

The Illinois Supreme Court decisions issued in June 2021 reflect the court’s commitment to upholding constitutional rights, clarifying legal principles, and ensuring fairness in various areas of law, from criminal procedures to civil litigation and attorney discipline. These rulings have a lasting impact on the legal landscape in Illinois and serve as important precedents for future cases. It is essential for legal professionals, scholars, and anyone with an interest in the law to stay informed about these decisions and their implications.

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You’ve probably already heard of Alex Jones, but if you haven’t, or you need a refresher, he’s the right-wing conspiracy theorist who has used his media company, InfoWars, to promote the idea that the Sandy Hook Elementary School shooting was a giant hoax created and promoted by anti-gun activists. Among other things, Jones claimed the grieving families and survivors of the massacre were “crisis actors” who were paid to lie about the mass shooting.

Jones has built a huge following, and many of them believe his lies. Many of his listeners even reached the point of actively seeking out Sandy Hook survivors and the families of those slaughtered, threatening and harassing them for their alleged lies.

The families sued Alex Jones for defamation and were collectively awarded $1.1 billion in damages.

Soon after that ruling, Jones filed for Chapter 11 bankruptcy, which would have allowed him to restructure his business and potentially avoid paying the money he owes those families.

A judge recently ruled that Jones could not use bankruptcy as a means to avoid paying the $1.1 billion payments. The families took this as a victory, but Jones says he isn’t done fighting.

Jones’s net worth was valued at $14 million, yet he claims he has no money. He says he is $1 million in debt, and that the millions of dollars generated by his media company go to pay the bills, making the $1.1 billion ruling hypothetical. He also says he will continue to appeal the decision.

Meanwhile, he is asking his listeners to make donations to help him pay his legal bills. But those bills and the huge ruling against him have not stopped him from spending close to six figures in one month, much of it on lavish meals and entertainment. Continue reading ›

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Efforts by an alleged perpetrator and his legal team to unmask a Jane Doe plaintiff (by revealing her name) were held dead on arrival by the Illinois Appellate Court today. Our firm assisted lead counsel Tamara Holder with the appellate briefs. In these types of matters, our firm concentrates on defending alleged sexual assault victims who are allegedly revictimized by being subject to what we advocate, on our client’s behalf, in court papers, are strike suits for defamation or libel. This practice of suing the alleged victim for libel or defamation is, unfortunately, becoming an all too common tactic to, we contend, try to bully them into silence or to retract their claims.

The forceful and well-reasoned concurring opinion by Justice Hyman explains why efforts to expose the names of alleged victims of sexual misconduct or assault is a pernicious practice. The opinion provides guide posts for courts in Illinois and across the country to encourage alleged sexual misconduct or assault victims to seek justice, without having to suffer more trauma due to their names being spread all over the internet. It also notes that the alleged perpetrator should have similar privacy rights prior to a judgment on guilt or innocence.

The concurring opinion states:

In a world where the Internet already has created privacy, confidentiality, and security issues, we now enter the age of artificial intelligence, exacerbating these issues and making secrecy vital. No longer, in famous observation of Justice Brandeis almost 100 years ago, is “right to be let alone” enough. Olmstead v. United States, 277 U.S. 438, 478 (1928) (Brandeis, J., dissenting). In the 21st century, the right to be left unknown will join the right to be let alone as a vexing subject of intense legal debate. Indeed, the question of anonymity has taken on increased significance as court records have become readily available to the general public through even casual Internet searches. As the appellant notes in his brief, a Google search of a litigant’s name can produce an untold number of articles describing the lawsuit. Those articles may be available online for a lifetime, unless kept confidential. Although Illinois case law offers slight guidance on petitions to proceed anonymously, an alleged victim deserves anonymity whether or not their identity has been divulged elsewhere, including in a case not brought by them. …

Although no reported Illinois cases address whether a claim of sexual violence constitutes an “exceptional” situation warranting the use of a pseudonym, federal courts in Illinois have recognized that allegations of sexual assault are “highly sensitive, personal matters that involve the disclosure of information of the utmost intimacy.” Doe v. Cook County, Illinois, 542 F. Supp. 3d 779, 786 (N.D. Ill. 2021); accord Doe No. 2 v. Kolko, 242 F.R.D. 193, 195 (E.D.N.Y. 2006) (while the Seventh Circuit disfavors fictitious names, it has “recognized that sexual assault victims are a paradigmatic example of those entitled to a grant of anonymity” (citing Doe, 112 F.3d at 872)). Even so, a sexual violence allegation alone has been considered not dispositive. See Cook County, Illinois, 542 F. Supp. 3d at 786 (“allegation of sexual assault alone does not end the inquiry”); Doe v. Skyline Automobiles, Inc., 375 F. Supp. 3d 401, 405-06 (S.D.N.Y. 2019) (“other factors must be taken into consideration and analyzed in comparison to the public’s interest and the interests of the opposing parties”).

Illinois has taken steps to protect individuals’ private information. Examples include the Personal Information Protection Act (815 ILCS 530/1 et seq. (West 2022)), and the Biometric Information Privacy Act (740 ILCS 14/1 et seq. (West 2022)), and two laws regulating data obtained by artificial intelligence, the Artificial Intelligence Video Interview Act (820 ILCS 42/5 (West 2022)) and the Illinois Health Statistics Act (410 ILCS 520/1 et seq. (West 2022)). Nonetheless, the law cannot keep pace with the speed of innovations, compromising privacy. Corinne Moini, Protecting Privacy in the Era of Smart Toys: Does Hello Barbie Have A Duty to Report?, 25 Cath. U.J.L. & Tech. 281, 299 (2017) (asserting that privacy torts do not provide adequate protection for privacy implications of artificial intelligence and data collection). When methods of intruding into private lives and stripping anonymity outpace lawmakers’ ability to address them, courts have a duty under existing rules of procedure to protect sexual assault and abuse victims.

Plaintiff, a minor when the alleged sexual assault occurred, undeniably constitutes an “exceptional” situation. The lawsuit involves matters of a highly personal nature warranting anonymity. Indeed, Illinois Supreme Court rules acknowledge the need for anonymity in cases involving minors. For instance, the Illinois Supreme Court rules provide that minors shall be identified by first name and last initial or by initials in adoption cases (Ill. S. Ct. R. 663 (eff. Oct. 1, 2001) and appeals involving the Juvenile Court Act of 1987 (705 ILCS 405/1 et seq. (West 2022)). Ill. S. Ct. R. 660(c) (eff. Oct. 1, 2001). Moreover, the Style Manual for the Supreme and Appellate Courts of Illinois (5th ed. rev. 2017) provides for using the minor’s initials in cases involving the Department of Children and Family Services. These rules reflect the need to protect the identity of a minor in matters of a personal nature that involve potentially stigmatizing issues such as termination of parental rights or juvenile criminal conduct.  An alleged victim of sexual violence has similar reasons for protecting their identity when filing a lawsuit under the Gender Act. The alleged conduct involves highly personal conduct likely to embarrass and stigmatize, regardless of its availability on the Internet. Thus, I would find that an alleged victim has a compelling reason to proceed anonymously when filing a complaint. Similarly, an accused perpetrator should be able to seek anonymity on petition….

The appellant contends that Doe waived her right to proceed anonymously because she filed an affidavit supporting a motion to dismiss the defamation lawsuit the appellant filed against his other accusers. (The appellant added Doe as a defendant in the defamation litigation after she filed her complaint.) I must disagree that she waived her right. When Doe filed the affidavit in the defamation case, she had yet to file her complaint against defendant. The decision to help another litigant should not bar an individual from proceeding anonymously in their own lawsuit, regardless of an affidavit in another proceeding. Filing suit creates a different level of exposure than filing an affidavit in support of others.

You can read the entire opinion here. Continue reading ›

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Here are some important Illinois libel law decisions.

1. “Continental Nut Co. v. Robert L. Berner Co.” (Decided April 15, 1965): A corporation’s libel action complaint, which specifically alleged figures of gross sales before and after publication and that the decrease was the result of the publication, sufficiently alleged special damages, even without naming customers lost.

2. “Fried v. Jacobson” (Decided June 23, 1982, but note that the judgment was vacated on December 1, 1983): It was held that broadcasts which stated that the Internal Revenue Service was considering legal action against an attorney and that 32 suits were filed by the state’s attorney against the attorney and his company were not libel per se. The same case on its later date confirmed that an action for defamation based on libel per se requires that the words used are in and of themselves so obviously and naturally harmful that proof of special damages is unnecessary.

3. “Cantrell v. American Broadcasting Companies, Inc.” (Decided October 1, 1981): This case clarified the four categories of words which constitute libel per se under Illinois law.

4. “Brown & Williamson Tobacco Corp. v. Jacobson” (Decided July 14, 1983): To allow a corporation to recover on a theory of libel per se under Illinois law, it must show that it has been accused of fraud, mismanagement, or financial instability.

5. “Paul v. Premier Elec. Const. Co.” (Decided March 22, 1984): This case established that under Illinois law, four categories of speech define libel per se.

6. “BASF AG v. Great American Assur. Co.” (Decided April 14, 2008): While not a libel case per se, it discusses the interpretation of an insurance policy that defined an advertising injury as a violation of a person’s right of privacy, which could be relevant in the context of libel .

7. “Costello v. Capital Cities Communications, Inc.” (Decided December 15, 1988): This case involved a libel action filed against Capital Cities Media, Inc. and the editor of a newspaper’s editorial page. The complaint was dismissed for failure to state a cause of action].

Conclusion

These decisions underscore the need to carefully consider the nature of the speech, the status of the individuals involved, and the role of online platforms in defamation cases. While free speech is a cherished right, it must be balanced with protection against false and harmful statements. As libel law continues to adapt to the digital age, these decisions provide valuable insights into the evolving landscape of defamation in Illinois. It is essential for individuals, media outlets, and online platforms to stay informed about these developments to navigate the complexities of libel law successfully. Continue reading ›

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