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When a former employee of a company is accused of soliciting his ex-coworkers to defect to a competitor, can he challenge enforcement of a nonsolicitation agreement on the sole ground that he did not work for the company long enough? One more Illinois federal court has answered that question in the negative.

In an opinion released March 10, 2016 in R.J. O’Brien & Associates LLC v. Robert Williamson, 2016 WL 930628, U.S. District Court Judge Robert W. Gettleman denied summary judgment to a defendant employee who argued that two years’ employment is required as consideration for restrictive employment covenants. The defendant, a former trader for the Chicago-based futures brokerage R.J. O’Brien & Associates, signed confidentiality and nonsolicitation agreements upon accepting employment at the firm in 2012. He also signed an “associated persons” agreement. The agreements stipulated, among other things, that defendant could not solicit O’Brien employees or customers for one year after leaving the company. According to the facts presented in Judge Gettleman’s opinion, defendant left the firm after one year in April 2013 and took a position at Wells Fargo Securities. Thereafter, he remained in contact with several O’Brien traders whom he attempted to convince to leave the firm to join Wells Fargo, successfully recruiting at least one. O’Brien brought a two-count complaint against him alleging breach of the agreements.

Noncompete agreements and other restrictive covenants are usually signed by an employee upon accepting employment, and are often intended to prevent pilfering of clients or trade secrets by those employees when they separate from the company. In some cases, such as the one at hand, businesses also seek to prevent a former employee from siphoning their human talent. Illinois, like most states, enforces restrictive employment covenants as long as they meet certain requirements. First, there must be some consideration, or promise, offered by the employer in return for the employee’s agreeing to refrain from taking certain actions upon termination of employment. Continue reading ›

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Franchises can be a great opportunity for a business to branch out and expand while limiting their risks, but only if the contract is fair to both parties. Any time anyone signs a contract, they should read it carefully and have a qualified attorney look it over or they could find themselves bound to abide by terms they never meant to agree to.

Contracts exist in order to hold both parties accountable and make sure everyone does what they said they would do. They also provide guidelines for how to break up the business in the event one or more parties want to leave.

When going into business with family, it can be tempting to trust that they’ll do what they say they’ll do, but that’s actually a really bad idea. Business disputes and familial disputes can get very messy and even more so when they’re combined, as in the recent dispute over the cheesesteak restaurant, Tony Luke’s.

Anthony “Tony Luke” Lucidonio Sr. founded the restaurant in 1992 in Philadelphia and has since opened several more locations. In 2007, his son, Anthony “Tony” Lucidonio Jr., recommended his father and brother, Nicholas Lucidonio, become franchisors with Tony Jr. as the franchisee. The agreement allowed Tony Jr. to use the Tony Luke name in exchange for franchise fees and 15% royalties. Continue reading ›

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Anytime someone works closely with a particular business, whether as an employee, franchisee, or even outside counsel, they are usually granted access to sensitive information regarding how the business is run. In order to keep their trade secrets safe and protect their business interests, companies frequently require certain people to sign a non-compete agreement. This type of agreement is usually included in an employment contract or, in some cases, a franchise contract. It places restrictions on when and where the person can do business, and sometimes even who the person can do business with. For example, stealing employees and/or customers from a business is generally considered to be sabotage and most non-compete agreements prohibit such practices.

Having a party sign a non-compete agreement and getting a court to uphold the agreement are two different things. Most courts recognize the need of businesses to protect their own interests and that one of the ways they do so is through non-compete agreements. But many courts consider whether the agreement protects only the company’s legitimate business interests. If the court deems the agreement to be overly broad, it could rule that the agreement created too heavy a burden on the individual, and so is not enforceable. Continue reading ›

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Our Chicago business dispute lawyers have extensive experience prosecuting and defending intellectual property, copyright, trademark, partner disputes and complex business lawsuits.

 

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Peter S. Lubin, Patrick D. Austermuehle, and Andrew C. Murphy recognized by Illinois Super Lawyers 

Peter S. Lubin have been selected as 2016 Illinois Super Lawyers in the areas of Business Litigation and Class Action Law. No more than 5% of attorneys in Illinois receive this honor each year. This marks the sixth straight year both co-founders of Lubin Austermuehle have been selected for this honor.

Two additional Lubin Austermuehle attorneys, Patrick D. Austermuehle and Andrew C. Murphy, have been selected as Illinois Rising Stars for the second straight year in the areas of Business Litigation and Class Action Law. Rising Stars are selected from attorneys under the age of 40 who have been practicing for less than 10 years. No more than 2.5% of Illinois attorneys are selected by the research team at Super Lawyers to receive his honor each year.

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Companies have long been arguing that arbitration agreements are in the best interests of everyone involved, even when it seems pretty clear they only benefit the large corporations implementing and enforcing those agreements. District and federal courts across the country have been upholding all sorts of arbitration agreements between companies and their customers, even though the Federal Arbitration Act (FAA) was only intended for arbitration to be used as a means to settle disputes between businesses, not between businesses and individuals.

Because arbitrators work for for-profit companies, the outcome often is not objective when the arbitrator is under the thumb of the company. There are arbitration companies that have a reputation for being fair and objective, but when an arbitration agreement gives the company the right to choose the arbitrator (as these agreements sometimes do), the company is free to choose an arbitrator they feel confident will rule in their favor. If a company brings a lot of business to an arbitration company, the arbitrator may be influenced by that fact without even realizing it. Arbitration in many instances offers no explanation for a ruling and no opportunity to appeal the decision. Companies sometimes choose legal regimes that are unfair to consumers. Continue reading ›

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If something is frequently discussed in public, does that warrant posting a video of it online for everyone with access to a modem to see? According to Terry G. Bollea, better known as Hulk Hogan, it does not.

Bollea has talked frequently and publicly about his sex life, but he apparently feels that talking about something and showing it are too very different things. While it has been his choice to talk openly about his sex life, it was not his choice to post online a sex tape involving himself and Heather Clem, the wife of Bollea’s former friend.

The news site Gawker received the video footage from an anonymous source and posted clips of it on its website, along with a full description of everything that happens in the full 30 minutes of video. The events were allegedly recorded via a security camera and without Bollea’s knowledge or consent.

Bollea blames his former friend, who had his name legally changed to Bubba the Love Sponge Clem. Clem had the tape made and kept it in his office. He claims the tape was stolen from his office and no one seems to know how it got into Gawker’s hands. Continue reading ›

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The Internet has changed the way everyone does business. A lot of companies that used to rely on professional reviews and/or word of mouth to spread news about their business now have to deal with online reviews. Multiple sites exist for consumers to post reviews of just about any business and Yelp is one of the most popular review sites.

These sites make it easy for consumers looking to try a new restaurant, hotel, gym, etc., especially consumers who are new to the area. All they have to do is perform a quick search of local businesses on Yelp and the site will provide the average rating users have given that business. Users can then scroll through to see individual ratings and what each reviewer had to say about the business.

These reviews have proven problematic for many companies, since most consumers only take the time to post a review if they’ve had a really great experience or a really bad experience, which can skew the results of the average review. Despite the issues this has caused for many businesses, some have handled it better than others. Continue reading ›

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As more and more companies use non-disparagement clauses in their Terms of Service and other contracts with their consumers, it can feel to customers like they have no outlet to talk about their negative experiences with certain businesses. Congress has proposed a bill called the Consumer Review Freedom Act, which would prohibit companies from retaliating against consumers who leave negative reviews, but the law is slow to catch up with technology. Fortunately, there are other ways to deal with these non-disparagement clauses without resorting to the courts.

Review sites such as Yelp, Angie’s List, and Trip Advisor can take the initiative and help punish businesses who have been known to prohibit customers from posting negative reviews. Yelp will take down any reviews that have been posted by anyone who was not a consumer or did not have a direct experience with the specific business being reviewed, but that doesn’t always help consumers and there’s more that can be done.

Angie’s List has a “penalty box” in which businesses that do not sufficiently respond to consumer complaints get excluded from category and keyword searches. Only users of the site who know the name of the business can find it, which can seriously injure the business by preventing potential new customers in the area from finding it. Many businesses depend on consumer review sites such as Angie’s List and Yelp, so by making it more difficult for potential customers to find them, the sites can provide a serious incentive for businesses not to try to mess with their consumers’ reviews. Trip Advisor also has a penalty sign it displays on pages where it has detected instances of possible fraud. Continue reading ›

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