Chicago Business Litigation Lawyer Blog
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 ›