Chicago Business Litigation Lawyer Blog
After signing a non-compete agreement with his employer, president of a consulting firm resigned after less than a year, joined a competitor, and began to solicit his former clients and employees. The consulting firm sued, arguing that the ex-employee was bound by the terms of the non-compete and had breached his employment agreement. The Illinois Appellate Court found that the noncompete clause was unenforceable because the employee had not worked for at least two years after signing it, and the only consideration given in exchange for agreeing to the noncompete was continued employment.
Axion RMS, Ltd. is a company specializing in insurance brokerage and employee benefits consulting services. Michael Booth was hired by Axion in October 2010 as Vice President of Sales. He was later promoted to President of Axion in 2014. Booth and Axion entered into an employment agreement when he was hired, and the agreement included a noncompete clause that restricted Booth from soliciting Axion’s clients or employees during his employment and for a period of two years following termination of his employment.
In December 2015, Booth resigned from Axion in order to begin work with at HUB International Limited, a competitor of Axion. Axion later sued, alleging that, shortly after joining HUB, Booth began directly or indirectly contacting and soliciting Axion’s existing clients and customers, as well as several Axion employees. Booth filed a motion to dismiss the complaint in the circuit court. In his motion, Booth cited several cases from the Illinois Appellate Court which held that, where the only consideration given to an employee in exchange for signing a non-compete agreement is continued employment, the employee must work for at least two years after signing the covenant in order for there to be adequate consideration. Booth argued that, as he had resigned from his position less than a year after agreeing to the non-compete, it was unenforceable. Continue reading ›