Chicago Business Litigation Lawyer Blog
Where dance academy and employee had an employment contract that specified non-compete provision lasting “not less than five years,” the provision meant five years under Illinois law, and the reasonableness of the restriction was a fact-based question requiring more evidence to determine.
In April 2017, Pam’s Academy of Dance/Forte Arts Center sued Callie Marik, a former employee, seeking monetary damages and injunctive relief. The complaint alleged breach of contract and violation of the Illinois Trade Secrets Act. Pam’s Academy alleged that Marik breached the parties’ non-disclosure and restrictive covenant agreement by opening a dance studio within 25 miles of Pam’s Academy and soliciting students and/or teachers from an improperly obtained customer list.
Marik moved to dismiss the complaint, arguing that all of Pam’s Academy’s claims were defective because the provisions of the contract were invalid and unenforceable under Illinois law, and the complaint failed to allege a plausible basis for the allegation that Marik misappropriated a customer list. After a hearing, the trial court struck paragraph 7 of the original agreement, which banned Marik from soliciting, interfering with, diverting, or otherwise communicating with any customers or employees of the academy for purposes of providing similar services as the academy. The court found that this restriction, having no time limitation, was overly broad. The court then certified two questions for interlocutory review seeking an answer as to whether employment-based restrictive covenants with time periods of not less than five years and not less than three years were enforceable under Illinois law, and whether, in the context of employment-based restrictive covenants, whether the terms “not less than five years” and “not less than three years” meant five and three years, respectively. The Illinois Appellate Court, Third District authorized the appeal. Continue reading ›