Illinois employers are still reeling from the Illinois Supreme Court’s refusal to review the decision in Fifield v. Premier Dealer Services, Inc., No. 1-12-0327 (Ill. App. Ct., 1st Dist. June 24, 2013).  In Fifield, the First District Appellate Court ruled that employee non-competition and non-solicitation agreements supported by consideration consisting of less than two years of at-will employment are unenforceable, regardless of whether the employee resigned or was discharged, or the agreement was executed pre- or post-employment.  Moreover, employers are left wondering whether Fifield is the law of the land (of Lincoln) in the wake of Montel Aetnastak, Inc. v. Miessen, No. 13-cv-3801 (N.D. Ill. Jan. 28, 2014), which declined to follow Fifield, and held that fifteen months of employment was sufficient consideration to support a restrictive covenant agreement.  The Montel decision is also noteworthy given that the Court refused to enforce or blue-pencil the agreement due to the breadth of its geographic and activity restrictions, and the absence of a severability clause.

Companies around the country with Illinois employees should take action to ensure that any new and existing non-competition and non-solicitation agreements are enforceable in the wake of these game-changing decisions.  First, employers should contemplate offering additional forms of consideration for restrictive covenant agreements, such as salary increases, bonuses, severance, stock options (if available) and other incentives.  Second, where feasible and reasonable under the circumstances, employers should consider revising key restrictive covenant agreements to: include choice of law provisions applying a more favorable state law; evaluate the reasonableness of the duration, geographic, and activity restrictions; and confirm the inclusion of an effective severability clause.  Third, given that Fifield does not limit the enforceability of confidentiality and non-disclosure agreements, employers should revisit and strengthen such agreements so that they adequately protect any confidential or proprietary information.  Fourth, employers contemplating corporate transactions that impact employment status should explore arrangements that allow the length of service of an employee subject to a restrictive covenant agreement to remain intact for purposes of satisfying Fifield’s two-year requirement.  Taking these steps will help employers secure more enforceable restrictive covenant agreements in Illinois, which will better protect valuable employee talent and confidential information from competitors.