Breach of Noncompetition Agreement

Courts will generally enforce noncompete agreements where necessary to protect the interests of the employer. However, courts will generally not enforce noncompetition agreements that are overreaching or where there is no protectable interest at stake—i.e. when the restrictions are unreasonable so there can be no breach of noncompetition agreement.

A noncompetition agreement is a restrictive covenant that is often associated with an employment agreement. A noncompetition agreement is frequently incorporated as part of the actual employment agreement.  It is a promise by an employee not to engage in certain behavior that might be contrary to the employer’s interests. Under a typical noncompetition agreement, an employee agrees not to enter into or start a similar profession or trade in competition against the employer for a specified timeframe.

How can an employee commit breach of noncompetition agreement? The use of noncompetition agreements is premised on the potential for the employee to have the ability to gain a competitive advantage upon termination or resignation. For example, upon termination or resignation, an employee might start his or her own business or work for a competitor. Without a noncompetition agreement, the former employee would have the potential to exploit confidential information, proprietary information, trade secrets and other sensitive information from the former employer.

Even though an employee agrees to execute the noncompetition agreement, he or she may decide to breach the agreement once he or she resigns or is terminated.  If you are involved in a breach of noncompetition agreement,  our Chicago commercial litigation attorneys will represent you and your best interests.

Whether you are a business, an employer or an individual employee, our Chicago litigation attorneys are on standby to help you determine whether your noncompetition agreement is enforceable. We will consider a number of factors in determining whether or not the noncompetition agreement might be enforceable and whether there is a breach of noncompetition agreement. Here are a few of the factors we will consider:

• Duration of the prohibition (must be reasonable in time)
• Geographical scope of the prohibition (must be a reasonable in geographical scope)
• Did the employer give adequate compensation for the agreement
• Did the employee receive adequate compensation for the agreement
• Was tangible employer property, such as customer lists, documents showing confidential information
• If, with respect to trade secrets, is the information known outside the employer’s business or can it be easily found
• If, with respect to customers, is the employer’s relationship near-permanent and did the employee have contact with customers

In advising our client, our Chicago litigation attorneys will also consider the scope of the noncompetition agreement, the specific facts and circumstances surrounding the employment, and the type of business involved. If you need advice regarding a noncompetition agreement, contact our Chicago litigation attorneys.