In today’s world, employers, understandably, do everything in their power to prevent employees and independent contractors from leaving and taking their knowledge and trade secrets with them. Increased mobility, speed of information, the rate in which information is disseminated, as well as decreased loyalty, and the tremendous amount of capital investment spent by the employer in creating intellectual property, make it so employers are increasingly requiring key employees (and even not so key employees) to sign very restrictive covenant, noncompete agreements to discourage employee defection or corporate pirating.
As discussed in previous comments, Illinois law still favors free mobility of employees. But along with an increased number of employers requiring employees to sign non-competition agreements, comes an increased number of business client seeking counsel from our Chicago business litigation lawyers to enforce these restrictive covenants. Consequently, the body of law governing the area of restrictive covenants has been changing.
Enforceable Noncompete Agreement
This broad category of business agreement prohibits the employee from working for a competing company. In order to be enforceable, this restrictive covenant must be for a specified period of time and within certain geographical and/or business parameters. An employer might ask a potential employee to sign a noncompete agreement as a condition of hire. A current employee might be required to sign one as a condition of continued employment. When an employee has not already signed such a non-compete agreement, an employer might include in the employee’s severance agreement a covenant not to compete for a period of time post-employment. Because these covenants present obvious restrictions on an employee’s ability to earn a living after leaving the employer, transactional and litigation business attorneys must be knowledgeable about the ways to limit these restrictions and protect the employee, prosecute the employee or defend the employer and the noncompete agreement.