Nonsolicitation Agreements

Businesses have an interest in protecting their customer relationships from being compromised by departing employees.  Courts will enforce nonsolicitation agreements designed to protect a bargain where a company introduces customers to an employee on condition that the employee will not solicit the customer after leaving the company.

Some Illinois courts, however, have held that nonsolicitation agreements and other restrictive covenantswill only be upheld when there is adequate consideration. With nonsolicitaion, and restrictive covenants in general, Illinois courts have deemed employment to be adequate consideration, as long as the employment was “substantial.” The reason substantial employment is deemed adequate consideration is because Illinois is an “at will” state, so an employer can generally fire an employee for any reason or no reason at all (as long as not for illegal reasons). Without the protection of substantial employment, an employee could sign a nonsolicitation on the first day and then be fired on day three and be prevented from soliciting customers for two or three years. Putting a person in that position is fundamentally unfair, which the courts recognize.  Generally nonsolicitation agreements that are not properly, thoughtfully drafted will end up in business litigation.

Agreements not to solicit customers or clients of a former employer are generally controlled by the same standards applicable to other noncompete agreements. Courts will refrain, however, from enjoining former employees from accepting business from former clients who voluntarily, and without active solicitation, contact the former employee and seek to retain her services.

Enforcement of Nonsolicitation Agreements

Another business interest that courts will recognize is prevention of solicitation of a company’s employees. Companies wish to limit corporate pirating as much as possible and will therefore enter into anti-employee solicitation covenants. Courts will generally enforce nonsolicitation agreements, applying the same standards as other restrictive covenants, to the extent that the agreement prohibits solicitation of employees. The courts are mindful, however, that these agreements cannot prohibit the employees from leaving and going to work for a new company.