We frequently work with Chicago and Illinois executives, independent contractors and freelancers to review and negotiate non-compete agreements before their employment or engagement.
Yet often, individuals, eager to get to work and afraid a job offer might be revoked, sign non-compete agreements without first giving much attention to what’s in the agreement.
Tragically, many discover later that the non-compete agreement they signed hastily when hired suddenly poses an unexpected obstacle to their next job.
If you’re an executive, independent contractor or freelancer, before signing a non-compete, take the time to understand its terms and how its enforcement might affect your career. If you have concerns, an employment lawyer can help.
What follows are some non-compete basics every Chicago and Illinois executive, independent contractor and freelancer should know.
Illinois Non-Compete Agreements 101
A non-compete agreement is an agreement between an employer and employee that imposes professional restrictions on the worker after the work relationship ends. Non-competes restrict former employees from working for competitors for a specified amount of time.
Employers use non-competes typically to protect their valuable corporate assets, such as trade secrets and customer goodwill. Employers often combine or substitute non-compete agreements with agreements not to solicit clients, agreements not to hire or recruit employees, confidentiality agreements and assignment of invention agreements.
In Illinois, there are few statutes or regulations governing non-compete agreements generally. Aside from rules applied narrowly to certain industries, and a law banning non-competes offered to certain “low wage” workers, generally the law leaves it to the courts to decide whether a non-compete is enforceable.
While Illinois courts generally disfavor non-compete agreements, courts will enforce a non-compete when the employer can prove, among other things, that the non-compete is reasonable.
I’ve Already Signed a Non-Compete. Will it Block My Next Job?
If you’ve already signed a non-compete agreement, the best time to get help to consider its impact on your future is before you accept a new job. An experienced employment lawyer can help you determine if a court likely will find the agreement enforceable, and how you might protect yourself from claims of breach when mulling job offers. Factors your lawyer will likely consider include:
- Whether the non-compete protects a legitimate business interest of the employer;
- The type of activity restriction imposed, its duration and geographic scope;
- The extent to which the non-compete may impose a hardship on you;
- Whether you resigned or were fired, with or without cause; and
- Whether the non-compete requires application of Illinois or another state’s laws.
If an employer sues over a suspected breach of a non-compete and wins, a court could require the employee to pay money damages (such as lost profits), and to abide by the non-compete for an extended period. The employee might also be required to pay penalties (called “liquidated damages”) as well as reimburse the employer’s legal fees and costs, depending on the terms of the non-compete agreement.
Worse, the employer might also be able to sue the breaching employee’s new employer for what’s called “tortious interference with contract,” and collect punitive damages, depending on whether the new employer knew of an enforceable non-compete agreement before hiring the employee. For this reason, it’s generally wise to speak to an employment lawyer before disclosing a non-compete agreement to a future employer.
Contact a Chicago Employment Law Attorney
Savine Employment Law, Ltd. represent Chicago and Illinois employees and employers in all areas of labor and employment law. We assist executives with an eye towards enhancing their careers. We value every opportunity to help clients through difficult and stressful work-related transitions. Call Savine Employment Law, Ltd. today for a Chicago employment lawyer to help with your non-compete agreement or other employment concerns.