Posts from: January 2016

Protecting Your Business From Trolls: Internet Anonymity is a Thing of the Past

The internet has long been a safe harbor for trolls and ne’er-do-wells of all sorts to unleash their scorn on whatever unsuspecting business lands in their crosshairs that day.  Yelp, Glassdoor and many similar web-based services provide a valuable mechanism for consumers to rate companies based on their experiences; but they also provide a virtual soapbox from which the less scrupulous can publish false information and materially damage a company’s reputation.

An actionable defamatory statement arises where there is an unprivileged publication of a false statement, made to a third party, that causes damages. See Solaia Tech., LLC v. Specialty Pub. Co., 221 Ill. 2d 558, 579, 852 N.E.2d 825, 839 (Ill. 2006).  By providing a voice to the masses, the internet has made it easier than ever before to publish false statements to third parties and it is now well established that statements made online can be the basis of a defamation action. See Hadley v. Doe, 2015 IL 118000, 34 N.E.3d 549 (Ill. 2014).

But how do you discover the secret identity of AngryEmployee546 who is presently scouring the internet for additional websites to tell the world that you steal your customer’s money?  In Illinois, one can use a pre-suit discovery tool known as a Rule 224 Petition. A Rule 224 Petition allows the petitioner to request information from the entity that owns the website that is publishing the offending remarks.  Such information can include all the data that the website operator collects from the poster. At a minimum, this usually includes an IP address and an email address and depending on the website, may include much more.  From there, it is generally possible to connect the dots to the offending poster.

In order to sustain a Rule 224 Petition and discover the identity of a poster, the petitioner must present sufficient allegations of a defamation claim to overcome a motion to dismiss that is automatically imposed by the court.  Id.  This means that a petitioner must effectively plead all of the elements for a claim for defamation on the face of the petition in order to obtain the information it seeks.

The one of the biggest hurdles for sustaining a defamation claim for internet published statements is that the statement is an opinion, and thus constitutionally protected speech.  Opinion statements, even if untrue, are not defamatory because they are constitutionally protected under the First Amendment.

Opinion statements also make up a large portion of negative online posts.  For example, if you were to write a review of restaurant and state that the service was slow, the food was terrible and the experience was unpleasant, such statements, even if totally false, are arguably just your opinion and not defamatory.  Whereas if you said that you saw the cook return to work without washing his hands and then saw the server spit in your food, these objectively untrue facts could well be defamatory.

Despite the hurdles, Illinois law provides a mechanism to find out who published defamatory remarks about you or your business so that you can protect your image, should the need arise.  If you or your business has been targeted by false online statements and you wish to investigate your options, please contact:

Robert G. Cooper at:

rcooper@lgattorneys.com or 312-368-0100.

Available Real Estate Tax Incentives for Cook County Property Owners and Developers

Real estate taxes are one of the largest operating expenses for income producing properties; especially for commercial and industrial properties located in Cook County. In an effort to reduce the property tax burden and to inspire development, the Cook County Board of Commissioners created tax incentive programs available to prospective buyers of vacant property and available to current owners who plan to construct new improvements on their property. These incentive programs can offer significant real estate tax reductions, with some property tax bills being reduced by up to 60%. Current owners or developers of property located in Cook County should become familiar with these incentive opportunities.

The tax incentives created by the Board of Commissioners are the Class 6b and Class 8 Tax Incentives, which are available for industrial properties, and the Class 7a, Class 7b and the new Class 7c Tax Incentives, which are available for commercial properties. These tax incentives last for ten years, escept for the Class 7c Tax Incentive which lasts only for 5 years. The Tax Incentives can be obtainable by fulfilling the eligibility requirements and filing a Tax Incentive application and corresponding tax appeal with the Cook County Assessor’s Office. You can visit the Cook County Assessor’s Office website to find the mandatory eligibility requirements for each incentive and the necessary forms that need to be submitted with the Assessor’s Office: http://www.cookcountyassessor.com/PdfForms/Incentive-Forms.aspx.

Each of the available incentives have their own set of eligibility requirements, For example, the Class 7a and 7b Tax Incentives are only available for commercial properties located in areas determined to be “in need of commercial development,” and the Cook County Assessor’s Office requires a tax incentive application to be filed with their office prior to any vacant property being occupied or any new construction commencing. These requirements are mandatory and every property owner or prospective buyer should become familiar with the tax incentive requirements and consult with legal counsel before entering into a purchase or construction contract. Additionally, the Cook County Assessor’s Office requires all incentive applications to include a passed resolution from the local municipality In which the property is located that supports and consents to the Tax Incentive being granted for the property. Owners and buyers seeking the Tax Incentive must make a formal request to the local municipality for the supporting resolution as part of the process for obtaining the tax incentive. The local municipality will most likely have its own requirements for passing a resolution supporting the Tax Incentive, and such requirements could me more or less extensive than what is required by the Assessor’s Office.

As indicated above, property owners and developers who intend to seek the above-referenced Tax Incentives should plan and coordinate with their counsel, along with the representatives from the local municipality, in the initial stages of the real estate project or venture. If you have more questions regarding available property tax incentives or to discuss future real estate projects, please contact:

Anthony M. Ochs at:

aochs@lgattorneys.com or (312) 368-0100

Guidelines for Non-Competition Clauses in Employment Contracts

Employment contracts with non-competition clauses are quite common.  But employers must not go too far in restricting the activities of former employees.  If they do, courts will not enforce the post-employment restrictions.

Recently, an Illinois court struck down covenants in an employment agreement that an employer tried to enforce because the restrictions went beyond what was necessary to protect a legitimate business interest of the employer.

In Assured Partners, Inc. v. Schmitt, 2015 Ill. App. (1st) 141863 decided October 26, 2015, the defendant, Schmitt, had been employed by ProAccess, a subsidiary of Assured Partners, Inc.  After he resigned, his former employer sued him, asking for money damages and an injunction.  The employer lost.

The employment agreement Schmitt signed prohibited him from competing with his former employer “anywhere in the United States or its territories” for a period of 28 months even though he had worked for ProAccess for only 20 months.  It also contained a confidentiality clause prohibiting Schmitt from disclosing any information or observations he made about ProAccess’ business while employed.

The court refused to enforce the non-compete clause because it was too broad saying it prevented Schmitt “from working as a broker, in any capacity, within the entire universe of professional liability insurance business anywhere in this country.”

It also refused to enforce the confidentiality clause because it was far too broad saying, “Illinois views post-employment restrictive covenants that insist on absolute secrecy of any and all information as unreasonable and unenforceable because a person is allowed to make a living, and cannot possibly not utilize any information from his past job.”

Notably, the court did not discuss or consider Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327, which holds that a minimum of two years of continued employment is necessary to establish adequate consideration for a restrictive covenant.  Given that Schmitt worked for ProAccess for only 20 months (less than two years), the court arguably could have dismissed Schmitt’s claim on the basis that there was insufficient consideration to support the post-employment restrictive covenant.

The takeaway for employment contracts is:

  1. post-employment restrictions should (a) be limited to protecting the legitimate business interests of the employer, and (b) not impose an undue hardship on the employee; and
  2. the time period and geographic area in which the restrictions apply must be reasonable.

To discuss employment contracts or a non-compete issue you have, please contact:

Michael Weissman at:

mweissman@lgattorneys.com or (312) 368-0100

or

Mitchell S. Chaban at:

mchaban@lgattorneys.com or (312) 368-0100

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