Tag: Illinois Employers

Will 2 Years of Continued Employment Be Enough in Illinois to Enforce a Non-Compete?

The Answer: It’s Complicated.

In 2013, an Illinois Appellate Court in Fifield v. Premier Dealer Services, Inc., decided that absent additional consideration, continued employment for less than 2 years after the restrictive covenant was signed, would not be sufficient to enforce a restrictive covenant. The Fifield decision was unusual because courts often do not consider the adequacy of the consideration ̶ only that there was consideration to support a contract. Often, the promise of continued employment was acceptable. This decision sent shock waves throughout Illinois and required employers to reevaluate the value they were giving employees when entering into restrictive covenants.

Since that decision, Illinois state courts have routinely followed Fifield and applied its bright line test in cases where there is no additional consideration given to the employee except continued employment.

For example:

• October 31, 2017 – Employee signed a restrictive covenant after working for his employer for nearly 12 years and also served on the company’s board of directors. He announced his resignation and left 6 months later. He was finally removed from the Board a year after signing the restrictive covenant. Upon leaving he started a new business that directly competed with his employer. The Court found that the restrictive covenant was not enforceable because he did not work for at least two years after signing the restrictive covenant.
• June 25, 2015 – Employee worked for employer for more than three years and left. After working for the new employer for one day, the employee asked to come back. As a condition of his return, the employer requested he sign a restrictive covenant. The employee quit 18-months later. The Court held that because he did not work at least two years after executing the restrictive there was not sufficient consideration to support the restrictive covenants.

Complicating matters, however, Federal Courts in Illinois have consistently rejected Fifield’s bright line test and adhered to a more comprehensive fact specific analysis. The Federal Court’s decisions believe that the Illinois Supreme Court would not adopt Fifield’s rigid and bright line test and continue to a support a “totality of the circumstances” review. As a result, it has led to decisions that are at odds with the State courts:

For example:

• October 20, 2017 – Employees left after 13-months of employment, took confidential information, and started working for a competitor. Employees argued that Fifield governed and therefore the restrictive covenants were not enforceable. The Court disagreed and rejected Fifield’s bright line test.

• July 24, 2017 – Employee left after working for employer for nearly ten years. He signed a restrictive covenant 16 months prior to leaving. The Court rejected Fifield’s bright line rule. The Court noted that “[f]ive federal courts in the Northern District of Illinois and one federal court in the Central District of Illinois have predicted that the Illinois Supreme Court will reject the Illinois appellate court’s bright-line rule in favor of a more fact-specific approach.”

What does this mean for employers?

Because all Illinois employers should expect that they will have to enforce these agreements in a state court, the Fifield holding must continue to be respected. Employers should review their restrictive covenants to ensure the agreements are carefully drafted to improve enforceability.

Levin Ginsburg has been working with employers for approximately 40 years to help them protect their businesses. If you have any employment or other business related issues, please contact us at 312-368-0100 or email Walker Lawrence at wlawrence@lgattorneys.com

The New Illinois Pregnancy Accommodation Act: What Employers Need to Know

The Illinois Pregnancy Accommodation Act (“IPAA”), which became a law on January 1, 2015, amended the Illinois Human Rights Act and heightened the duty of all Illinois employers to reasonably accommodate job applicants and employees affected by pregnancy, childbirth, or medical or common conditions related to pregnancy or childbirth including probationary and part-time employees.

It is now a civil rights violation for Illinois employers to: (i) not make reasonable accommodations for any medical or common condition of an applicant or employee related to pregnancy or childbirth; (ii) deny employment opportunities or deny medical benefits to or take adverse action against an otherwise qualified job applicant or employee if the denial adverse action is based on the need of the employer to make reasonable accommodations to the known medical or common conditions related to the pregnancy or childbirth of the applicant or employee; (iii) require a job applicant or employee to accept an accommodation when she did not request and chooses not to accept one; (iv) require a job applicant or employee to take leave under any leave law or policy of the employer if another reasonable accommodation can be provided; or (v) refuse to reinstate employee affected by pregnancy, childbirth, or medical or common conditions related to pregnancy or childbirth to her original job or to an equivalent position with equivalent pay and benefits upon her signifying her attempt to return or when her need for reasonable accommodation ceases.

The IPAA sets forth an extensive list of possible accommodations for pregnant employees including (without limitation): more frequent or longer bathroom breaks; breaks for increased water intake and periodic rest; private non bathroom space for expressing breastmilk and breast feeding; feeding; assistance with manual labor; light duty; temporary transfer to a less strenuous or hazardous position; provision of an accessible worksite; acquisition or modification of equipment; job restructuring; part-time or modified work schedules; appropriate adjustment or modifications of examinations, training materials, or policies; reassignment to a vacant position; time off to recover from conditions related to childbirth; and leave necessitated by pregnancy, childbirth, or medical or common conditions resulting from pregnancy or childbirth.  Prior to the IPAA, employees affected by pregnancy would not otherwise be entitled to many of the statutes list of possible accommodations.

The IPAA permits an employer to deny a request for pregnancy accommodations only where granting it would present an undue hardship.  To succeed with the undue hardship defense under the IPAA, an employer must demonstrate that the nature and cost of the accommodation, the overall financial resources and size of the employer, the type of operations the employer is engaged in, and the impact the accommodation would have upon overall operations are such that the accommodations substantially impacts the ordinary operations of the business.  Significantly, the IPAA provides for a rebuttable presumption that an accommodation will not impose an undue hardship if the employer provides or must provide a similar accommodation to non-pregnant employees otherwise entitled to an accommodation.

Similar to the Americans with Disability Act, the IPAA mandates that the employee and employer engage in an “interactive process”, which requires, at a minimum, that the employer and employee “engage in a timely, good faith, meaningful exchange to determine the effective reasonable accommodation.”

We help businesses navigate the complications and confusing interactive process to ensure compliance with the IPAA when dealing with employees affected by pregnancy, childbirth or medical or common conditions related to pregnancy or childbirth.

If you have any questions in this area, please contact:

Mitchell S. Chaban at:

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

testimonials

"We've worked with Levin Ginsburg since the 1980s...we have grown with them and have a very high level of comfort and confidence with this firm." Jay Nichols, President,
Badger Murphy
"Astute, responsive and practical. Those are three reasons why we work with Levin Ginsburg." Bryan L. Oyster, V.P. and General Manager,
Bentley Forbes