Source: https://lpemploymentlaw.com/category/restrictive-covenants/
Timestamp: 2019-04-20 06:55:00+00:00

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From time to time, other attorneys with our firm will contribute blog posts on items that may be of interest to members of the labor and employment law community. Today, we are fortunate to have a post contributed by Jason Hirsh, a partner in Levenfeld Pearlstein’s Litigation Group. Jason’s post discusses current Illinois cases at the forefront of labor and employment law that frequently come up when employers draft, or seek to enforce, restrictive covenants in their employment agreements in this changing legal climate . . .
Courts in Illinois are in the midst of a significant legal debate relative to whether a post-employment restrictive covenant involving an at-will employee can be enforced if the employee has less than two years of continued employment. This two-year bright line rule first blossomed in the often cited Fifield v. Premier Dealer Servs., Inc., 373 Ill.Dec.379 (1st Dist. 2013) decision. The debate continues to play out in the Chicago federal court.
In Montel Aetnastak, Inc. v. Miessen, 998 F.Supp.2d 694, 716 (N.D. Ill. 2014), Judge Castillo refused to apply the two-year bright line rule presumably adopted in Fifield. Judge Holderman, on the other hand, in Instant Technology, LLC v. Defazio, 12 C 491, __ F.Supp.2d __, 2014 WL 1759184 at *14 (N.D. Ill. 2014), took a contrary view.
On February 6, 2015, in Bankers Life and Casualty Company v. Richard Miller, et al., Case No. 14 CV 3165, Judge Shah waded into this controversy and rejected the two-year bright line rule. Instead, Judge Shah concluded that not only has “the Illinois Supreme Court not spoken on this issue”, but that case law does not support the argument that two years of employment is “necessary” to support a restrictive covenant.
This is a critically important issue affecting employers. Given the obvious uncertainty in the area of restrictive covenant enforcement, we recommend other forms of consideration, such as bonus payments, be considered.
Read the Bankers Life and Casualty Company v. Richard Miller, et al., Case No. 14 CV 3165 decision.
As we reported earlier this year (EEOC Files Suit Over Separation Agreement Language), the Chicago District Office of the Equal Employment Opportunity Commission (EEOC) filed suit against CVS Pharmacy alleging that the company’s standard separation and release agreements were “overly broad, misleading, and unenforceable.” Specifically, the EEOC argued that provisions in CVS’s agreements infringed on the employees’ rights to file discrimination charges and participate in EEOC investigations.
On October 7, 2014, U.S. District Court Judge John W. Darrah issued a Memorandum Opinion and Order granting CVS’s Motion for Summary Judgment and dismissing the EEOC’s lawsuit against CVS. Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 14-cv-863 (N.D.Ill.2014).
Judge Darrah did not rule on the issue of whether the terms and conditions of CVS’s Severance Agreement are enforceable. He dismissed the lawsuit because the EEOC did not fulfill the administrative prerequisite of attempting to conciliate with CVS before filing the lawsuit. Nevertheless, in a footnote in the opinion, Judge Darrah indicated that the settlement agreement properly carved out employee rights to participate in EEOC investigations and also indicated that any attempt to restrain such participation would be unenforceable in any event.
It is unfortunate that Judge Darrah did not have an opportunity to squarely address the challenge presented by the EEOC, but the opinion is still a setback for the EEOC in its efforts to invalidate private settlement terms. The EEOC may appeal the dismissal to the 7th Circuit and we will keep you posted on new developments, including the outcome of a similar case filed by the EEOC in a different district court.

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