How to Use Non-Compete Agreements to Protect Sensitive Business Information

Non-compete agreements can be an incredibly useful tool to protect sensitive business information in today’s cut-throat business world. In the event that an employment relationship sours, there are often disagreements between employers and former employers regarding the scope and enforceability of a non-compete. At Lubin Austermuehle, our skilled Chicago business litigation attorneys focus on representing clients facing unpleasant litigation that distracts from their ability to run their business.

A non-compete agreement is an agreement that an employer and employee will enter into in order to outline the business information that belongs to the business and cannot travel with the employee once the employment relationship is terminated. Non-competes will often set forth the parameters for future employment of the employee in order to protect sensitive business information and prevent the transfer of trade secrets, customer lists, and other business information.

The enforceability of a non-compete is the source of much litigation between employers and former employees. Whether a court will enforce the non-compete often hinges on whether there was adequate consideration for the agreement and whether non-compete is reasonable.

In Illinois, there must also be a protectable business interest in order for an employer to be able to enforce a non-compete agreement against a former employee. In other words, the business interest in enforcing the non-complete agreement must be “legitimate.” Until recently, there was much debate about what constituted a legitimate business interest in Illinois, but a recent Illinois Supreme Court decision held that a legitimate business interest extends beyond customer relationships and confidential information, and that a court must consider “the totality of the facts and circumstances of the individual case” when deciding whether to enforce a non-compete agreement. Accordingly, a legitimate business interest could also extent to an employer’s goodwill and reputation as a justifiable means for enforcing the non-compete and protecting its business information.

Non-compete agreements are increasingly more common in today’s competitive business environment. Non-compete agreements and other restrictive covenants can be an incredibly useful tool for protecting sensitive information, but only if the agreement is enforceable in a court of law. The issue of enforceability of non-compete agreements is a complex legal question that is the subject of much business litigation. If you are party to a non-compete agreement – whether as an employee or employer – it is helpful to consult with a knowledgeable business litigation attorney like the Chicago business litigation attorneys at Lubin Austermuehle.

Contact our office at 630-333-0333 to schedule an appointment with one of our Illinois commercial litigation attorneys to discuss the enforceability of your non-compete agreement.

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• Consideration in Illinois Noncompete Agreements: How Much Is Enough? LKQ Corporation v. Thrasher